Government Must Do More to Support Video Games Sector

By October 26, 2010 Press Releases

TIGA, the trade association representing the UK games industry, said today that the Coalition Government needed to do more to help potentially dynamic sectors of the economy, including the video games sector, to achieve their potential. TIGA made the comments in response to a speech yesterday by the Prime Minister, the Rt Hon David Cameron MP, to the Confederation of British Industry (CBI), in which he said that “…part of our strategy is getting behind those industries where Britain already enjoys competitive advantages. All over the world, governments are identifying dynamic sectors in their economy and working strategically to strengthen them.””

Dr Richard Wilson, TIGA CEO, said:

“The UK video game development sector is one of the industries that the Coalition Government should be supporting as part of a strategy for growth. It provides high skilled employment, with some studios reporting that 80 per cent of their staff are qualified to degree level. It is export oriented: on average 62 per cent of a UK developers’ turnover is generated through exports. It is R&D intensive, with two fifths of studios having a budget for R&D purposes. The sector is low carbon in nature: most of the work in games development involves design on computers, the packaging in games is minimal and box products are relatively light to manufacture and to transport.

“Yet at a time when the video games industry is growing globally, employment in the UK development sector is shrinking. Between July 2008 and March 2010, 7 per cent of the development workforce lost their jobs. The UK video games industry is not competing on a level playing field. Our key competitors, particularly Canada, have tax breaks for games production. The UK does not. The Coalition Government’s decision to drop Games Tax Relief in the June Budget has left our industry at a serious disadvantage vis-a-vis our overseas competitors. We are losing the global battle for job creation and investment.

“If the Coalition Government wants the UK to be open for business, to attract overseas investment, to create highly skilled jobs and to generate wealth, then it must introduce Games Tax Relief. TIGA research shows that over a five year period Games Tax Relief could create or save 3,550 graduate levels jobs, secure £457 million in new and saved development expenditure and generate £415 million in new and saved tax receipts. Significantly, Games Tax Relief would more than pay for itself as the cost of introducing the Relief to the Treasury would amount to £192 million over five years.

“As the PM noted in his speech yesterday, governments around the world are focussing on sectors with potential to strengthen them. The Coalition Government should follow suit: it should introduce Games Tax Relief to enable the industry to create jobs, investment and wealth.””

Ends

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