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Developer subsidies

Canada wins as UK government finds no grounds to make World Trade Organisation complaint.

February 11th 2009

Immediate release

Tiga said today that the Government’s drive to help the UK video games industry by lodging a complaint against Canada’s support for its games industry with the World Trade Organisation (WTO) had ended in a cul de sac. Tiga’s statement follows the Government’s admission that no rules on subsidies exist under the WTO General Agreement on Trade in Services. Therefore, there is no prospect of lodging a complaint to the WTO in relation to the extraordinary subsidies Canada provides to its video game producers.

Richard Wilson, CEO of Tiga, said:

“Last year the Government said that the UK via the European Union (EU) would take legal action against Canada if its support for its video games industry violated WTO rules. We now know that there are no legal grounds on which to lodge a complaint.

“We cannot stop our competitors from benefiting from tax breaks but there is a simple solution: copy them. Just as Australia, Canada, China, France, Singapore, South Korea and some American states help their games industries to grow through extensive tax breaks, so the UK Government should back our games industry with a tax break for games production. If you can’t beat them, join them.

“The Government stands naked before the games industry, bereft of a credible fiscal policy with which to support the sector. The Government should announce in the Budget its intention to introduce a 20% tax break for games production, similar to the EU approved French regime that applies to games that pass a cultural test. With a tax break of this kind in place, an additional £220 million would be invested, potentially creating a further 1,600 high quality jobs. This measure would cost HM Treasury £150 million over five years – a fraction of the recent £100 billion taxpayer bailout of the UK banking system.”


Notes to editors:

1. Tiga is the national trade association that represents games developers in the UK and in Europe. We have 154 members, the majority of whom are either independent games developers or in-house publisher owned developers. We also have outsourcing companies, technology businesses and university departments that are members.

2. Tiga’s vision is to make the UK the best place in the world to do games business. We focus on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members. This means that Tiga members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.

3. Gareth Thomas MP, Minister for Trade, Development and Consumer Affairs (jointly with the Department for International Development), confirmed that there was virtually no scope of bringing a complaint against Canada in relation to its support for its games producers in a written statement on January 29th 2009. See: http://www.publications.parliament.uk/pa/cm200809/cmhansrd/cm090129/text/90129w0018.htm

4. The figures relating to the cost and impact of a tax break for UK games producers were developed by Game Investor Consulting as part of the Games up? campaign.

5. On the recent Government bail out of the banks, see “Shorn bank shares, shaven poll ratings, shredded nerves”, The Economist, January 24th 2009.

6. For further information about Tiga, please contact: Dr Richard Wilson, Tiga CEO on:

E-Mail: richard.wilson@tiga.org

Web: www.tiga.org

Phone: 0845 0941095

Mobile: 07875 939643

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