Measures need to be tightly drawn to avoid abuse, says Tory MP
John Whittingdale, the Select Committee chairman for the Culture Department, has urged the games industry to continue its fight for game tax breaks despite resistance from the Treasury, believing “a positive outcome” will arrive in the end.
At a Tiga-organised event at Parliament this week, MP Whittingdale told Develop he hoped the industry “will still put policies forward that will convince the government to introduce games tax breaks”.
He, a conservative MP, remained behind the Treasury line on why tax breaks were abandoned.
“There is concern, rightly from the government, that for tax breaks to be initiated they have to be properly focused,” he told Develop.
“We’ve had experience in the past, with the film industry’s tax breaks, that if these measures are not tightly drawn they can be abused. But I don’t think you should accept that tax breaks are off the table.”
Whittingdale, who cited data showing the UK game industry workforce has contracted by nine per cent since 2008, indicated that – in light of this new information – there is still a strong case to make.
“The issue of game tax relief became quite apparent about two years ago,” he said, “and since then it’s becoming clearer that countries like Canada are making a determined pitch to relocate by offering tax incentives.
“As I say, I don’t think tax breaks have been dropped, I just think there is concern to make sure it’s properly focused.”
Whittingdale’s comments were echoed by Labour MP Tom Watson, who told Develop that “the one thing about government policies is that nothing is permanent”.
Watson believes tax breaks will eventually be a reality for the British dev sector.
Whittingdale made it clear, however, that there were other major issues to balance:
“Of course there’s also an overwhelming priority from the government is to deal with the deficit,” he said.
“Any measure which represents a cost, like tax breaks, is very difficult to bring in right now.
“But I think the game industry can still make a case that the key developers in the UK can benefit from tax breaks. And there is still an argument that revenues generated from this will outweigh the cost.
“That’s the challenge. My job is to persuade the Culture Department that this is the right step forwards. I would certainly like to think that in the next five years we can achieve something.”
Whittingdale was made DCMS committee chair back in 2005, and recently led an investigation into the News of the World phone hacking affair.