Lib Dems hedge bets on games tax breaks

The Liberal Democrats are "sympathetic" to the call for games tax relief, but will not "categorically back it" over concerns the "industry itself is not totally united behind it".

That's the message from Don Foster MP, Culture secretary for the party, whose comments came in the wake of a hint from the government that the measure could appear in next week's budget.

Speaking in an exclusive interview with GamesIndustry.biz this week, Foster said: "I'm delighted Stephen Timms, the Minister with responsibility, has recently said the case is coming together. The problem I think we've got is that the case has not been finally put to bed.

"There are still disagreements in some parts of the games industry about whether this is a good idea or not. There are some concerns, for instance, about the impact of the cultural component – which is necessary to get around European state aid rules - and whether that might have an impact in terms of international sales."

Timms, Minister for Digital Britain, told GamesIndustry.biz last week: "What has been lacking in my mind up until now is some really strong factual evidence [for tax relief]. I think we are now starting to see that coming together." The Chancellor's budget, due March 24, he explained would be "the point we'll be able to provide an update of where we've got to."

The Liberal Democrats last month published 'The Power of Creativity', a policy document outlining the party's strategy to support creative industries. This carried an explicit commitment to "maintaining the existing tax relief for British film", and noted the film industry had "grown from strength to strength" since its introduction.

But Foster, MP for Bath, said his party was not yet prepared to make a similar pledge on games tax relief. "I'm much more pro the arguments in favour of the tax break," he said. "We've said very clearly that at the moment we don't think that the case has yet been finally made and we are concerned the industry itself is not totally united behind it. Until that is the case it's obviously very hard to come out and say we'll categorically back it.

"But I'm very sympathetic to it, many of my colleagues are sympathetic to it. It won't be in our manifesto, if that's the question you're asking, because I don't think we've quite got there."

Financial support for small videogames developers, however, would be a manifesto pledge, he confirmed. "We are providing within our budget proposals and within our manifesto additional sums of money to provide support to small businesses working in the creative industries including the computer games industry," he said.

Asked whether the party would back the government if it included the measure in the Budget, Foster added: "If somehow the government have been able to put the case together to their satisfaction, personally I'll be delighted and will be doing everything I can to make sure nobody in my party proposes stripping it out again".

Foster argued that fixing the economy as a priority would be in the best interests of all creative industries in the UK. "The one thing above all that will help the videogames industry - and you can talk about tax breaks, talk about skills, education, and getting the classification system right - but the one thing above all is getting the economy of this country right.

"And we can do more to help the games industry by the proposals [Treasury spokesman] Vince Cable is making about the economy put into effect than anything else."

Meanwhile, Foster criticised his colleague Norman Lamb, the Liberal Democrat's health spokesman, for comments made last month in a Sunday Express article, which launched a “campaign” - linking playing videogames with a rise in childhood obesity – that called for VAT raised on the sale of games in the UK to be used to “to develop more sports facilities for children".

Foster rubbished this suggestion, backed by Lamb, noting: "Let's just remind ourselves that the computer games industry puts £1bn pounds into the exchequer – and a lot of that money already does goes towards health, education, the fight against crime and the other things the government does.

"Quite clearly [Lamb] needs to be reminded that if we're to give even more support to the games industry we get more tax coming in to the exchequer and that would enable him to achieve just what he wants. So there is a way of doing it, but the best way is to support the videogames industry."

A petition in support of the campaign, set-up by the Sunday Express on the government's website, had drawn just eight signatures at the time of writing.

Foster, alongside Labour's Tom Watson and the Tory's Ed Vaizey, is part of a small but increasingly vocal, cross-party group of MPs championing the cultural contribution made by the videogames industry.

"We're beginning to recognise the huge contribution to intellectual development and of course physical development – the Nintendo Wii with Wii Fit, for example, has led to a huge transformation of people's attitudes to what they see as computer games," he said.

All three MPs are due to take part in an ELSPA-sponsored Videogames Question Time event at BAFTA on March 29.