Tiga caught by its tail?
Wednesday, 24th November 2010 at 1:36 pm
Is the leading industry association wasting its time chasing tax breaks? We ask CEO Richard Wilson
It must be remembered that throughout Tiga’s crusade for game tax breaks, which began in 2008, the association’s membership has doubled.
That’s the easy thing to forget about Tiga; it’s a success with or without its key policy enacted in parliament.
Tiga has clearly been stretching its resources over the last two years, at times working as late as the developers it represents, remaining proactive, tenacious and – ultimately – reaping the rewards.
With the association holding more sway than it’s ever had before, Develop again questioned the policies outlined by its CEO Richard Wilson.
Coalition cuts are now in full flow – half a million public sector jobs are to be axed, RDAs will be abolished, the UK Film Council is to be scrapped, and Exchequer secretary David Gauke doesn’t accept data in Tiga’s tax relief paper. Would you admit this all represents the most testing time Tiga has faced in its campaign for tax breaks?
I think it’s been testing all along. It has never been easy, but I am totally convinced we will eventually get games tax relief.
Governments change their policies all the time. Only this morning I read that Chancellor George Osborne is going to change his stance on bankers’ bonuses. So nothing is lost – this opportunity still remains.
Ministers usually change policy when under a lot of pressure. In this instance, the Treasury has faced questions on tax breaks and is fighting back – surely that’s a bad sign, and surely this is the toughest time for Tiga’s campaign yet?
It’s not a good economic background where jobs are being cut, of course, but the fact remains that the UK government will want policies that promote growth. They’ll want the economy to do well, and the good thing about the games industry is that it can do that.
If we continue to strengthen the evidence, if we continue our campaign, I believe tax relief will come to the UK and put the development industry on a level playing field.
How are you going to approach David Gauke’s criticisms of your report? Is it ignorable rubbish or something you need to address to get things moving?
Well you could argue that, instead of us being ships passing through the night, I think we should have a proper conversation.
I was struck by the fact that when [Labour Dundee West MP] Jim McGovern invited David Gauke for a meeting with myself, he rejected it.
I think that’s poor for a Treasury minister, to not want to engage with the UK’s leading trade association for the UK video game sector, and to respond in that manner to another Member of Parliament.
Is this government proving to be a more difficult hurdle than the previous one?
It’s too early to say. I do think the Treasury should have a meeting with Tiga and it reflects poorly that it hasn’t.
I’m sure, of course, that David Gauke is a reasonable man – I look forward to meeting him and presenting our data to him.
I don’t accept the criticisms he’s made about our tax relief policies, then again it’s quite useful to know why he doesn’t agree with our findings because we can now focus on those.
There’s a rising number of Develop readers that, upon recieving news about tax breaks, ask why the industry should even bother. What would you say to those people?
I would encourage them not to give up. You have to remember that we have, in the past, together changed fiscal policy. The Labour Government was initially opposed to tax relief, before they didn’t.
I would urge Develop’s readers to bear in mind that tax breaks were not getting national coverage at all before our campaign started – in fact the only coverage we got was about how apparently sinister and deadly games can be for children. We’re now getting national television coverage that’s presenting the games industry for what it is; skilled, amazing, creative jobs.
Tax relief is still Scottish National Party policy, there are still Lib Dem and Conservative back-benchers that are sympathetic to the cause.
This is not something that you can turn around in a couple of months, it may take many; even years.
We’ve been at this now for two and a half years, and we have made progress. It took the UK film industry several goes to get their own tax relief, and of course there’s a few people in that industry now that are scared they might lose it.
What if the Coalition did scrap tax breaks even for the film industry? Surely that would be the canary in the mine? Surely you’d give up?
Of course not! I’d never give up. As long as my board wanted me to fight on.
Let’s not forget the key detail in our games tax relief policy – any game that costs over £100,000 to make would qualify for tax relief if it passes the cultural tax test.
I was going to turn to that issue. More and more UK studios are becoming smaller, digitally-focused entities. In other words, more and more won’t have budgets of over £100,000. It seems the trend is that more and more studios are becoming less suited to the tax break policies you mention.
I wouldn’t accept that. Tax breaks are needed as much as ever, a lot of these companies will want to grow and expand their business.
It would be wrong to assume that games tax relief will only help the bigger studios. The smaller ones will benefit too, the independents, the publisher owned, all of them.
Quite simply, game tax breaks, if implemented will have a positive effect on the UK’s competitiveness.
But not for the rising number of developers that are working on budgets less than £100,000.
For that, it’s good that we have a number of other policies that can help them. We have R&D tax credits, for example. And for any small company that wants to grow, we want to be there for them.
Tiga’s had another fantastic year. It’s won an award for trade association of the year, and – I suspect – its fastest membership growth yet?
Yes we’ve grown by over 100 per cent since 2008.
Turning to your publishing initiative, Project Ignite, where you pick indie games as candidates to be published by Jagex. Do you accept that this will aggravate some of your members that are publishers?
This is not an exclusive arrangement with Jagex – if another Tiga member wants to get involved on the publishing side of things, then of course we will help them do that.
But if a Tiga member wants a game published, they can approach you now, whereas before they would have approached, for example, your member Activision. Is that not a conflict of interests? Is this not something that goes against your independence?
It gives people choice. And Tiga makes no money from this, which I feel is still a good sign that we’re independent. I’d be very happy for other Tiga members to come forward with a proposition to become a publishing partner in the scheme.
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