The Chancellor has made a major push for Britain’s creative industries, including providing £26.4 million to help the National Theater upgrade its stage and tax breaks to encourage filmmakers to shoot more films in the UK.

The Government’s investment in the National Theater is designed to support urgent infrastructure upgrades at the iconic building on London’s South Bank and will be used to support repairs to the Olivier Theater’s scenic lifts and other failing theater systems.

Jeremy Hunt also announced plans to help the growing UK film industry, with studio space doubling in the past three years. “At the current rate of expansion, by the end of 2025, we will become the world’s second-largest film company after Hollywood,” Hunter said.

Under Wednesday’s budget measures, eligible film studios in England will be able to receive a 40% reduction in total business tax until 2034, with the tax reduction amounting to approximately £470 million over the next 10 years.

Independent film-makers will be helped by a new UK independent film tax credit scheme, which will charge a tax rate of 53% for films with a budget of less than £15 million, as long as they meet certain criteria. There will be further tax cuts on the cost of visual effects for movies and high-end television.

Hunter also said he would implement permanent tax breaks to help the performing arts during the epidemic, with a 45% tax break for touring and orchestral works and a 40% tax break for non-touring works.

Hunt told MPs: “Lord Lloyd Webber said this will be a once-in-a-generation transformational change that will ensure the UK remains a global capital for creativity.”

Ben Roberts, chief executive of the British Film Institute (BFI), which sets out UK film strategy and policy, called it “the most significant policy intervention since the 1990s”.

Adrian Wootton, chief executive of the British Film Commission, which is responsible for UK international film and television production, said, “In the face of increasingly fierce international competition, this will significantly promote the development of the UK’s world-class film and television industry.”

Sky Group chief executive Dana Strong said she was “delighted” the government was “delivering vital tax relief to allow the UK’s world-class film and TV production industry to continue to thrive”.

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“Today’s announcement brings confidence to the industry, unlocking jobs while providing a stable basis for future investment in the UK, such as our proposals for Northern Sky Studios in Elstree and NBCUniversal’s Jurassic 4 Shoot,” she said.

UK film industry trade bodies Pact and the BFI, which represent independent production and distribution companies, said they believed an increase in film tax credits would lead to more producers choosing to shoot films in the UK, sustaining jobs and creating new opportunities.

“The industry has reached a critical point and this intervention will provide a lifeline to independent filmmakers by giving them access to funding that will attract key creative talent, giving them the ability to recoup their initial investment,” said Covenant’s chief executive.