UK govt: Case for games tax relief is "coming together"

Stephen Timms MP, Minister for Digital Britain, has offered renewed hope to the UK games sector, revealing the argument for tax breaks is "getting stronger", with an "update" likely in this month's Budget.

The Minister argued, in an exclusive interview with GamesIndustry.biz, that "things have changed over the past couple of years", with the industry now viewed by the government as well placed to help drive economic recovery.

With the UK "emerging" from the economic downturn, Timms insisted fellow ministers were clear on the "need to support those parts of UK commerce with the best prospects for growth in the future".

He said: "What has been lacking in my mind up until now is some really strong factual evidence [for tax relief]. I think we are now starting to see that coming together."

Timms, who also serves as financial secretary to the Treasury, added: "I think there's no doubt - the government is in no doubt - that the computer games sector is one part of the economy where we can see very good prospects for growth in the future. So we're looking at the industry in a new way as we're looking at the economy in a new way – as one of the contributors to what we need to see in the UK as we come out of this very deep and difficult economic worldwide problem."

The call for tax credits - to bring gaming in line with benefits already enjoyed by the film industry and stem the flow of talent to other territories - was dealt an apparent blow in last December's Pre-Budget Report, which claimed evidence presented by the industry was not "sufficiently compelling". It later emerged that the Treasury had been unconvinced by supplied data on job-loss forecasts.

"There is, quite rightly, a reluctance on the part of government, in the absence of really compelling evidence, to make the kind of change that's being asked for," said Timms. "But the industry is building its case.

"As you know, we've got a Budget between now and a general election on March 24, so that'll be the point we'll be able to provide an update of where we've got to."

Pressed on whether this would mean good news for the games industry, the MP for East Ham said: "I think that will become clear when the Chancellor has made his announcement on Budget day." Asked for his personal view, he added: "I completely understand the pressure people in the industry feel under over this. I think they need to understand the need for a pretty compelling argument. I think [the evidence is] getting stronger."

Timms dismissed suggestions that a lack of government support was harming the UK's global competitiveness in gaming, citing the recent investment of £2.5m in Scotland's University of Abertay as evidence that this "is an industry the government wants to support and put resources behind."

"I was very encouraged by what I saw there, the links between that university and local games developers," he explained, referring to a recent visit. "And I welcome the announcement that Microsoft has made with the investment of games in Rare Birmingham, so we're seeing some positive developments as well as some pretty big challenges that people in this industry are having to face."

Gordon Brown, the British Prime Minister, last month name-checked the games industry while claiming the UK was "leading the way in creative industries".

Timms insisted this was not mere lip-service. "He's seen the numbers; as a Scottish MP he's very well aware of what's happening in Dundee. So comments like that reflect a wider enthusiasm in government and an admiration, frankly, for what this industry has achieved, and a recognition of its very big future potential."

The Conservatives, whose lead over Labour in opinion polls has narrowed in recent months, have also been vocal in their support of the games sector, with Shadow Arts Minister Ed Vaizey claiming it would be his "number one priority" to ensure a "level playing field" for the industry were the Tories elected.

Last month, Labour MP and Gamers' Voice founder Tom Watson put forward an Early Day Motion with cross-party support, calling on the government to include a tax break for the industry in the next Budget.