Labour and The Coalition Government clashed over tax relief for British video games studios on live TV earlier today.

Speaking on the BBC Politics Show, Labour Shadow Minister for International Development Gareth Thomas claimed that the Tories and Liberal Democrats were putting jobs at risk unnecessarily by scrapping the scheme.

Liberal Democrat MP Tom Brake cited APB creator RealTime Worlds as an example of the insecure nature of the industry. He suggested that Labour hadn't truly "costed" for games tax relief when in office.

Brake said: "It was going to cost £192 million. The Government [has to be] well placed to pick winners... In the game industry, we've just seen RealTime Worlds in Scotland - responsible for Grand Theft Auto - has gone put of business... We need to make sure the infrastructure is strong [before investing in a sector]."

Brake's advisers could do with a little assistance, it seems: RTW founder Dave Jones was involved in the creation of the original, top-down GTA whilst at DMA Design, but has long since been disconnected from the Rockstar series.

Labour MP Thomas said that there had been a "whole series of British jobs created by the games industry in the UK", but that due to the lack of a tax credit, there was now a "question mark that jobs created can now be maintained".

Brake countered that the tax relief was a "another spending commitment made by Labour that was uncosted" and said that the Opposition's claim to be able to put the tax relief in place but still cut 20 per cent of state spending "doesn't add up, I'm afraid."

Labour pledged that video games studios would be given a subsidy in line with the UK film industry as part of its March Budget - a decision backed by leading Tories.

However, Coalition Chancellor George Osborne ruled out the move as part of his first spending review in June.

Prime Minister David Cameron this week admitted in Parliament that it had been a "difficult decision", but ruled out a U-turn.

Today's Politics Show London was broadcast live from the MCM Expo in London.

At one point, a giant Darth Vader stomped around behind both MPs. They pretended not to notice.

http://www.computerandvideogames.com/ar ... ?id=272892

What a farce...

A better way of supporting the games industry is creating lots of well qualified computer graduates or artists so that any company can get the staff they need.

This would be one way to push one of our only successful industries out of the UK.

I am not in favour of tax subsidies for any industry no matter how important. In the end the subsidy becomes the objective.

As with marine biology, I would bet that there are many, many more graduates in those fields than positions available. Even then qualifactions don't mean too much, I know one person who left uni without qualification and who went on to become lead designer/programmer at Bullfrog, start his own company and then move back to Lionhead. Companies need to have tax breaks to ensure that overall income is greater than the tax break.

Surely if the tax break is zero, this will always be true anyway?

There are many ways that you can help an industry without giving them subsidies. The games industry could get preferential treatment of capital allowances. Because they might have to replace kit every year they could get that treated as normal and so get 100% annual write offs rather than have it accrued over a much longer period. Then there are regional development grants which they could qualify for.

What? World's sixth largest economy? What?

Yes, but what do we actually make?

It would be wrong to equate size with success. The American motor industry for example is massive, yet it's been anything but successful for some time and had to be bailed out by it's government. The City handles more money that pretty much any other market on Earth and makes billions of dollars of 'profit' pretty much out of thin air, yet I doubt anyone would recently describe it in glowingly successful terms.

'Success', at least to my mind, is building a business that has both profit and long term stability i.e. the reasonable expectation of long term future profit. Short term profiteering can appear successful but really isn't.

Equally, an economy (such as the UKs) which was over-specialised i.e. based too much around one industry is always vulnerable to that industry having problems which are then transmitted to the economy at large. It may be prosperous int he short term but I'd argue it's not 'successful'.

Jon

UK development workforce drops 9%

The number of people employed in the UK development sector dropped by nine per cent between July 2008 and September 2010.

That's according to UK developer trade body TIGA, which said that the global industry's software sales grew by 16 per cent during the same time period.

"A key reason for this decline is that video game developers in the UK are at a competitive disadvantage," said TIGA CEO Richard Wilson.

"Many of our key competitors provide tax breaks for video games production. No such tax breaks for games production exist in the UK. Investment and jobs are drifting away to other countries."

Wilson added: "The UK video games industry is a high technology, high skilled, export oriented and environmentally friendly sector that can be world beating with the right Government support.

"TIGA urges the Coalition Government to look again at Games Tax Relief and improve R&D tax credits to help high technology firms including development businesses."

Wilson previously told CVG that the Government 'betrayed' the games industry on tax breaks.

http://www.computerandvideogames.com/ar ... ?id=273801

Problem is if you give a subsidy to one, then all the rest will want the same. You can't give preferential treatment to one branch of the private sector. If it's not profitable enough to stand on it's own then there's something fundamentally wrong that needs to be looked at before taxpayer's money is used to prop it up. After all, what's the difference between tax breaks for companies and tax breaks for individuals?

The thing is that while the companies might leave, not all their staff will, and might actually set up their own games design business rather than be dragged off abroad. I have no problems with new businesses getting tax relief as long as they employ staff, but why should any industry get special treatment. We are supposed to have business friendly regulations in place, regardless of what business you are in.