Supporting the Break

Of all the assorted political and financial issues which face the videogames business in the UK, few are quite so divisive as the question of tax breaks for game development. Addressing this topic in a public forum invites a torrent of passionate missives from both sides of the argument - those who favour government support for the industry through targeted tax cuts, and those who argue fervently that business should stand on its own feet, as they see it, without turning to the public purse for help.

The reason why this is such a divisive issue is simple - it's because it cuts to the very heart of one of the crucial divides in fundamental political beliefs. In the wake of the massively unpopular bank bail-outs, and with highly politically motivated messages about crippling national debt floating around (few of which are supported by any genuinely persuasive figures, but neither journalists nor politicians are keen to allow facts to get in the way of a good story), the climate has become even more chilly for industries seeking government support.

Arguments against tax breaks, in this climate, can be extremely bitter indeed. The phrase "begging bowl" is bandied about. Industries not strong enough to survive should adapt or die, we're told - and that's not entirely an unfair sentiment, of course. It's an argument I'd personally apply to media industries wrong-footed by the Internet and presently running to hide behind the Government's skirts, demanding that Peter Mandelson protect their failing business models with dangerously authoritarian legislation.

These are, however, utterly unfair arguments and metaphors to employ in the discussion about development tax breaks. The hostility of the response from some quarters belies the ignorance from which such arguments often spring. They misrepresent not only the position and requests of game developers, but the very nature of government and its role in the nation's commercial development.

Game development is not a failing business. In fact, it remains a rapidly growing business, addressing an increasingly wide consumer demographic with a diversifying range of product types. Revenues rise sharply year on year - yes, even through the global recession. There is no evidence of slow-down (a curious form of pessimistic confirmation bias means that reporting focuses heavily on job losses rather than job creation - the reality is that the latter healthily outbalances the former) and no sign of the top of the curve being reached.

That's the global picture. In the UK, however, we see the signs of an uneven playing field all too clearly. Despite presently enjoying a temporary uplift thanks to the weakness of the pound on the currency markets, developers in this country are faced with an unappetising long-term prospect - forced to compete for business with rivals in territories such as Canada, France, Singapore, China and elsewhere, all of which offer enticing tax benefits to the development business.