Background
A levy was first proposed by Harold Wilson, then president of the Board of Trade, in 1949. The levy was intended to assist producers of British film. A direct governmental payment to British-based producers would have qualified as a subsidy under the terms of the General Agreement on Tariffs and Trade, and would have led to objections from American film producers. An indirect levy did not qualify as a subsidy, and so was a suitable way of providing additional funding for the UK film industry whilst avoiding criticism from abroad.
Read more about this topic: Eady Levy
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