Hodge: We will "look again" at tax breaks

The possibility of national tax incentives for the UK videogames industry took a small step closer today with the news that the government has agreed to "look again" at the situation in the UK, in light of a recent EU decision paving the way for similar measures in France.

"I know from what I have read, from a whole range of people in the games industry that this is hugely important to many of you, and you quite rightly make the comparison between tax relief on offer to the film industry, and that for games," said the Rt Hon Margaret Hodge MP, speaking at a Westminster Media Forum event today.

The Minister for Culture, Creative Industries and Tourism went on to outline her awareness of the increasingly difficult international picture, skewed by some countries offering significant incentives for developers to settle there.

"Canada is very, very aggressively marketing itself as a destination, not only in terms of the enormous tax relief on salary costs, but also offering holidays at five-star hotels," she said.

"And we now have France, which has succeeded in persuading the European Commission that tax relief is appropriate - although it's capped at a much, much lower level in France."

"But we're nervous about these forms of tax relief for a number of reasons. We're nervous because there's a fiscal impact; we're nervous because we don't want to get into a sort of international Dutch Auction; and we're nervous because we need to think about whether or not in the longer term it provides sustainable growth.

"However, having said all that, we have announced that we've succeeded in persuading our colleagues across government that we should look again at the situation, particularly in light of the French decision."

No timescale was set on any further discussions on the subject, although references were made to the fact that the UK conceded third position to Canada in 2006 in the global industry picture.