Cameron: “Difficult Decision,” but UK Tax Breaks had to be Nixed

October 28, 2010 -

During a recent "Prime Minister’s Questions" session,  Labour MP Luciana Berger took the opportunity to question Prime Minister David Cameron (pictured) about the UK government’s decision to not institute tax relief measures for local developers.

Berger, who represents Liverpool Wavertree, stated, according to Develop, “Before the election all three parties pledged to introduce a videogames tax relief to compete internationally on a level playing-field,” before she asked the PM, “Why has the government reneged on that promise?"

Cameron began answering by stating that the government had to make “difficult decisions.”

He continued:

So we have got to take difficult decisions and I think that tax break relief, which was not particularly successful or targeted, had to go. Those are the difficult decisions we have to take.

Dr. Richard Wilson head of industry group TIGA, a Games Tax Relief champion, responded by saying:

David Cameron’s negative response to Luciana Berger’s question is peculiar. The PM claimed that Games Tax Relief was ‘...not particular successful or targeted...’ Yet both the Conservative Party and the Liberal Democrats promised that they would introduce this tax break before the election.

Wilson added, “Unless the Coalition Government urgently reappraises its decision to cancel Games Tax Relief then the UK video games industry will suffer and it will not be able to deliver the jobs, exports and investment so desperately needed to rebalance our economy.”

Dundee West MSP Joe FitzPatrick expressed that he was “disappointed but not entirely surprised,” in regards to a lack of movement towards tax relief.


Comments

Re: Cameron: “Difficult Decision,” but UK Tax Breaks ...

Can they stop blaming Canada for their own inaction now?

Re: Cameron: “Difficult Decision,” but UK Tax Breaks ...

Scrap child benefit and cut housing benefit, use this money to fund the tax breaks for games developers. Simples.

Re: Cameron: “Difficult Decision,” but UK Tax Breaks ...

Might I suggest that they would have been more successful had they actually been put in place?

My answer to DC would be that, as an island which depends on imports, we should try and export something and since we can't undercut most countries on price, we should be aiming to promote skilled industries.

If you want proof that tax breaks work, then take a look at Eidos Montreal; a British publisher who opened a studio in Canada due to tax incentives. And now, because Eidos is owned by Square Enix, some of the revenue is going back to Japan. If we had tax breaks, the jobs and money might have stayed here.

The problem is, I doubt there are many conservative MPs who would want to say that GTA does more good than harm!

Re: Cameron: “Difficult Decision,” but UK Tax Breaks ...

Don't forget that Labour have Keith Vaz, who has spouted a lot of moral panic-inspired rubbish in the media about violent games, while the Tories have Ed Vaizey who is certainly on the industry's side and was trying to get the tax breaks put in before the PM and Osborne killed off the idea.

I suppose Cameron can argue that the deficit took over as his absolute priority when he came to power as, apparently, it was far worse than he imagined. However, I still don't understand it - essentially giving (or investing or however you see it) money in the form of tax breaks which then generates more money in the long term and secures jobs ISN'T deemed feasible.

Re: Cameron: “Difficult Decision,” but UK Tax Breaks ...

Absolutely, the lack of public funds is the primary reason for this decision. However, tax breaks aren't technically an investment of public money, they are a reduction in revenue. The industry isn't asking for investment per se, they are asking for lower costs (it's more expensive than most other countries to develop here)

Lost jobs and exports reduce public revenue as well. Industry growth creates more public revenue via income tax and VAT that consumers and employees pay.

I still maintain that the decision is political rather than fiscal, i.e. the government cannot be seen to be supporting something when they have bigger priorities and public funds are extremely tight.

Re: Cameron: “Difficult Decision,” but UK Tax Breaks ...

I've just heard that this tax break would cost in the region of £180m. The government did not want to appear to favour one industry over another especially as many would be receiving cuts.

 
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Matthew WilsonAgain the consequences were not only foreseeable, but very likely. anyone who understood supply demand curvs knew that was going to happen. SF has been a econ/trade hub for the last hundred years.04/17/2014 - 2:45pm
Andrew EisenMixedPixelante - Would you like to expand on that?04/17/2014 - 2:43pm
MaskedPixelanteWell, I am officially done with Night Dive Studios. Unless they can bring something worthwhile back, I'm never buying another game from them.04/17/2014 - 2:29pm
PHX Corphttp://www.msnbc.com/ronan-farrow/watch/video-games-continue-to-break-the-mold-229561923638 Ronan Farrow Daily on Video games breaking the mold04/17/2014 - 2:13pm
NeenekoAh yes, because by building something nice they were just asking for people to come push them out. Consequences are protested all the time when other people are implementing them.04/17/2014 - 2:06pm
Matthew Wilsonok than they should not protest when the consequences of that choice occur.04/17/2014 - 1:06pm
NeenekoIf people want tall buildings, plenty of other cities with them. Part of freedom and markets is communities deciding what they do and do not want built in their collective space.04/17/2014 - 12:55pm
Sora-ChanI realize that they have ways getting around it, but one reason might be due to earthquakes.04/17/2014 - 4:42am
Matthew WilsonSF is a tech/ economic/ trade center it should be mostly tail building. this whole problem is because of the lack of tail buildings. How would having tail apartment buildings destroy SF? having tail buildings has not runed other cities around the US/world04/16/2014 - 10:51pm
Matthew WilsonAgain the issue is you can not build upwards anywhere in SF at the moment, and no you would not. You would bring prices to where they should have been before the market distortion. those prices are not economic or socially healthy.04/16/2014 - 10:46pm
ZippyDSMleeYou still wind up pushing people out of the non high rise aeras but tis least damage you can do all things considered.04/16/2014 - 10:26pm
ZippyDSMleeANd by mindlessly building upward you make it like every place else hurting property prices,ect,ect. You'll have to slowly segment the region into aeras where you will never build upward then alow some aeras to build upward.04/16/2014 - 10:25pm
Matthew WilsonSF have to build upwards they have natural growth limits. they can not grow outwards. ps growing outwards is terable just look at Orlando or Austin for that.04/16/2014 - 4:15pm
ZippyDSMleeIf they built upward then it would becoem like every other place making it worthless, if they don't build upward they will price people out making it worthless, what they need to do is a mix of things not just one exstreme or another.04/16/2014 - 4:00pm
Matthew Wilsonyou know the problem in SF was not the free market going wrong right? it was government distortion. by not allowing tall buildings to be build they limited supply. that is not free market.04/16/2014 - 3:48pm
ZippyDSMleeOh gaaa the free market is a lie as its currently leading them to no one living there becuse they can not afford it makign it worthless.04/16/2014 - 3:24pm
Matthew WilsonIf you have not read http://arstechnica.com/gaming/2014/04/introducing-steam-gauge-ars-reveals-steams-most-popular-games/ you should. It is a bit stats heavy, but worth the read.04/16/2014 - 2:04pm
Matthew Wilsonthe issue is when is doesn't work it can screw over millions in new york city's case. more often than not it is better to let the free market run its course without market distortion.04/16/2014 - 9:36am
NeenekoTrue, and overdone stagnation is a problem. It is a tricky balance. It does not help that when it does work, no one notices. Most people here have benifited from rent controls and not even realized it.04/16/2014 - 9:23am
ZippyDSMleehttp://www.afterdawn.com/news/article.cfm/2014/04/15/riaa_files_civil_suit_against_megaupload04/16/2014 - 8:48am
 

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