TIGA: Games Tax Relief report "yielded real benefits"
Failed campaign was a sound one but HM Treasury "moved the goalposts", says Wilson
Industry trade body TIGA has spoken out following the Government's rejection of its proposal for tax relief for the UK games industry, saying the decision was a foregone conclusion but that real benefits have still resulted.
"Some observers have suggested that our proposal was rejected because the econometrics underpinning it was insufficiently robust," said TIGA CEO Richard Wilson. "Some at HM Treasury doubted our assumptions that absent Games Tax Relief job losses in the videogames industry would be permanently lost to the UK economy, believing instead that workers lost to the industry would simply move to other equally high-technology industries.
"It would be naive to accept this point at face value. This is a standard Treasury line. It ignores the evidence produced by the National Endowment for Science, Technology and the Arts (NESTA) about the threat of a brain drain from the UK games industry to competitor countries."
Yesterday Michael Rawlinson of ELSPA told GamesIndustry.biz Treasury officials had been unconvinced that a lack of fiscal measures would result in the industry's decline.
"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," he said.
But according to Wilson, these arguments miss the point.
"Digital Britain specifically invited TIGA to make the case for Games Tax Relief on cultural grounds. TIGA's report delivered this case, emphasising the cultural arguments for supporting a potentially high growth, knowledge intensive sector of the UK economy," he said.
"After we submitted our report HM Treasury then duly moved the goal posts, claiming that it does not support sector specific tax breaks.
"A senior civil servant from HM Treasury has confided that, irrespective of TIGA’s arguments, because of the state of the public finances and the parlous state of the UK economy, no commitment to Games Tax Relief could be made. The state of the current political cycle, with a general election fast approaching, created an additional hurdle for TIGA's campaign to surmount."
With around 900 trade associations in the UK it was rare for one to be official invited by the Government to make a case to change UK tax policy, he said, and the progress made by its report has still been beneficial for the industry.
"TIGA’s campaign for Games Tax Relief has yielded real benefits. The profile of the industry amongst ministers and policy makers has never been higher. Our campaign indirectly encouraged the Government to make its recent announcement concerning investing GBP 10 million in Abertay University and the centre for excellence in Manchester. Above all, the prospects for Games Tax Relief or a similar measure remain possible after a general election."
And the trade association said that it would continue to campaign for tax breaks or an equivalent fiscal reform, despite the setback.
"Only the faint hearted would give up now," concluded Wilson.