U.K. Election: Brexit Clarity Offers Silver Linings for Entertainment Industry, Fears for BBC

Boris Johnson - European Union Summit - H 2019

Boris Johnson's resounding majority should diminish fears of a "hard Brexit," but there are worries whether his recent "Trumpian" threats toward the British press will continue.

Many figures from the U.K.’s politically vocal entertainment world decried the result of the British election Thursday, a vote that saw the Boris Johnson-led Conservative Party win a resounding majority (Hugh Grant tweeted, “There goes the neighbourhood”).

The win gives Johnson a clear mandate for Brexit, enabling him to push his Brexit Withdrawal Bill through British parliament before the end of the year and leave the European Union with a deal January 2020.

The U.K.’s departure from the EU has been widely condemned by the film and TV sector since the initial referendum in 2016, with many pointing to agreements such as the Creative Europe program and issues surrounding immigration. The U.K.’s vibrant VFX industry is one that is heavily reliant on a skilled European workforce, and there have been fears that this would be impacted.

But there may be a silver lining to the manner of Johnson’s victory. As well as — finally — offering clarity on Brexit, his resounding majority means he no longer has to pander to the more ardent Brexiteers, such as Nigel Farage’s Brexit Party (who failed to win a single seat). And this should mean that a “hard Brexit,” severing all ties with the EU and taking the U.K. out of the single market, is less likely.

“So we’re not going to see a hard Brexit at any time next year and we probably won’t see it at all,” says Claire Enders of Enders Analysis, who suggests issues regarding free movement of labor may also be less severe. “I think Boris is now in a position to move towards the center on immigration, because the Brexit Party melted and their one thing was immigration.”

The U.K. is currently in the midst of a production boom for both film and high-end TV, largely thanks to extremely competitive tax reliefs that have seen studio space at a premium and major studios increase their production spend in the country. The Conservatives have pledged to continue to support these incentives schemes.

But another significant factor in the boom has been the value of the pound, which dropped dramatically following the referendum and saw the U.K. become a far cheaper place to invest. Thursday’s election result led to a surge in the pound against the dollar, rising to its highest since May 2018 and a three-and-a-half-year high against the euro. But such a rise shouldn't result in any fall in inward investment, claims Enders.

“Productions that are committed are going to be committed anyway, and the U.K. has such myriad talent,” she says, also pointing to the fact that the production boom began when the pound was significantly higher. The strengthening of the currency alongside clarity over Brexit could, she suggests, even present the U.K.as a more attractive and confident proposition for investment capital from the U.S.

“So we could see things like ITV becoming a target again,” she says of the U.K. network, in which Liberty Global already owns a 9.9 percent stake, with rumors of it increasing its share.

But there was one note of extreme caution from Johnson’s victory, one surrounding his recent treatment of the British press and fears that he could begin to emulate the U.S. President when it came to lashing out when it didn't serve his needs. 

“Boris has been markedly and extraordinarily aggressive towards the media,” says Enders.

During the election campaign Johnson had a spat with most of the main U.K. broadcasters: with Sky when it “empty-chaired” Conservative chairman James Cleverly after he didn’t turn up for an interview; with Channel 4 when Johnson refused to attend a climate change debate and they replaced him with a melting block of ice; and repeatedly with the BBC, having refused to be interviewed by its top political presenter Andrew Neil.

Last week Johnson even threatened to take away the BBC’s license fee, which provides the broadcaster with its funding (already hit by the Conservative's decision to remove free licenses for the over-75s and force the BBC to take responsibility for their payment).

“You have to ask yourself whether that kind of approach to funding a TV media organization still makes sense in the long term, given the way other media organizations manage to fund themselves,” Johnson said, speaking on the same day he sparked condemnation for his response to a photo of a sick 4-year-old sleeping on the floor of a hospital, which had been shown to him by a BBC reporter.

“This thin-skinned behavior of aggression towards the media we’ve never witnessed of any Prime Minister,” says Enders. “We’ve never had a Trumpian Prime Minister. And it would be a shame if someone with such a large majority feels the need to behave in a Trumpian way now that the election is over.”