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UK govt 'unconvinced' on industry job loss claims

Business missed out on tax breaks because Treasury "didn't believe" evidence; but proposal can be "refined" insists ELSPA

ELSPA director-general Michael Rawlinson has shed new light on the Government's rejection of tax relief for the UK games sector, insisting the proposal is "not dead" but warning that the industry must not become "fixated on just one solution".

Speaking exclusively to, Rawlinson revealed he had met with Treasury officials following the Government's Pre-Budget Report (PBR), which dismissed the evidence for a tax incentive as not "sufficiently compelling" - who told the industry to "keep working at it".

Despite a pledge by the Government in June's Digital Britain report to examine the evidence for tax breaks, Rawlinson said he "wasn't surprised" by the PBR snub. He explained: "The Treasury has a fundamental dislike for sector-specific tax measures, so we went saying: 'games industry, we're different from everybody else', and that goes against their fundamentals."

He insisted, however, that there was still a "political will to look at it," adding: "We were told at a meeting this week to keep working at it, to refine the arguments, to refine the evidence, to try and look for relationships with our industries to other industries where we can get a bigger voice.

"So rather than it being sector-specific, maybe it can go across animation, TV, film and broaden it out a bit. It's not dead, but it won't be happening for a while given the current economic climate."

Asked what the Treasury had found insufficiently "compelling" with the argument, Rawlinson revealed: "The evidence said that if fiscal measures weren't put in place, the industry would decline and the skilled workforce would leave the British economy lock, stock and barrel.

"If there were 3000 jobs lost to Canada that was 3000 people that were no longer going to be employed in the UK. And the Treasury said they didn't believe that would be the case. They thought a reasonable proportion of those people would go and find other jobs using their skills in the British economy. Therefore the overall effect to the British economy would not be so devastating."

Rawlinson admitted the matter was off the table for now, with the economy struggling and a general election looming, insisting ELSPA would continue to pursue other opportunities.

"We can't be fixated on just one solution. Sometimes you've got to recognise that it's going to take time if you're going to get it at all, so we mustn't lose sight of other opportunities and that's what ELSPA will be focusing on particularly," he said.

"The Government are investing in our sector and in videogames directly and we need to look at ways we can extract more value from that relationship. We can't necessarily expect a continuation even if Labour stay in power, so we need to be on the front foot. I'm meeting regularly with ministers from different departments to explore ideas with them and their officials."

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Latest comments (1)

robert troughton Managing Director, Coconut Lizard11 years ago
If they want evidence, a starting point would be to look at such as Midway Newcastle and what happened there... Midway Newcastle had over 80 people. I've heard of at least 5 of those going to Canada - and about 10 others had strongly considered the move... of the latter, the main reason for not going was due to them being unable/unwilling to sell their houses at the current devaluated prices... if it weren't for the poor situation with house prices here, they'd be in Canada already.
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