British film industry seems to be doing better than ever. The UK Film Council recently revealed that £840m was spent last year (up by 48% from 2005). Also more studios are coming to Britain. The change has occured after the introduction of a tax regime designed to facilitate low-budget domestic productions and lure big-budget investment. Gordon has been offering up to 20% tax relief to the film industry since 2005.
This is a fine example of government picking winners. Why does it consider producing films to be such an important industry? After all, it's existence is not in any shape or form crucial for the wealth of the nation and making films is still the prerogative of a small elite. Now the government promotes their business further.
It is necessary to "the health of a dynamic economy that dying industries be allowed to die as that growing industries be allowed to grow" (Henry Hazlitt). This way there will be enough capital and labour for sectors that will bring about economic growth.