Deputy Minister for Video Games Slams Grand Theft Auto as Unimportant
Jim McGovern MP is a true industry hero though.
Following a damning report into the UK's video game talent drain to Canada last month (read it here) one UK MP has had the knowledge and courage to stand-up and be counted.
Jim McGovern the Labour MP for Dundee West, slammed the UK government's handling of tax breaks for the indigenous gaming industry in Westminster Hall yesterday.
He began gently enough, "The UK computer games industry is a substantial contributor to investment in the UK. In Scotland alone, £30.2 million is invested in salaries and overheads, £27.5 million is contributed to the Exchequer, and a direct and indirect contribution of £66.8 million is made to UK GDP. In the UK as a whole, those figures rise to a £1 billion contribution to GDP, and £400 million a year that goes to the Treasury."
Before getting into his stride, "All that, however, is now at risk. Like many major industries, the computer games industry operates in a globalised economy and faces stiff competition from abroad.
"In that environment, just as in many others, global competition is squeezing British industry. Like ship building, general manufacturing and steel production before them, UK creative industries are being tempted away by countries that offer ever more enticing business environments.
"Canada is a particular threat. Last week the Entertainment Software Association of Canada produced a report highlighting the fact that Canada’s computer games industry has significantly benefited by poaching companies from the UK. It estimates that because of tax breaks, the industry will grow by 17% over the next two years. Between 2008 and 2010, the Canadian games industry grew by 33%; over the same period, the UK’s games industry fell by 9%."
As if those stats weren't enough to wake a complacent government, the well-informed politician explained that, "The US state of Pennsylvania announced this week that it is to introduce a 25% tax break for games developers. That makes it the 17th US state to offer such support."
And, "Alongside that, the Irish Culture Minister, Jimmy Deenihan, announced at the start of this month that the Irish Government were looking to implement tax breaks to encourage games developers to move to Ireland."
He is then met with a glib response from Conservative MP for Hove, Mike Weatherley, "Does the hon. Gentleman agree that we need to think not just about the short-term position, but the long term? Given that this is such a transient product, which can go from border to border, we need to think about how the whole market is developing. Therefore, tax breaks are important in our thinking about how we can maximise revenue going into the future, not just in the short term."
Ed Vaizey's deputy John Penrose the Tory MP for Weston-Super-Mare also ploughs in explaining that the reason that film industry has tax breaks is "that it seemed at the time—we continue to agree—that it was an important piece of cultural ambassadorship as much as a business opportunity.
"We cannot necessarily say that for Grand Theft Auto, important though it may be for the UK industry and for jobs. The film industry does both jobs."
Jim McGovern does not take that sitting down.
"The figures given to the Scottish Affairs Committee during its inquiry suggest that the tax breaks received by the film industry cost in the region of £110 million a year.
"The previous Government committed themselves to tax breaks for the computer games industry worth £55 million a year. However, the computer games industry generates more for our GDP than the film industry.
"Further to that, the Committee said that calling them video or computer games was rather misleading, as the industry is also involved in medical research and architectural science. It is not just people playing Grand Theft Auto or APB”.
Applause please for Jim McGovern.
Read the entire - lengthy but brilliant - debate here.
Jim McGovern the Labour MP for Dundee West, slammed the UK government's handling of tax breaks for the indigenous gaming industry in Westminster Hall yesterday.
He began gently enough, "The UK computer games industry is a substantial contributor to investment in the UK. In Scotland alone, £30.2 million is invested in salaries and overheads, £27.5 million is contributed to the Exchequer, and a direct and indirect contribution of £66.8 million is made to UK GDP. In the UK as a whole, those figures rise to a £1 billion contribution to GDP, and £400 million a year that goes to the Treasury."
Before getting into his stride, "All that, however, is now at risk. Like many major industries, the computer games industry operates in a globalised economy and faces stiff competition from abroad.
"In that environment, just as in many others, global competition is squeezing British industry. Like ship building, general manufacturing and steel production before them, UK creative industries are being tempted away by countries that offer ever more enticing business environments.
"Canada is a particular threat. Last week the Entertainment Software Association of Canada produced a report highlighting the fact that Canada’s computer games industry has significantly benefited by poaching companies from the UK. It estimates that because of tax breaks, the industry will grow by 17% over the next two years. Between 2008 and 2010, the Canadian games industry grew by 33%; over the same period, the UK’s games industry fell by 9%."
As if those stats weren't enough to wake a complacent government, the well-informed politician explained that, "The US state of Pennsylvania announced this week that it is to introduce a 25% tax break for games developers. That makes it the 17th US state to offer such support."
And, "Alongside that, the Irish Culture Minister, Jimmy Deenihan, announced at the start of this month that the Irish Government were looking to implement tax breaks to encourage games developers to move to Ireland."
He is then met with a glib response from Conservative MP for Hove, Mike Weatherley, "Does the hon. Gentleman agree that we need to think not just about the short-term position, but the long term? Given that this is such a transient product, which can go from border to border, we need to think about how the whole market is developing. Therefore, tax breaks are important in our thinking about how we can maximise revenue going into the future, not just in the short term."
Ed Vaizey's deputy John Penrose the Tory MP for Weston-Super-Mare also ploughs in explaining that the reason that film industry has tax breaks is "that it seemed at the time—we continue to agree—that it was an important piece of cultural ambassadorship as much as a business opportunity.
"We cannot necessarily say that for Grand Theft Auto, important though it may be for the UK industry and for jobs. The film industry does both jobs."
Jim McGovern does not take that sitting down.
"The figures given to the Scottish Affairs Committee during its inquiry suggest that the tax breaks received by the film industry cost in the region of £110 million a year.
"The previous Government committed themselves to tax breaks for the computer games industry worth £55 million a year. However, the computer games industry generates more for our GDP than the film industry.
"Further to that, the Committee said that calling them video or computer games was rather misleading, as the industry is also involved in medical research and architectural science. It is not just people playing Grand Theft Auto or APB”.
Applause please for Jim McGovern.
Read the entire - lengthy but brilliant - debate here.
Comments
Anon 30 Jun 2011 14:45
1/3
Clap clap! Shame his point will be overlooked. Yet again another example of government 'not getting' the industry. Even in the face huge profits that outweigh the film and music industry they still think of it as a niche product. When all our talent is farmed out to Canada and other countries they'll soon notice the big hole in revenue they are obviously taken for granted. God i am starting to hate this country.
chimpfu 30 Jun 2011 15:24
2/3
@Anon ..... Well said
captainpugwash 4 Jul 2011 16:43
3/3
The game industry should get one of the government adviser cronies like Philip Green 'TopShop' who pays 0% tax to invest in their company, so that they can avail of the über rich tax breaks that are available to über rich government advisers. It is good to see that there is no government corruption and no preferential treatment to the wealthy in privileged positions.