Hollywood's British love affair is over

BRITAIN IS losing the battle for Hollywood's block-busters. Film studios in the UK, which have previously enjoyed a steady stream of income from big budget films fleeing Los Angeles' high costs, are now struggling to fight off competition from Canada and Australia.

Some $2.8 billion (pounds 1.7 billion) worth of film production left Hollywood last year, according to the Director's Guild of America. But Britain's share of big productions is falling: The latest report from the British Film Commission shows that just three foreign films began production in the UK in the first six months of 1999. Only one, Ridley Scott's Gladiator for Dreamworks, is a big-budget Hollywood production. This is four fewer films than for the same period last year and three fewer than for the same months in 1997 and 1996.

Britain is also suffering a drop in co-productions, with joint investment by British and foreign companies in films this year down from pounds 73m in the first half of 1998 to just pounds 27m this year. Only British-funded films are keeping UK studios busy and there had been a 6 per cent increase in the total spending on film in the UK so far this year.

British studios are suffering as Canada and Australia become increasingly successful at attracting US producers. While the first four Star Wars films were all made in the UK, Australia has attracted the next two movies in the series. It was the location for The Matrix, snatched the next Mission: Impossible film from the UK and will be the location of Baz Luhrmann's new musical Moulin Rouge.

Australia is the fastest growing destination for what Hollywood calls "runaway production", or films it loses to cheaper locations. It is often a third cheaper to make a film there, while Canada saves producers 25 per cent.

Canada still attracts over 90 per cent of the production money fleeing Hollywood. Many of these films are cheap, made-for-TV offerings, but big budget movies are being attracted there too due to the North American Free Trade Agreement and Canadian Government tax incentives.

So concerned is Hollywood about the loss of business that it has lobbied the US Congress to produce a law giving it tax breaks on movie employee wages.

Many of the productions going to Australia are 20th Centruy Fox films being made at Fox's big new studio in New South Wales.

The Government's working party on the film industry is investigating the possibility of creating tax incentives to attract films to the UK and film-makers' union Bectu has begun talks with its UScounterpart about trying to prevent films being lost to non-unionised Canada and Australia.

However there are certain reasons for productions moving which neither Government, the Unions nor film studios may be able to influence. The Mission: Impossible sequel is thought to have gone to Australia because its star is Tom Cruise and his Australian wife Nicole Kidman wanted to be near her family.

MADE IN ENGLAND WITH AMERICAN MONEY

STAR WARS EPISODE 1 THE PHANTOM MENACE (1999)

$110m (pounds 70m)

Leavsden Studios, Herts.

Twentieth Century Fox

We have some of the leading talents and technology in post-production animation needed to create many of the film's special effects.

MISSION: IMPOSSIBLE (1996)

$75m (pounds 48m)

Pinewood, Bucks.

Paramount

Tom Cruise wanted to live in the UK for a spell and we have the large stages needed to create the action scenes set on the Eurostar.

TOMORROW NEVER DIES (1997)

$110m (pounds 70m)

Leavsden Studios, Herts

United Artists

The Bond franchise relies both on at least some British settings and the creation of huge sets on our big sound stages that can be blown up.

EYES WIDE SHUT (1999)

$65m (pounds 41m)

Islington

Warner Bros.

Director Stanley Kubrick's fear of flying dictated that all his later films were made in the UK.