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Vaizey: "Industry isn't going to fall over" without tax breaks

Wed 14 Jul 2010 9:53am GMT / 5:53am EDT / 2:53am PDT
PoliticsGames

MP sidesteps questioning on whether tax relief can still happen. UPDATE: Video of full Develop address available

Speaking at the Develop conference today, culture minister Ed Vaizey was elusive on whether he personally would continue to campaign for tax relief for the games industry, and as to whether the industry should continue to push for it.

Responding to GamesIndustry.biz's question as to whether the tax relief ship had sailed and the industry should be looking to alternatives instead, the parliamentary Under-Secretary of State said "By all means regroup, look carefully at the incentives the industry needs."

"There's a recognition from US companies that they must become much more closely involved in this debate," he said, but avoided confirming that he would himself be pushing for tax relief in the future. "I can't emphasise enough that I am not the chancellor, it's just in my view that the treasury's always open to rational argument and debate. If you take the opportunity after the budget to regroup and think about the opportunities for foreign investment and to compete across the world...

"It's good to see the industry working together on this. I don't have any problem with the industry continuing to campaign for the measure its needs. But the treasury has a huge number of competing pressures on it, there will be other people with their own agenda pushing their issues on the treasury."

In reply by a question from TIGA boss Richard Wilson as to whether the industry could expect direct help from Vaizey on convincing the treasury to adopt tax relief, he said "To put it bluntly: you haven't made the case because the chancellor didn't accept it. You have to go back to the drawing board and start again." While he was evasive on what his own efforts would be from hereon in, he claimed that his door remained open to the industry and that "We have to work together to present a realistic case to the treasury."

On concerns that the loss of tax relief would lead to Canada scooping up publisher interest, Vaizey said "I would counsel against a counsel of despair. Canada has its attractions and they are financial attractions, but this country has attractions too." He stressed the appeal of Britain's culture and talent pool. "There is still a massively strong pull to invest in this country. I personally think this industry has a fantastic future. I want to work with the industry and help you."

Once again hinting that he may no longer be actively pushing for tax relief, he said "I don't think that because we don't have tax breaks the industry is going to fall over."

However, Vaizey did today launch a previously revealed 2 million fund in association with Abertay to help small video games companies, and stated that industry luminaries such as Charles Cecil and Ian Livingstone would be advising on improving training and opportunities for young people looking to enter the industry.

He also repeated David Cameron's argument that chancellor George Obsborne's "macro" stance on tax for businesses, including lowered corporation tax and national insurance payments for smaller companies, would ultimately prove helpful to the games industry.

Ed Vaizey's full address to Develop can be watched below:

Ed Vaizey's speech to Develop.

25 Comments

Russell Watson
Senior Designer

82 28 0.3
"While he fell short of describing what his own efforts would be, he claimed that his door remained open to the industry"

"There is still a massively strong pull to invest in this country. I personally think this industry has a fantastic future. I want to work with the industry and help you."

Well for a start, would it be too much to ask how you intend to help and what your efforts would be?

Sorry but I read this as more lip service. Does anyone want to point out whats wrong with that *second last paragraph? Colour me pessimistic :/

Edited 3 times. Last edit by Russell Watson on 14th July 2010 11:36am

Posted:3 years ago

#1
Well at the conference, there was a pretty non commital answer and after fielding questions from TIGA and BBC news, (reading between the lines) I feel that overall Osborne and co will not offer games tax per se. So alternative strategies for more game related incentives/prominent and incentives to promote UK games growth and foreign investment in UK games development is key.

Posted:3 years ago

#2

Robert Farr (Graduate)
Studying BA Hons Creative Computer Games Design

4 0 0.0
This came out as pretty much what I expected. The government wants to pursue policies that make it more attractive for all business' to come to the UK, rather than a tax break that's industry specific.

Posted:3 years ago

#3

Robin Clarke
Producer

18 0 0.0
Vaizey, (n.): Decorative vessel for the presentation of superficially attractive displays, glazed over with a thin veneer of enthusiasm but ultimately hollow.

Posted:3 years ago

#4

Shaun Mulvey
Marketing Manager

3 0 0.0
I'm attending BBC's Question Time in Bexhill tomorrow and have submitted my question around the Goverments backtrack and percieved lack of support.

Does anyone have any particular question they want raised during the debate over this?

Posted:3 years ago

#5
Yeah. Lets help the govertment get some REAL perspective.

We would like to help them get some real good growth sales and % GDP that games and entertainment industry provided.

The numbers bandied about today seemed dismal. 2 billion in UK sales alone. Lets talk more about this 50-60 billion pound worth industry that represents some of the best services that UK does next to banking.

Lets face it, industrial sector is more of modern and future tech related (compared to traditional manufacturing industries), however banking, games, animation and film are high profitable, low carbon footprint, cross sector growth stimulants and overall goof for the worldwide masses.

Posted:3 years ago

#6

Stewart Gilray
Managing Director

29 23 0.8
Shaun, who is on that Question Time panel?

Posted:3 years ago

#7

Finlay Thewlis
Studying Game Design & Production Management

26 0 0.0
tell them not to renew trident then everyone wins

Posted:3 years ago

#8

Kingman Cheng
Illustrator and Animator

929 150 0.2
Tell them to cut the entire defence budget because despite the amount we spend on it we couldn't even prevent 7/7, good going.

Posted:3 years ago

#9
This is typical Britain unfortunately. He is saying the UK will train the staff by assisting the universities etc. THEN what will happen, oh like it is doing now, they will move overseas. So yet again a shortsighted UK government will drive skilled (and therefore tax PAYING NOT DOLE COLLECTING) people overseas. Would love to be proven wrong but history goes against him And in our industry, trust me, the UK is not the only place to live. Great Brits perhaps but a lot of these are now in the USA, Canada and Australia, me included.

Posted:3 years ago

#10
This is typical Britain unfortunately. He is saying the UK will train the staff by assisting the universities etc. THEN what will happen, oh like it is doing now, they will move overseas. So yet again a shortsighted UK government will drive skilled (and therefore tax PAYING NOT DOLE COLLECTING) people overseas. Would love to be proven wrong but history goes against him And in our industry, trust me, the UK is not the only place to live. Great Brits perhaps but a lot of these are now in the USA, Canada and Australia, me included.

Posted:3 years ago

#11
This from a whitehall that loves UAV spy drones, biometrics, RFID powder, CCTV, extra sensitive microphones doted aroudn London listening on your every terror related speech.

hehehe. Good luck!

Posted:3 years ago

#12

Kingman Cheng
Illustrator and Animator

929 150 0.2
Why can't you just let a man dream Dr. Wong? ;(

Posted:3 years ago

#13

Finlay Thewlis
Studying Game Design & Production Management

26 0 0.0
@ kingman cheng eh?

Posted:3 years ago

#14

Shaun Mulvey
Marketing Manager

3 0 0.0
@ Stewart Gilray- Stewart, the researcher i spoke to confirmed Andy Burnham but Ed Vaizey is on the shortlist list of possible panel members. Just hoping there is no Keith Vaz...

Posted:3 years ago

#15

Jason Sartor
Copy editor/Videographer

105 33 0.3
On concerns that the loss of tax relief would lead to Canada scooping up publisher interest, Vaizey said "I would counsel against a counsel of despair. Canada has its attractions and they are financial attractions, but this country has attractions too." He stressed the appeal of Britain's culture and talent pool. "

Does he really mean to imply that Canada has a dearth of talent or culture to offer perspective workers?

That seems rather narrow-minded considering the history the two countries share, common culture in many regards, and Canada's unique French culture, passion of hockey and the amazing outdoors it offers, etc., etc.

Both countries offer people what they most desire. Human rights, independence, a chance to pursue happiness.

Also, is the experience of buying a game at HMV in London vastly different or superior to buying a game at HMV in Toronto?

Posted:3 years ago

#16
If I were an outsider it would be a simple matter of pros/cons.

Simply put, Canada have rolled out the red carpet for ANY investor in games development to come, set up roots, enjoy the culture, and supportive pro games environment and make a profit whilst at it.

Whats not to hate about Canadas offer

Now look at UK's offering on the plate at the moment:

- Strong creative talent
- historical rich culture

vs

- General disdain/poor governmental support for games
- Red tape +++, high corporation tax (so what if it will be lower eventualy, its not happening in the next 3-4 years), high business rates, high cost of living
- R&D credit rebates are not going to help anyone soon, because the long/short of it simply is thus whether a SME or established studio be, cashflow is king and the overall environment is hostile towards nurturing a hollistic growth.

At the end of the day, most game devs are passionate about developing good games and IP and are pro profit generation. We just dont want unnecessary hurdles, floatsam and jetsam to clog up our line of sight in doing so, and to be tripped up in the process.

Posted:3 years ago

#17

Gregory Keenan

102 11 0.1
Not liking the idea of taking defence spending away.... plus not renewing trident won't save money for at least 5 more years any ways. I would also like to add that in my experience - people who call for defence cuts have no experience/knowledge as to why we even have a military - therefore their opinion is made out of assumptions and an uniformed "it would save money"

Posted:3 years ago

#18

Jordi Rovira i Bonet
Lead Engineer

17 8 0.5
Not being British or working for a British company my opinion might not be relevant, but the title of this article is hard to disagree with. The video games industry is big and powerful. It makes a lot of money. The UK is leading this industry in Europe. Why are the tax breaks justified?

Yes, it might be shrinking a bit. Yes, some companies, big and small, are having some problems but do the industry need the help from the government?

This kind of measures are usually to rescue an industry in trouble, or to help to grow a new industry. I don't think the UK videogames industry can grow much more and i don't think it is in danger.

Of course it is a democracy and i think it is perfectly fine to let people cry "Hey government, give me money!" and it is always healthy to bash some politicians.

Posted:3 years ago

#19

Jay Crowe
Creative Director

17 0 0.0
Being British but not working for a British company, my opinion should hopefully be relevant, and the title of the article is easy to pick holes in. The video games industry is big and powerful. It makes a lot of money. The UK is required to remain competetive against agressive growth policies in other countries combined with reletively low labour costs. Tax breaks are justified by a particular economic philosophy, rooted in the notion encouraging growth by slashing taxes will ultimately create more revenue. Mind you, the less said about economists the better.

Yes, it might be shrinking a bit. Yes, some companies, big and small, are having some problems and any company director/ CFO worth his salt will quickly try to reverse that trend.

This kind of measures are usually to stimulate an industry in transitional business climates, or to help to grow a new industry. I think the UK videogames industry can grow much more and i think it is in danger of losing the reputation it has worked so hard to achieve.

Of course it is a capitalist democracy and i think it is perfectly normal for people cry "Hey government, give me some of my own money back!" and it is always healthy (and enjoyable) to bash some politicians.

Posted:3 years ago

#20

Finlay Thewlis
Studying Game Design & Production Management

26 0 0.0
@ Gregory - I didn't say anything about defence cuts, just trident. 16 billion for something we shouldn/t and don't want to use, think what that money could go on! Tax breaks for the games industry just one of the many wonderful things

Posted:3 years ago

#21

Charles Bows
Marketing/PR/Sponsorship

2 0 0.0
I must admit that I was a litttle disappointed by the apparent lack of understanding that Ed seemed to have of what the games industry was really after.

It was quite apparent - to me anyway - that he didn't seem comfortable in actually being there after the chancellor said that there would be no tax relief for the games industry (developers). This was self evident I felt in his inability to look the audience in the face, he was clearly just reading out aloud what Cameron, Osbourne and Cable had told him to say.

Apart from right at the end, he didn't seem to be able to relax. Lets hope he is able to keep his promise of keeping the door to his office open.

Posted:3 years ago

#22
It may be open, but what % of ground penetration will be able to filter through is another matter. Perhaps somethign short of an all out assault by the enitre gaming industry with the occasional heavy pushing/shoving on the whitehall door may provide some real impetus circa 2010/2011.

Naturally if the famed disclosure appears before then, its all a moot point :)

Posted:3 years ago

#23

Andrew Crystall
Designer

13 0 0.0
It is, and always has been, putting games on the same footing as the other UK creative arts in terms of funding. They are some of the highest-returning tax incentives in the country, for example 13-1 for films (i.e. for every 1 of tax breaks, the Government gets 13 tax in return).

This is not, and never has been, an economic argument and I believe it is fundamentally unwinable because it is based on ideology, not economics.

Posted:3 years ago

#24
Someone get us a gokwan makeover for games!

Posted:3 years ago

#25

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