Wouldn't it be better to actually hold a story like this until the Tories have given you a statement? We are, after all, in the middle of an election campaign and taking the word of a Labour MP about what the Tories might be to up is a bit silly. You might as well ask Nick Griffin what he thinks the Scottish Nationalists will do about the Dundee games industry if they hold the balance of power in a hung parliament.

JonZ, I appreciate what you are saying and the issues you raise were well-considered before I published the story.

Firstly, and most importantly, the Conservatives are silent on the issue. Trust me, I've been calling and emailing them many times over the past few weeks. I phoned Ed Vaizey's mobile earlier, left a message, but again I've got nothing back.

Secondly, behind the scenes there are numerous industry professionals telling me that they fear exactly what Tom is saying. Many are convinced of a u-turn.

Thirdly, the Conservatives have been ambiguous on the detail of game tax breaks over the past twelve months. What's needed more than anything before an election is direct and unequivocal policy, which there isn't. Plan B - the mini-manifesto - has been delayed.

And yes, Mr Watson is in electioneering mode - I made that clear in the story - but he has in the past put the industry before politics. He says that he's doing so again here, but make of that what you will.

Prime example of Watson putting the industry first is his opposition to the digital economy bill.

Finally, my genuine hope is that the Conservatives come out and support tax breaks before an election. In that situation, it genuinely wouldn't be a concern of mine if few people considered my first report as mistaken.

This whole tax-break story gets to be a bigger "nothing" event with each passing day. If it does, or doesn't happen, it will have zero effect on anything the UK games industry does.

People will still want over inflated salaries, and while it continues to cost significantly more to live in this country, as opposed to the USA, then those salaries are going to remain comparitively higher. The higher the salary of the employee, the more you have to charge the publisher to cover those costs, leaving yourself open to being undercut on numerous fronts.

Labour has already helped dig the hole the UK games industry is in, maybe it's their guilt that they are more bothered about, not the Tory policy.

"Labour MP and tax break campaigner Tom Watson believes the most important issue for the industry is not state-supported cuts in production costs, but instead the ‘serious challenge’ of a brain drain in the UK."

Funny how his priorities change depending on the story too. So the brain drain was more important until the election, and now all of a sudden, the money is more important... typical Labour, welcome to the two-faced UK.

I've gotten the impression that the lib dems aren't yet persuaded on tax breaks tbh - I'm pretty sure I read some of their comments along the lines of "well, even the games industry itself isn't united behind the idea yet". And, if we do have a hung parliament, the politicians are going to have much bigger fish to fry than the games industry - I can see tax breaks getting lost in the negotiating process.

I'm betting on another election within a year, and nothing to happen until at least then. Depressing.

@LeeC22: Just to set your facts straight , I'm English and moved to California a few years ago. After having lived in the most expensive place in England (London) for many years, I can tell you that the cost of the living in California is roughly the same as London. If you decided to live in the mid-west, then the cost of living would be cheaper, but the majority of the development jobs are east or west coast, where the cost of living is London-esque.

Just FYI. :-)

@LeeC22: Actually, I think you'll find, average salaries in the UK for games programmers/artists are lower than in the US, sometimes quite a lot less for the same position. When people move to Canada or the US for new jobs, they're doing it because they can make more money with less expenses out there. California is notoriously expensive but the quality of life in Canada right now is well known to be much greater. Tax breaks will allow employers to pay people the salaries that they deserve in order to keep them in this country.

That's one reason why I was quite disappointed to see TIGA's proposals for the tax breaks recently - they all supported the employer over the employees... they didn't seem to be suggesting anything that would stop, for example, a development studio from outsourcing... eg. If a development studio receives tax breaks, what's to stop them from outsourcing most of the work to Canada anyway?

These are questions that I'd like to see levelled at the politicians and at the industry bodies (TIGA et al)... what are they going to do to support the employees?

As a Canadian games industry analyst, I feel that I should point out how our games tax credits work (which, incidentaslly don't exists in every Canadian jurisdiction). They are called "labour-based tax credits", which is to say that the public purse reimburses companies on a portion of the labour spend incurred in the relevant jurisdiction (e.g. Quebec, France, UK, etc.). As such, it is impossible to outsource labour and benefit from the tax credit.

Second, I would argue that the real issue with this type of tax credit is the risk of what is called 'downstream capture'. If I was a (French) games publisher and I knew that a UK developer had access to a tax credit, I may (were I so inclined) include the value of that tax credit as part of the financing of the project in question (thereby funding a smaller part of the project). In this scenario, the French publisher 'captures' the value of the tax credit. Accordingly, one must be very, very careful how one designs credits.