The U.K. Government can only afford to back sure fire winners, and it's not sure the videogame industry qualifies.
MPs clashed yesterday over the proposal for tax breaks for the gaming industry that the current Coalition government struck down when the came to power. Speaking on the BBC Politics Show at the MCM Expo in London, UK, Liberal Democrat MP and spokesperson for London, Thomas Brake, said that the proposal was unworkable, as the opposition hadn't properly shown where it would find the £192 million it would take to fund it.
Gareth Thomas, Labour MP and Shadow Secretary for University and Science, said that the government was putting jobs in danger by scrapping the credit, and added that there was a real question mark over whether the gaming industry could maintain its current level of employment. But Brake pointed to the recent troubles at APB creator, Realtime Worlds - which he mistakenly credited with the creation of Grand Theft Auto - and said that the government was not in a good position to pick winners, and an investment in business infrastructure in general would be a better idea. He also accused the opposition of making promises that it couldn't possibly fulfil by claiming it would offer tax breaks but at the same time reduce public spending.
This isn't the first time that UK politicians have used Realtime Worlds as an example in the tax credit discussion, although when Labour MP Ed Balls did it in August, it was as an example of a company that might have been saved had it had more support from the government. It seems a little disingenuous to use RTW in this argument however, as its problems weren't the result of a lack of support, nor is it a good example of the general state of the videogame industry in the UK.
But RTW aside, the U.K. government is faced with an enormous level of debt at the moment, and it has to get as much return from the money it does spend as possible. I wouldn't be particularly surprised if the Coalition would actually like to support the UK videogame industry, but has to snipe at the proposal so not to lose face. Indeed the plan had the backing of the Conservative party - one of the parties that makes up the Coalition government - when Labour announced it in March. Regardless, the lack of tax credits is bad news for the industry, which faces strong competition from countries like Canada, which is more friendly to the industry, and actively trying to recruit development staff from overseas.
Source: via CVG