The coalition government is to reveal why it abandoned plans to introduce a tax relief programme that could have transformed Dundee’s video games sector into a world leader.
Dundee is at the heart of Scotland’s games industry and is seen as key to the future of the city’s economy and that of Scotland as a whole.
However, plans to introduce tax breaks for developers were dumped by the coalition government shortly after they took office in May, despite claims the move would create or safeguard 3550 jobs and £457 million in investment.
Campaigners said the tax receipts created by tax breaks would mean the scheme would more than pay for itself.
Exchequer secretary David Gauke told Dundee MPs Stewart Hosie and Jim McGovern and North East Fife MP Sir Menzies Campbell that he will write to them detailing why the coalition government scrapped the scheme, which the previous Labour administration had planned to introduce.
Sir Menzies said, “I arranged a meeting with the minister at the request of constituents in north-east Fife who have connections to Abertay University in order to discuss the issue of the tax regime for the video games industry in Dundee.
“We emphasised the close relationship between the university and the games companies which have been set up in Dundee.”
He added, “The discussion was wide ranging and while the minister made no particular undertaking it is clear that he understands the economic and academic issues at stake. We undertook to continue our exchanges by letter.”
Mr Hosie said the meeting offered hope to the industry that the coalition government does want to help nurture the fledgling industry.
He said Mr Gauke “wasn’t exactly forthcoming in terms of specific assistance the government might provide but there were some useful outcomes.”‘We’re not giving up’Mr Hosie said the government is willing to accept submissions from games firms on research and development tax credits.
He also promised to explain why the coalition chose not to introduce tax breaks.
Mr Hosie said, “He said he will write to us with a breakdown on how the Treasury disagreed with the industry on the benefits of tax breaks.”
Mr McGovern is a member of the Scottish Affairs Select Committee, which has been examining the video games industry.
It is due to release a detailed report on the need for government support for the sector.
He said, “I am particularly happy that a senior MP from one of the coalition parties backs this campaign.
“Though we heard nothing new from David Gauke today, I hope meetings like this will show them we’re not giving up and we’re attracting ever greater support.”‘Stop dithering’He added, “I am eagerly awaiting the publication of the Scottish Affairs Committee report into this subject.
“The government has so far been lacklustre in their support for the games industry.
“The government must stop dithering and start acting.”
Culture minister Ed Vaizey said this week the games sector can play a “key role” in the UK’s economic recovery.
He is planning a visit to Abertay University this year to see its groundbreaking work in teaching and training video games development.
Paul Durrant, the university’s director of business development, also attended Tuesday’s meeting.
On February 1, the independent think-tank National Endowment for Science, Technology and the Arts (NESTA) will publish a major new report on how to transform the UK into a world leader in video games development.
Photo by Flickr user Mykl Roventine.