Prime Minister questioned on tax break snub

Prime Minister questioned on tax break snub

By Rob Crossley

July 9th 2010 at 9:06AM

Cameron asked in commons why the initiative was â??poorly targetedâ??

Pressing questions over the Government’s decision to scrap game tax breaks have made their way to the top of the political chain, with the Prime Minister having to answer for his decisions in the House of Commons.

In a Prime Minister’s Questions session, David Cameron was asked yesterday why the coalition government decided that game tax breaks were “poorly targeted” – a quote from the recent Budget – after promising to support the game industry in the run up to the election.

Standing in front of a distant-looking George Osborne, Cameron took the Treasury’s line on the matter:

“We believe that what matters is having low tax rates, and what we did in the Budget – which the House voted on last night – was to cut the small company rate of corporation tax back down to 20p from 22p and set out a path for getting corporation tax down to 24% by the end of this Parliament,” he said.

“That would give us one of the lowest tax rates in the G8, the G20 or anywhere in Europe. That is what we will benefit from, but I note that the Labour party voted against those tax reductions”.

The response mimics what the Treasury told Develop last week, having been asked the same question, though the Prime Minister notably declined to mention videogames, developers, or the game industry in his response.

Such terms came via the question, which was asked by Labour MP Jim McGovern, who represents the Dundee West constituency.

Dundee is the home to a multitude of game studios, including APB developer Realtime Worlds.

McGovern asked: “In the run-up to the general election, the Conservatives claimed to be the party that would support small businesses, yet in their first Budget they cancelled tax breaks for the computer games industry, which is crucial to my constituency.

“Can the Prime Minister tell not only me and the House but the hundreds of people in Dundee who are employed in the computer games industry and the students who study at Abertay university exactly why his Chancellor feels that that tax break was poorly targeted?”

A number of MPs recently signed an Early Day Motion to bring game tax breaks back on the agenda.