Osborne should 'level the playing field' for UK gamers

George Osborne has been accused of short sightedness over his decision last year in the Emergency Budget to scrap tax relief for the video games industry; seemingly as a way to cajole him into unveiling it in the upcoming one on March 21st.

Taking issue with the chancellor’s move in June last year, Graham Chapman, deputy leader of Nottingham City Council, said not implementing the Labour-conceived tax breaks for games-makers was “a very short sighted policy.”

Pointing to a report from TIGA, the industry trade body, Mr Chapman said a tax relief system, loosely based on the credits given to UK film-makers, would generate (or save) thousands of gaming jobs, at the same time as increasing tax receipts.

In line with Mr Chapman’s letter, which was also sent to the Business Secretary Vince Cable, TIGA has urged the coalition to act in this month’s Budget, if the decline in Britain’s international standing as a games creator is to be stopped.

Five years ago, the UK ranked third in the world - when measured by size of its video games output, whereas it is now in sixth place, having lost out to countries such as the USA, Canada and South Korea, where state subsidies and tax breaks are available.

Scaling the issue down to a regional level, Mr Chapman said games developers in his city were already being poached by publishers based in the three rival countries, undermining competitiveness now, but potentially threatening the UK industry’s “very existence” in the long-term.

“The projected annual growth rate for the online video games market is 21.3% between 2010 and 2014,” the council deputy wrote in his letter.

“At over £2billion in global sales, the UK’s video games sector is bigger than either its film or music industries. Harnessing this would have a significant and very positive effect on the growth of companies and the numbers of people employed”.

He added that recent talks with the sector’s captains have highlighted that while the Canadian games market is growing, the opposite is the case in the UK, despite all the evidence suggesting that the industry is growing overall.

Mr Osborne was told: “I would urge you to review this policy, as a matter of urgency and introduce a tax relief system that will help ‘level the playing field’ for the games development industry in Nottingham and the UK.”


8th March 2012

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