TIGA talks tax
Following the disappointing but not shocking cancellation of planned tax relief for the games industry in the UK's emergency budget this week, GamesIndustry.biz spoke to Richard Wilson, CEO of TIGA about the trade association's next move.
TIGA has been perhaps the most tireless advocate of tax relief. Wilson told GamesIndustry.biz why he'll keep fighting for it - as well as addressing rumours of sabotage by a major global publisher.
Q: How are things?
Richard Wilson: Pretty distressed and disappointed by the budget, otherwise I'm in good form.
Q: It's really sad news, doesn't make sense - so much money could have been made for the UK economy.
Richard Wilson: We won't give up on that. We're regrouping, we're relaunching our campaign, I am always optimistic on this issue, but I really do think we will win. in the end. It's official Labour party policy, it's official Scottish National party policy, it was official Lib dem policy, I think we can turn it around.
Q: How do you think Vaizey's going to do at Develop? Will he go through with the appearance?
Richard Wilson: Oh yes. I'm sure Vaizey will come down to Develop and I'm sure everybody will lobe very polite to him. I do think Ed Vaizey does genuinely want games tax relief.
It's the usual thing, the treasury are the people we have to convince. I think it's really crucial that Jeremy Hunt, the secretary of state for culture, media and sport, and Vince Cable, secretary of business, innovation and skills have both come out strongly.
I know they can't come out strongly in the open, but I hope they come out strongly in discussions with their cabinet colleagues and in discussions with the treasury in particular, because Vince cable knows how important the videogames industry is, I'm sure he wants to help high-technology businesses and exporters, and equally Jeremy Hunt he must support - or he does support - the creative sectors. So I really hope that both those cabinet ministers will put pressure, or bring their charm and power to bear on George Osborne. It's really very important actually.
Q: Do you think Osborne specifically is the stopping point here, or is it more to do with a wider, endemic disinterest or even contempt for the videogames industry in this government?
Richard Wilson: Well I think the key people in the government who need to be convinced are definitely George, and also I think David Gauke, the exchequer secretary, who is probably fairly invisible actually, externally. But he is a very, very important man. I think he's a very reasonable man from what I can see, but we need to convince him.
But that question about whether the videogame industry is taken seriously or not, one doesn't want to appear as if one has a chip on one's shoulder, but you can't help thinking that so many other sectors in the economy get special treatment, for some reason videogames are so often overlooked. So I'm hoping this government is going to be grown-up and mature enough to recognise that videogames industry is the industry of the future, and give it the support it deserves.
Q: Yes - it earned something like 44% more last year than the film industry, and obviously that gets its fair-share of leg-ups from the government...
Richard Wilson: Yes, that's right. The videogames industry ticks all the right boxes, it's export-orientated, 91% of our developers export their products, which is incredible figure. Only about a third of small business in the UK generally export so, the game industry's way above average in terms of exporting.
It's very R&D intensive, so about 2/5ths of UK games businesses have specific R&D budget, which again is above the national average. 60-80% of staff in a studio are qualified to degree level, wage rates above the average rates of pay... I'm sorry, you know all this but I think these are important points we need to bring out. We're going to do so.
Q: Do you think there's any credence at all to this report that a major publisher has somehow convinced the government to drop tax relief?
Richard Wilson: The truth of the matter is I don't know. What I would say is that this really concerns the fact that TIGA has been a reliable and consistent organisation to campaign against tax relief over the last couple of years.
This has been our top-level policy, you may have seen our publisher manifesto in march, which actually suggested 25 different policies for the games industry, only one of which is games tax relief, so I think we have looked at a wide agenda of issues across our sector. But nonetheless games tax relief has been our signature policy. We've been the only organisation to push this forwards consistently and rigorously.
Q: Based on all the hard work you guys have did with pushing forwards tax relief, do you think when there's a report and a feeling out like that saying "ooh, it's a sinister baddie in the shadows", does that undermine what you guys did?
Richard Wilson: Well I suppose the truth of the matter is we don't know whether it's true, first of all. We simply don't know whether it's true or not. What I would say actually is I think the key thing is, rather than to look for any scapegoat in the industry at home or aboard, to focus on the conservative party and the liberal democrats.
They both promised before the election they would give us games tax relief. We want them to honour that commitment. Not because we feel emotionally let down, though obviously it's incredibly disappointing, but because it's good for the UK games industry, it's good for the UK economy, it's good for UK society.
It makes sense for the conservative party and liberal democrat coalition to introduce videogames tax relief because of all he figures that we were discussing earlier on. So we think that rather looking to see whether there's Machiavellian machinations going on in the background, what's really important is to focus on the coalition government and especially on the treasury to convince them that they should adopt games tax relief.
What I would say though is that TIGA is making a call to arms to everybody in the games industry, both developers and publishers, to work with TIGA, to support TIGA, to make sure we do get games tax relief.
Q: Can you, though, envisage a situation where the government would respond to publisher action like that. Is it even possible, is there a precedent for it?
Richard Wilson: I suppose in many industries, you'll never get a sort of unanimity on policy issue, I'm not an expert in, for the sake of argument, the telephone industry, but I dare say, I suppose we both know don't we that, that sometimes the interests of, for example, BT, are not the same as the interests of Orange or Virgin.
So you won't always get unanimity in any sector. But I think what we have demonstrated over the last few years is that TIGA has supported a coalition of developers and publishers who have been supportive of games tax relief, who have supported major political parties and significant politicians to back our campaign, and we have made real progress.
It's easy to forget that after the budget but we have made real progress, mentioned in the last budget in march, in party manifestos. Two years ago, we were nowhere. We weren't on anyone's radar screen. It's completely different today. Even if there is, and we don't know, or has been a publisher arguing against games tax relief, they're not going to win. We've won the argument. We're going to continue with the arguments, and we are going to get it established.
Q: Have you ever had any sense previously that there is someone outside of government pushing against you and against tax relief - is the first you've heard of there being a dark opposite of TIGA?
Richard Wilson: [Laughs] I shouldn't laugh, it's just such a lovely question, "a dark opposite."
Q: The Anti-TIGA...
Richard Wilson: [Laughs] Yes, what I would say is you don't always get unanimity in any trade sector. I won't go beyond that. I know it's an interesting story, but I think it's really important for everybody in the games industry, developers and publishers, both UK based and overseas, to remember that we do have it in our grasp to get games tax relief introduced.
Q: It does seems rather unlikely that there is a sinister man in the shadows who's able to snap his fingers and suddenly the government changes its mind.
Richard Wilson: If there was a sinister man in the shadows and he or she snapped their fingers, then it wouldn't say a great deal for our political leaders. Because obviously we put forward a substantive, well-presented proposal. It wasn't just dreamed up by Richard Wilson in his home, I wrote the report with Rick Gibson and Paul Gardener - Paul Gardener from Osborne Clarke, Rick Gibson from Games Investor Consulting. It was a good report, it carried weight and it will continue to carry weight.
We're going to continue to refine the argument of course, most importantly update our figures, it's important that we try to round-off any weakness in the argument. Whatever argument we put forward can always be improved upon, but we believe that have put forward a strong case and we will continue to do so.
Q: Do you know what those revisions will be yet?
Richard Wilson: It is still planning stages, but I do say that... the government's going to have a pre-budget report, and there certainly will be departmental spending announced for those in October, which will go towards the budget next March. I'm not just saying this for the sake of it - I really do believe that we'll be successful.
Richard Wilson is CEO of TIGA. Interview by Alec Meer.