A report into the British film and television industries published today by the House of Lords Communications Committee has recommended that the Government provides tax breaks to UK games businesses.
The report comes following the Government's failure to include such legislation in its latest Pre-Budget Report, even after extensive lobbying by trade association TIGA.
"We recognise the claims of the videogames industry for support in the face of foreign government-subsidised competition, and recommend that the Government consider providing tax incentives for videogames production," said the report.
In response, Richard Wilson, CEO of TIGA said that the trade body was encouraged by the backing.
"It is very encouraging that the cross-party, highly respected House of Lords Communications Committee has recommended that the Government should consider providing tax incentives for videogames production," he said.
"We know that the Department of Culture, Media and Sport's priority is to introduce Games Tax Relief. Additionally, Ed Vaizey MP, Conservative Shadow Arts Minister, said at a Westminster Forum event on January 21 2010 that while he could not make a firm promise, he would want to introduce a tax measure supportive of the videogames sector within two to three years of a Conservative administration, if the Party was to be elected to Government in the general election this year.
"TIGA's Games Tax Relief campaign is gaining significant supporters. We will continue to advance the case to HM Treasury."
TIGA made the case to Government that the UK games industry is under threat from subsidised production overseas - such as in Quebec, where the industry workforce has grown 52 per cent in two years (compared to 8 per cent in the UK) because of its generous tax breaks.
It called for a tax break of 20 per cent for going into production - a measure it deemed the bare minimum of assistance required by UK businesses.
The Government however was unpersuaded the evidence for such a tax break was "sufficiently compelling" according to treasury officials, who told the industry to "keep working at it."