EXCLUSIVE: The British Film Institute has responded to the stinging rebuke from the UK’s opposition party Labour that the film industry only “pays lip service to diversity” and that inclusion riders should be tied to the UK’s lucrative film and TV tax credit. Amanda Nevill, CEO of the UK’s leading organization for film told us, “Labour’s call for greater representation in the industry, echoes the BFI’s and the industry’s own concern to achieve this. Film and television are amongst the UK’s most successful and fastest growing industries – worth some £6 billion in GVA, with the tax incentives catalyzing our international competitiveness.

“But our industry needs to be more representative and inclusive on and off screen,” she continued. “This is one of the reasons why the BFI made diversity and inclusion front and centre to its five year plan for film BFI2022, and why the BFI Diversity Standards were introduced, with wide industry support, to accelerate this change. The Standards set a new benchmark and are a clear set of contractual guidelines that productions sign up to, to deliver diversity across cast and crew, and through the stories they tell. These are already a condition of all productions in receipt of National Lottery funding from the BFI. We are immensely proud of the Standards which have been widely embraced by the independent sector – where we are already seeing the impact, and they have been formally adopted by Film4 and, for next year’s BAFTA Awards, in the main British categories. We are working closely with international organizations and confidently expect more announcements later this year. We have set ourselves a bold ambitious target that all producers active in the UK voluntarily adopt the Diversity Standards.

“This industry is also supercharged when it comes to employment; just watch the credits after any screening and wonder at the breadth of opportunities on offer – from carpentry and hair & makeup, to finance and marketing. But we have a shortage of skills, so opening doors and making it possible for  those who might never have thought about a career in film, is something we really need to achieve. The industry’s own voluntary Skills Fund is working hand in hand with National Lottery funding to do just this, to eradicate obstacles and make it easy for everyone who seeks to build a career in this exciting industry to achieve their goal.”

The riposte comes after Labour MP Kevin Brennan, the Shadow Culture Minister, told UK newspaper The Observer on Sunday, “For far too long, the film and TV industries have been dominated by a small and unrepresentative segment of society. Bringing inclusion riders from Hollywood to HMRC could put a rocket booster under the industry that pays lip service to diversity, but hasn’t always delivered.”

He added, “With Cannes just weeks away, it’s important we start an international conversation about the ways in which policy-makers can contribute to the urgent need for greater diversity. We will consult fully before bringing forward proposals but updating the film and high-end TV tax relief to require inclusion and diversity as part of the qualifying criteria would be a major step forward. The pace of change has been too slow so far. We need action now.”

The political move would make Britain the first country to take such a form of positive action, but it is not imminent, not least because the Labour Party is not in power. The call comes after Labour carried out research which it says showed that just 15% of recent British films qualified to receive the tax credit were directed by women. Recent BFI research also shows that between 2006-16, 59% of UK movies didn’t feature a single black actor in a named character role.

There have long been internal discussions in the UK industry about a diversity stipulation being added to the country’s generous tax incentives. Such a move is fraught with legal challenges, however. Above all, the UK industry is hugely reliant on the inward investment of U.S. studios who benefit significantly from the relief. Those studios have been quiet on the issue of inclusion riders so far and altering the relief could potentially disrupt one of the UK industry’s biggest revenue streams. As we reported earlier this year, the UK government is hoping inward investment can reach more than $5B by 2025.

The BFI administers the tax relief scheme by certifying which productions qualify as British and are therefore eligible for a payable cash rebate of up to 25% of UK qualifying expenditure. Dozens of U.S. blockbuster movies and TV series have qualified for the tax relief, including multiple Star Wars and Avengers movies Fox series 24 and Game Of Thrones. At present there are no diversity requirements for productions seeking the relief.

An inclusion or equity rider, popularized last month by Frances McDormand during her Oscar acceptance speech, is a provision added to a contract of an actor to ensure that casting and production staff meet certain levels of diversity, for example regarding the inclusion of women, people of colour, LGBT people and people with disabilities. In McDormand’s speech, the actress mentioned that the rider calls for 50% equality on film sets, but that number is not mentioned in the template for the rider, which instead calls for “state-by- state demographics to determine representational percentages”. Those behind the rider, including Stacy Smith, founder of the Annenberg Inclusion Initiative at the University of Southern California, state that it does not ‘provide for quotas’. The scheme has found favour with a handful of prominent actors and producers including Matt Damon and Ben Affleck’s Pearl Street and actor Michael B Jordan. WME has also said that it encourages its adoption.

However, when I spoke to leading UK entertainment lawyer Graham Greeene, an employment expert at international firm Reed Smith, who helped devise the BFI’s Diversity Standards and whose clients include NBC Universal, Sony and Channel4, he raised concerns about the inclusion rider’s viability in the UK.

“To date this has been proposed in the U.S. There is a different culture as well as a different legal background in the US. From a UK perspective, I have some questions about what is being proposed. But if it is something that requires a quota of some kind that would raise similar questions to those already considered in relation to some UK initiatives. You can certainly talk about targets and lawful positive action, the Equality Act provides for that, but initiatives such as the BFI’s Diversity Standards in the UK do not require selection because of a particular ethnicity or gender. A quota runs the risk of being unlawful on the basis that if someone is demonstrably treated less favourably because of their gender or ethnicity that is unlawful discrimination and that person could potentially bring a claim.

“When you look at the BFI’s Diversity Standards, they encourage you to think creatively about diversity and encourage lawful positive steps to increase talent pools. The Standards don’t tie funding specifically to figures. They talk about lawful positive action steps not positive discrimination steps.”

Last year, the BFI introduced diversity targets for its own Film Fund funding decisions including achieving a 50-50 gender balance, 20% BAME (black and minority ethnic), 9% LGBTQ and 7% disability. These targets came into effect on April 1. They are in addition to the controversial-at-the-time but now widely accepted BFI Diversity Standards which require all applicants to the BFI’s various funds to meet at least two out of four diversity criteria.