TIGA, the trade association representing the UK
games industry, said today that the opportunities for the Scottish video games
industry were considerable and that if Games Tax Relief and other key measures
were introduced then the industry could make an important contribution to the
Scottish and wider UK economic recovery. TIGA made the comments and published
data about the sector to coincide with the inaugural meeting of the Cross
Party Group on Video Games Technology at the Scottish Parliamenton March 8th. The meeting
was attended by MSPs from across the political spectrum, chaired by Joe
FitzPatrick MSP, Convenor of the Group, and John Swinney MSP, Cabinet Secretary
for Finance and Sustainable Growth.
TIGA research shows that the Scottish video
games industry:
- contributes £74 million to the UK’s GDP;
- generates £30 million in tax revenues to HM
Treasury; - supports 2,000 jobs, including around 700 in
game development; and - has 50 studios making games for mobile, online,
casual, educational and console markets. Scottish studios including
Rockstar North, Denki, Tag Games, Dynamo Games, 4J, Digital Goldfish,
Firebrand, and Proper Games have a track record in developing successful and
critically acclaimed video games.
John Swinney Cabinet Secretary for Finance and Sustainable Growth
addressed the first meeting of the Cross Party Group on Video Games Technology
at the Scottish Parliament and outlined the efforts being made by the Scottish
Government to promote growth in the economy. He also pointed out that
Westminster retains control over the wider tax system, which is the key tool
that has been leveraged to support games developers abroad.
In a recent speech at the Hume Institute on 2 February, John Swinney
said,
“One area the
government is particularly interested in is using the tax system to better
support sectors facing specific challenges.
“To many, using
taxation to promote competitiveness is just about the headline rate of
corporation tax. It is not, and as the global economy becomes more integrated
we have to be smarter and more flexible in the way we use tax powers.
“For example, in the
past the UK Government has specifically provided support to the film industry,
through eligibility for Film Tax Relief (FTR).
“We want to see the
same relief system applied to one of our growth industries – computer games.
Indeed the previous UK Government eventually agreed to consider such a tax
break only for the current UK Government to abandon it.
“Developers in
Scotland are at a distinct disadvantage.
“In Quebec, the
government pays a third of salary costs of development staff and offers tax
holidays for investors. The incentives have prompted publishers to set up
studios in Montreal, often downscaling investment here. Australia, South Korea
and the US offer similar incentives.”
Convener Joe FitzPatrick, the MSP for Dundee City West said:
“It has
long been my ambition to create a Cross Party Group to deal specifically with
video games technology and I’m pleased it has got off to such a successful
start.”
“One of
the key issues that Mr Swinney highlighted was the need to encourage banks to
lend more to promising businesses. While regulation of the banking sector
remains a reserved power, Mr Swinney pointed out that the Scottish Government
recently established a Scottish Investment Back to try and tackle this issue
through a variety of funding programmes. The Cabinet Secretary was keen to
emphasise that the SIB is very much, ‘open for business.’”
Dr Richard Wilson, TIGA CEO, who addressed the
Cross Party Group, said:
“The opportunities for the Scottish video games industry are
considerable. Yet if we are to realise the potential of the Scottish video
games industry, then we need to introduce Games Tax Relief in order to create a
propitious tax environment for games development. If Games Tax Relief was
implemented in Scotland then over five years the tax credit would generate
several hundred highly skilled jobs, £12 million in investment, £11 million in
tax revenues and £27 million in GDP contributions. Games development provides a
great opportunity for the Scottish and indeed the UK economy. With Games Tax
Relief in place we can realise this opportunity.”
Shona Robison MSP (Dundee City East), who was also present at the
meeting, said:
“The global video games industry has grown dramatically in recent years
in spite of the financial crisis and it is expected to continue to grow at a
fast pace in years to come.”
“We all want to see the sector here in Scotland take advantage of that
projected growth and create highly skilled jobs, not least for our young
graduates.”
Joe FitzPatrick, who has also written separately to the Chancellor of
the Exchequer to urge him to extend support for the sector, went on to say:
“While
there can be no doubt about the talent, ambition and determination of Scottish
developers, we simply cannot ignore the fact that they face significant
competition from overseas competitors, where governments offer a range of tax
breaks and credits.”
“TIGA’s
proposals for a targeted Games Tax Relief would put our developers on a level
playing field and would generate a return for the UK Treasury of £1.21 for
every £1 that was invested.”
“In
spite of a broad consensus in favour of a tax relief for the games sector over
the last few years, successive UK Governments have failed to take decisive
action to support the industry.”
“It is
vitally important that the Chancellor includes support for the video games
industry in his forthcoming budget later this month. We cannot simply sit back
while companies abroad reap the rewards of a growing market while our own
struggle to make ends meet.”
The Cross Party group discussed a range of issues in addition to Games
Tax Relief, in particular the need for more to be done to improve access to
finance and to support and encourage start-up studios. ENDS