MPs 'receptive' to tax breaks for video games developers

A Tory MP says the Treasury has to be convinced about the benefits of granting the videogame industry tax breaks – but believes it is receptive to the idea.

John Whittingdale, chairman of the House of Commons Select Committee on Culture, Media and Sport, says the stature of the gaming industry is growing in the UK.

But he has urged fellow MPs from all parties to act fast in offering greater incentives to British developers, saying the UK is now having to work harder than ever to retain skilled workers.

Many employees in the games industry are being enticed to countries such as Canada which offers tax breaks to developers, he added.

“There is talk about offering similar relief as that seen in the film industry,” he said. “It may not be the right time for the Treasury to be offering tax breaks to any industry at the moment but it is something it does need to consider when it comes to gaming.”

Mr Whittingdale was talking at the launch of a joint venture between Tiga, the trade association representing UK game developers, and NESTA, the National Endowment for Science, Technology and the Arts, which took place at the Houses of Parliament.

It has devised a set of initiatives named Play Together which focuses on fostering innovation, collaboration and communication between UK video game companies and with other creative industries such as music and film.

Mr Whittingdale is the vice-chairman of an All Party Parliamentary Group for the Computer and Video Games Industry and he is aiming to break down perceived misconceptions about gaming.

“Just because someone enjoys blowing the head off a German sniper in a second world war game doesn't mean they will be turned into psychopaths,” he said. “We need to accept that there are games made for adults and games made for children. When you look at a game like Grand Theft Auto IV you also realise that we're very good at making games for adults.”

Britain is currently the fourth biggest games producer in the world having slipped behind Canada due to tax breaks which can amount to up to 37 per cent of a game's production costs.

Richard Wilson, the CEO of Tiga, said: “Games development in the UK contributes £1 billion to the country's gross domestic product. We want it to be the best because when it comes to innovation and creativity, we are extremely good. But there is no level playing field and the cost of recruitment is high. We also need stronger links with universities.”

The Play Together initiative proposes that developers share staff, releasing those who have come to the end of a project to work on games for rival companies.

Tiga says this will save money for the industry and lower the cost of recruiting with workers remaining under contract with their company but enabling other firms which may be in the midst of a project to benefit from their skills.

As well as working on closer ties with universities, Tiga also wants to see the games industry collaborate more closely with the music, film and television industries with staff from each industry crossing over to make full use of their talent.

Steve Walmersley, managing director of Newcastle-based games producer Mere Mortals, has worked with Hollywood, most notably on films by acclaimed Bury-born director Danny Boyle.

“We produced the graphics you see on the screens in the call centre in Slumdog Millionaire,” he said. “What you find when you mix industries like this is that you get people in who think in a different way and it helps to foster a more creative process.”