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Game over for industry incentive plan

THE region’s blossoming video games sector was dealt a major blow yesterday as plans to help make the sector more globally competitive were scrapped by the Government.

After years of campaigning to stop the UK falling behind other video games markets such as Canada and France – which are bolstered by tax breaks and incentives for games developers – the previous government finally succumbed to calls for action earlier this year.

Labour’s pre-election plan vowed to offer tax cuts to video games firms in a bid to stop the talent drain flowing from the UK overseas and to encourage big developers to invest in Britain.

However, chancellor George Osborne described the plan as “poorly targeted” yesterday and will instead introduce more generalised strategies to boost the private sector, such as corporation tax cuts.

Cumron Ashtiani, founder of Gateshead’s Atomhawk – which designs artwork for use in games - said the decision highlighted a major lack of appreciation from the UK Government of the importance of the digital and creative sector to the nation’s future.

“It’s been a real blow. We have been working really hard in the games industry for the last four or five years and to take this away when it finally looked like we were making headway, is difficult to stomach.

“We spend fortunes on training talent to go into the games industry and it all leaves the country.”

Darren Jobling, founder of Gateshead-based Eutechnyx – the region’s largest video games firm – said: “When Canada gives game developers 37.5% of their salary costs as a tax credit, developers in the UK are not competing on an even playing field and this makes it even tougher to compete during a worldwide recession.

“Having said that, I am personally against tax breaks and I agree that the tax credit system they were going to implement appeared flawed – favouring certain genres of game.

“I have always thought that the Government should apply pressure to remove tax breaks in countries such as Canada and France as they are fundamentally unfair.”

Meanwhile, Gareth Edmondson, who runs the Tyneside games studio Ubisoft Reflections and is also a member of industry organisation Tiga – that has long been lobbying the government for tax relief in the industry – said: “Tiga’s campaign for games tax relief has raised awareness about the video games industry in government and in parliament.

“The medium-term prospects for games tax relief are positive. Tiga will continue to strive to make the UK the best place to do games business.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .