Train2Game students will be aware that the government announced games tax relief in the March budget, but what does it actually mean? At Gadget Show Live, Train2Game News sat down with TIGA CEO Dr. Richard Wilson who explained in-depth what games tax relief is, the campaign behind it, how it’ll help UK game developers, including Train2Game students, and more.
In part one of our extensive three part interview, Dr. Wilson tells Train2Game News how he felt when games tax relief was announced, what persuaded the government to introduce it, and how it’s positive for the games industry as a whole. As usual, leave your comments here, or on the Train2Game forum.
Games Tax Relief was finally announced in The Budget, how did you feel when the announcement was made? Did you know it was actually going to be coming?
Well, bearing in mind we were the only trade association to consistently campaign for a tax relief for games production for four years, and we’d already won games tax relief before back in 2010. In 2010 to put it in context, we convinced the last Labour government to give us the tax break. Then we had a general election, all four key political parties backed the tax break during the campaign, but then in June 2010 the coalition government decided to drop the measure.
In the two years since 2010 we’ve been building up the case, gaining stronger evidence, tackling any deficiencies in the argument to make the case as compelling as possible. When we finally got the tax break in the March budget this year, as you can imagine, we were ecstatic, absolutely thrilled to pieces because it was the culmination of four years hard work.
I sensed that since the end of last year and from January this year there was a change in tone from government, the Treasury was much more interested in the arguments we were putting forward. They were particularly interested in all the evidence we’d accumulated about the ‘brain drain’ of talented staff to overseas jurisdictions, I think that evidence was very, very important. They also found our evidence about a lack of working capital, a lack of investment in the games industry, being really, really, important.
So, to answer your question of if I knew it was coming, I sensed things were improving, I’ve always believed we’d get the tax break, I wasn’t necessarily convinced we’d get in this Budget, but I always knew we’d get it and I’m obviously thrilled to pieces that we have.
When games tax relief was taken away in 2010, George Osborne said it was “poorly targeted,” what do you think changed his mind?
I think it’s a combination of three reasons. One is that the economy isn’t performing as well as we’d like it to perform, and it’s an important reason because the government has clearly been looking for pro-growth measures. Our games tax relief is a really positive proposal which won’t only help the UK games industry grow, but will also support the wider economic recovery.
Because we’ve shown over the last few years that the video game development industry is export focused with 95% of all game developers export at least some of their games. It provides high skilled employment with a typical studio having 80% of their staff trained to degree level, the vocational equivalent or above, and clearly it’s a very R&D and technology based sector. That’s helped to convince the government that they should support our particular industry.
So, the economic background and the fact we needed pro-growth measures was one reason why we won the argument. I think the second reason was because we never gave up, that’s the truth of the matter. Over the last few years a number of organizations – and indeed politicians as well – have said we should just drop games tax relief. People in the games industry, people in the trade press have said forget about it, you’re never going to get it. One leading industry commentator said a year ago it was flogging a dead horse.
Well, we knew that they were wrong, these are the kinds of people that always give up and don’t achieve things, whereas at TIGA we set ourselves a very clear goal that we were going to get games tax relief and we weren’t going to give up until we got it. The fact we stuck with our campaign and continued to prove the case was the second key reason why we managed to make the games tax relief proposal stick.
And the third reason is that the government was able to encompass the tax relief for games production in a wider measure to help the creative industries. So, the tax break that they’re talking about won’t help just the video games industry, but also animation and high end TV drama.
The creative industries are one of the strong, growing sectors of the UK economy, it’s excellent the government has recognized that, it’s brilliant we’ve been able to get cross-party support on this, and we shouldn’t forget that we have all four key political parties backing games tax relief which is really terrific. I think those three reasons add up and explain we got games tax relief this time round, rather than last year. That’s why there’s been a change.
So, politicians supporting games tax relief by taking petitions to No.10 has been positive for the campaign and positive for showcasing games positively in general as well?
Yes, I think it’s really important that we were able to present the games industry as being economically important and economically significant. Because I think up until three or four years ago, when we had mainstream media coverage about the video game industry, it was normally about a violent game, or a game in some way we were told we should all disapprove of, and we’ve changed the tones of the debate, we’ve changed the way the games industry is talked about.
It’s now seen economically important, contributing to the economic recovery, and also it’s being seen as culturally significant. And it’s great that we’ve got a cross-party group in parliament which TIGA helped to instigate in 2009, and then we helped instigate it again in 2010 after the general election.
So, we have a cross-party group in Westminster backing the sector, and we’re really pleased that the Scottish Parliament has also set up a cross-party group. Joe Fitzpatrick, Scottish National Party MSP for Dundee City West played a crucial role there, he managed to bring create an all-party group for the video games industry in Scotland.
I was really pleased with the first meeting we had in March that we had the Sustainable Growth Minster there, so really great commitment from the Scottish Government on the video games industry. So that alone demonstrates how the sector is seen as so much more important, so much more significant than four or five years ago.
Part two of the Train2Game news interview with TIGA CEO Dr. Richard Wilson is here. For more information about TIGA and their involvement with Train2Game, see the official website. And for the latest TIGA news, keep reading The Train2Game Blog.