Goodbye Hollywood, hello Watford

Published by The Mail on Sunday (20th July, 2014)

There was a sprinkling of rain as 250 specially invited guests arrived for the party in the courtyard of the Foreign Office in London’s Whitehall, the waiting media cameras catching a smattering of soberly dressed stars from the worlds of acting, broadcasting, comedy and music.

Among those sipping chilled wine and nibbling canapés with the Prime Minister and senior Cabinet ministers were Helena Bonham Carter, Ronnie Corbett, Bruce Forsyth, Michael McIntyre, Katherine Jenkins and Claudia Winkleman. The event was designed to showcase the success of Britain’s creative industries, worth £70 billion a year to the economy. But it was the dinner afterwards in Downing Street’s State Rooms that highlighted something more spectacular. For jetting in to join David Cameron were the big beasts who run Hollywood, the tiny handful of bosses who back those movie blockbusters that cost $250 million to produce and promote.

 There were the heads of Warner Brothers, Sony, Lucasfilm and 20th Century Fox, as well as Miramax mogul Harvey Weinstein, nicknamed ‘God’ by Meryl Streep. ‘This was very significant,’ says one film executive attending. ‘These guys don’t go to just anything.’

They were there for one simple reason: Britain has eclipsed Hollywood when it comes to making movies. So sharp is the decline of California’s iconic industry that it is being described as ‘catastrophic’ for the state. More live action films were made in this country than in California last year – and far more money spent making them: half a billion pounds was spent in Britain making these movies, almost double the amount spent in the Golden State.

One after another, big franchise films such as Harry Potter, Star Wars, the Marvel series, Mission Impossible and Iron Man, together with hugely successful TV hits like 24 and Game Of Thrones, have followed James Bond by making Britain their base.

Cue an unprecedented boom in the industry, with profits exploding, studios expanding, salaries soaring and stars searching for houses here. Jennifer Lawrence, Johnny Depp and Bradley Cooper are among the latest A-listers house-hunting in London. Big films are being turned away for lack of production space, while support staff such as carpenters, caterers and cutting suites are rejecting work almost daily.

Kevin MacDonald, director of Oscar-winning The Last King Of Scotland told me that for the first time he feels able to recommend the film industry as a stable career choice for youngsters: ‘It all feels sustainable,’ he says.

Much of the credit for the change in fortunes belongs to an unlikely figure: JK Rowling. When the industry was in the doldrums in the Nineties, she insisted Harry Potter be filmed here.

At the time, Hollywood was making more than two-thirds of its blockbusters in LA, while total spending on film production here was under £400m. Rowling’s demand led Warner Brothers to invest heavily in building sets, finding crew and developing technical support at Leavesden Studios, a ramshackle 200-acre former Rolls-Royce factory near Watford that produced thousands of aircraft during World War II.

Harry Potter became the most successful film series ever, and Warners was so impressed by British expertise that it became the first Hollywood giant to create a permanent base in Europe for 70 years.Leavesden has nine sound stages and a high-tech tank for filming and recently announced expansion plans for three more stages.

Other studios are opening and expanding, including Pinewood, the most famous of all. Now Rowling is writing her first screenplay for the Harry Potter spin-off, Fantastic Beasts And Where To Find Them, to be filmed at Leavesden.

The filming of Harry Potter coincided with several other trends that suddenly made the movie industry highly mobile, such as new technology and profitable new markets such as China, while powerful unions began pricing California out of the market by driving up costs of production.

Seeing this, rival states sought a share of the Hollywood stardust. New Mexico led with generous tax credits and loans; hence Breaking Bad was based in Albuquerque rather than its original location of Riverside in California. Britain was well-placed to exploit this search for new production locations with a history of film-making stretching back a century, highly skilled technical staff, a reputation for delivering films on time, shared language and direct flights between London and LA.

Perhaps most significantly, the Labour Government gave in to industry pressure and introduced hefty tax breaks for big-budget films in 2007 – since extended by the Coalition to animation, video games and major TV series. The sums in tax breaks and inducements can be huge. Britain offers producers up to 20 per cent of costs back if they spend more than a quarter of the total budget here. Disney got a record £22.4 million (between 2011 and 2013) for Thor: The Dark World.

 Supporters argue it pays off, with every £1 of tax relief delivering more than £12 for the economy, while creating confidence for an inherently risky industry to make long-term investments here. The facts support their case, with more than £1 billion spent on film production last year in a sector growing five times faster than the wider economy. And the backdrops boost tourism. A recent report found one in ten foreign holidaymakers were lured by seeing this nation on the screen; Alnwick Castle in Northumberland, for instance, saw the number of visitors soar after appearing in Harry Potter.

The scale of the boom can be seen at Pinewood, home of James Bond, which is currently hosting production of the next Star Wars. It is doubling in size with a £200 million expansion including new hi-tech stages, workshops and offices – plus a Welsh offshoot in Wentloog, Cardiff. It is desperately needed, as too many productions chase too few skilled workers in too few facilities. A capacity crunch is looming.

‘Britain is now the creative hub of Europe and governments of all colours have recognised how vital these industries are to the British economy,’ says Pinewood’s Andrew Smith. But he also says the firm is opening a studio in Malaysia, underlining the global nature of the modern movie industry.

Last year two of the three biggest hits in China were filmed at Pinewood. It has become a critical market given the speed of its growth, with seven cinemas opening each day – but only 34 foreign films allowed to be screened annually.

One was the space epic Gravity, winner of seven Oscars. Despite starring George Clooney and Sandra Bullock, the film was a thoroughly British triumph that ensured recognition for the spectacular success of our special effects wizards. And almost half the jobs on big budget films go to these technicians. Just 15 years ago California dominated the specialism but now, thanks largely to British and Canadian competition, their special effects industry has collapsed.

The Oscar for special effects on Gravity went to a London-based firm called Framestore, which spent more than two years painstakingly creating breathtaking images of astronauts spinning in space. Framestore began life making Weetabix commercials and Culture Club videos; now it is world renowned and spends £3 million annually on new equipment. It’s hired an additional 300 staff over the past 12 months to handle the extra workload.

On the other side of the Atlantic, the mood is more sombre. Hollywood made just two of the top 25 live-action movies last year in California; even its share of TV production has plummeted by almost half in five years. ‘You can’t blame Britain for wanting this valuable industry,’ says Paul Audley, president of Film LA, which oversees movie-making in its traditional home. ‘But this is catastrophic for California, its industry and the people who work here.’

The state may start finally offering its own subsidies for blockbusters later this year, but Audley fears the damage has already been done. ‘Hollywood is on the edge of being permanently a second-tier production centre for movies,’ he says. Who knows if this doomsday warning for the historic home of movie-making will come true? It is certainly a remarkable statement.

But one thing is certain: when teenage wizard Harry Potter outmanoeuvred the titans of Hollywood just as he vanquished the evil Voldemort, he helped conjure up a British film boom of epic proportions.

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