Vaizey: Games must make tax case again

By Johnny Minkley Published 14 July, 2010

Watch Tory MP's address to Develop inside.

Culture Minister Ed Vaizey this morning told the UK games industry it would "need to make the case again" if it wanted tax breaks for development.

But the Tory MP, delivering the keynote address at the Develop Conference, insisted the sector wouldn't "fall over" without them, and announced Government-backed initiatives he said would help aid small developers and tackle the skills crisis.

In his first speech to the games industry since joining Government - and since Chancellor George Osborne scrapped Labour's plans for tax relief in his Budget - Vaizey insisted he remained "a committed champion of this industry" and would do "all I can to ensure you remain in an environment where you can compete".

On the heated issue of tax breaks, Vaizey said: "I can't emphasise enough that I'm not the Chancellor - but the Treasury is always open to rational argument and debate." Vaizey had, prior to the election, come out strongly in support of tax breaks alongside coalition partner, LibDem MP Don Foster - but Osborne had never publicly offered support.

Ed Vaizey's address to the Develop Conference.

On the issue of whether the industry should continue to pursue the issue, Vaizey said: "To put it bluntly, you haven't made the case because the Chancellor didn't accept it. You need to make the case again. But don't think just because we don't have tax break the industry is going to fall over - that's so wide of the mark."

Despite the setback on tax breaks, Vaizey defended the Budget as good for business overall. "I don't feel downhearted or defeated; I'm incredibly optimistic," he said, adding that he supported Osborne's "vision" for a low-tax regime that would help UK businesses.

Elsewhere, Vaizey revealed a £2m fund in association with Scotland's Abertay University, to help start-ups to develop new IP. And he also announced an independent review into the skills sector, "to see what school leavers and graduates need", fronted by Eidos life president Ian Livingstone and Revolution's Charles Cecil.

Vaizey also addressed the issue of the new PEGI age ratings, currently in limbo and waiting for statutory approval. He acknowledged there were still "a number of processes and parliamentary hurdles" to navigate, but insisted: "It's better to spend time to make sure these are right than have a system that doesn't work when comes into force."

In conclusion, he added: "I would counsel against a council of despair - I personally think this industry has a fantastic future. Is my door open to talk to you, to work with you? Absolutely."

Asked, finally, which games he played, Vaizey quipped: "Super Mario Wii - that's all I'm capable of."

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About Johnny Minkley

Eurogamer TV's Johnny Minkley is a veteran journalist with a lifelong passion for games and the games industry. He uses Twitter more than most people use air.

Read more articles from Johnny by visiting the Johnny Minkley archive page.

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Comments (20) Latest comment 2 years ago

Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!

  • MrChuckles #1 2 years ago

    I was impressed he was at Develop tbh, and reasonably impressed with his responses.. Until the last one... Doh..

  • X3Entente #2 2 years ago

    i wanted him to say manhunt 2

  • Doctor_What #3 2 years ago

    I bet he plays Dream Ponyz.

  • darleysam #4 2 years ago

    It shouldn't matter what games he's played. He could stick to solitaire for all I care, as long as he's someone that gets the relevance of the games industry to the UK.

  • mcwildcard #5 2 years ago

    I don't get their thinking behind dropping the idea of a tax break, the maths for it are incredibly basic, because it's so obvious.

    Games Company X earns £10mil per year, of which say 20% (for example) is taken for tax = £2mil for the taxman
    Games Company X earns £10mil per year, of which say 10% (due to tax breaks) is taken for tax = £1mil for the taxman
    Games Company X takes it's business elsewhere, where tax is more attractive = £0 for the taxman

    It's just so incredibly short-sighted, they're driving away a growth industry, how can that possibly be positive?

  • Concrete #6 2 years ago

    I find it amusing that they turn up to Develop and try to talk about addressing the industries skills shortage . . when one of Develop's major sponsors is the scam site "train 2 game".

  • Pac-man-ate-my-wife #7 2 years ago

    Some of the cultural and economic arguments are made in the Guardian Podcast - it's from about 2 mins in: http://ww w.guardian.co.uk/technology/pda...

  • canoot #8 2 years ago

    Fucking tory wanker,nobody will be able to afford games in a years time because due to their policies every fucker will be on the dole.

  • SAMagic #9 2 years ago

    mcwildcard - I don't understand it either. If the article I read was correct, the UK was now slipped from 3rd to 5th in world ranking for games.

  • actionfitz #10 2 years ago

    "Vaizey: Games must make tax case again"...

    after the next election when the cabinet isn't made up of Millionaire Thatcherites (that includes the so called liberals).

  • TomSwift #11 2 years ago

    @canoot
    Eloquently put. I loved the way you said the Tories would make it so everyone was on the dole, it made it pretty obvious you don't know anything about politics.

    You'll still get positives, of course, because nobody likes the Tories.

  • Sniper_007 #12 2 years ago

    As much as I hate the fact that the gaming industry and once again been overlooked, there is one aspect here that is worth considering.

    And that is that - companies only pay tax if they make profits... so if the gaming industry is making huge profits on the back of the work they've done then surely they can afford to pay the tax over? It is the same argument I have with my Managing Director who constantly complains about the amount of tax he has to pay... so i just tell him, if wants to reduce his tax liability just reduce his own salary and pay it to me instead... I'll gladly pay that tax on his behalf!!

  • tachometer #13 2 years ago

    If he can guarantee a sub £180 PS3 by Christmas he's got my vote!

  • Collymilad #14 2 years ago

    "Fucking tory wanker,nobody will be able to afford games in a years time because due to their policies every fucker will be on the dole."

    Yeah because no-one was scamming the system under those labour fuckwits eh?

    The stuff the tories have to do now is down to labour being a bunch of incompetent morons, the apologists should remember that. Anyone who voted labour post 1997 should have been shot for treason.
    Edited by 1 at 14/07/10 @ 19:42

  • comissars_handgun #15 2 years ago

    fuck the tories

  • Jazzy_Geoff #16 2 years ago

    "companies only pay tax if they make profits... so if the gaming industry is making huge profits on the back of the work they've done then surely they can afford to pay the tax over? "

    it doesn't work like that for lots of reasons

    the simplest is that other countries (most notoriously - Canada) DO offer tax breaks and therefore developers will make greater net profits in those countries than in the UK. Even if they have to ship all the workforce out from here.

  • Jazzy_Geoff #17 2 years ago

    and re: the tories

    the point that was so eloquently made was not that more people will be skiving on the dole but that more people will lose their jobs under a policy of swinging public sector cuts. This will happen whether or not you buy the economic arguments and despite the fact that the numbers of unemployed went down today.

  • Ninja_Tino #18 2 years ago

    Only capable of New Super Marion Bros Wii? That game is tough as nails on single-player. This is one modest gamer.

  • SpaceMonkey77 #19 2 years ago

    @Concrete

    Funny you mention Train2Game, as I almost fell for their spiel not so long ago. I wanted to do a game design course with them, but something about it bugged me. Done a little digging online and wasn't happy with what I found. I'd really actually like Eurogamer to do an article on theseT2G lot, because they are very shady.

    As for these fools at Develop, while I commend one of the government stooges actually attending, I think they are insane and not taking the games industry and what U.K talent brings into the country seriously. To have to make the tax case again is ridiculous, for an industry that makes more than the film industry. However, I hope the U.K industry redoubles their effort to state their case better. If these politicians try to make some bs clause about non violent games only getting the tax break, I shall have to hire both Golgo 13 and Agent 47 to take them out.

  • Murton #20 2 years ago

    Two glaring factual errors in the article.

    1: and since Chancellor George Osborne scrapped Labour's plans for tax relief in his Budget

    Labour didn't have any plans for tax relief for Osbourne to scrap. Alistair Darling merely said that he had received a case for them and was to review it this year, they were not part of his budget in April and did not feature in the Labour Manifesto pre-election. Labour also didn't put a value or timetable to the cuts, so to call it a "plan" is being overly generous as well as naive.

    2: but Osborne had never publicly offered support.

    Not true. He voiced support on Budget day when Alistair Darling said that he was looking into at and drew attention to fact that the matter was omitted from the Conservative Manifesto during the Election campaign saying that it was a matter for review once he saw the finance books. You can take the decision in his budget to not grant those tax breaks as a result of that review and Labour's scorched earth policy in the run up to Election.


    With that out of the way. Was impressed with his appearance at the event let alone his performance. There's a lot of crying over spilt milk within the industry on this matter and a lot of people (journalists and the public) don't seem to understand the reality of the financial situation that Labour has put this country in. Regardless of who won the election we all knew that public spending cuts were inevitable, and a Government cutting spending cannot possibly defend a tax cut to a luxury industry like games development.

    As Vaizey said, this isn't the end of the story for tax breaks, another case can be put forward and we may see those breaks in a future budget when a little more of Labour's damage to our economy has been repaired, but right now it's financially stupid and politically suicidal to grant tax relief to the games industry and I think the majority of people can understand that.
    Edited by 1 at 15/07/10 @ 18:49