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Tax Breaks Revisited

With all the interest in the financial strife of high street retails GAME, many of us failed to give the budget the due care and attention that it warranted. On the afternoon George Osborne stood in from of his fellow MPs and delivered his latest financial update, I sat at my desk not particularly paying attention to something about pasties. Soon, a ripple went round the office; the chancellor had announced quite unexpectedly that the games industry would be receiving tax breaks.

This was quite a turn up for the books as after their election the Conservatives had labelled the Labour proposal for similar breaks as “poorly targeted” and thrown them out. Then many thought that in this economic downturn that that was that, and the industry would have to survive the attentions of far more attractive foreign propositions until the country had righted itself financially.

It seems the turning point was when a handful of large and notable names in the computing, animation and entertainment space made it clear to the Government that this was not good enough. Hints were dropped that studios would up sticks and head overseas, taking advantage of favourable tax benefits in France and Canada. Furthermore, foreign studios indicated that they conversely would be attracted to our shores if the right deal was in place. Some may say that Minister’s hands were forced, though whether threats would ever have turned to promises is one thing, but in this stand-off the Government blinked first.

However, in my mind this should not be considered a U-turn or a step down. From what I have heard of the original Labour plans they proved far too limiting, and with the rethink many more creative businesses can be brought under its umbrella. For as much as we like to lambast our officials for getting decisions wrong I feel we should also praise them for showing patience and some consideration on the matter.

The actual meat of the proposals are some way off, however. The announcement this year was to indicate the start of a consultation period during which the Government will talk to the industry. Minister for Culture, Communications and Creative Industries Ed Vaizey says that during this time studios will have to “put a realistic case to Government and have to show how the tax credit can work in practical ways.”

Signs point to something similar to the tax break system already in operation for the British film industry, whereby productions that tick enough “British” boxes qualify. “The games industry needs to look at that and say ‘how can we take that model and apply it to our industry?’ […] as it has prior approval from the treasury.”

Quite whether cultural tests should play a large part in qualification to the scheme is still up for debate in some quarters, but even if it does go through it doesn’t mean we’ll have a spate of Fables on our hands. The film tax breaks allow for British staff, premises and influence to all count towards the final decision, not just the theme of the production itself.

When it comes to the actual numbers involved, I prefer to shy away. The thoughts of creating X jobs or saving Y companies from going abroad is all conjecture and generally spun to suit the speaker. What is solid however are the totals of £50m available to the scheme over the first two-years. How this is divvied out at this point is anyone’s guess. Instead, the most important point is that we’ve started down the road to determining how.

Some say it’s been a long time coming. TIGA and alike have saluted the detail but, as Vaizey himself said, the devil’s in the detail. Let’s wait for 2013.

What a banker

There is one thing guaranteed now: I am not voting Labour in the next election. During all my years of voting I have never stuck to one party or one candidate, always making my mark for the party that at the time appeals and promises to do the things that matter to me. Brown’s activity in the financial district, however, has ruled out any chance of me wanting another term of his misdirected leadership.

The recent hand-outs to the various banks that are struggling has really riled me. It seems that in this age of capitalism, that sector is immune from the prospect of going under and isoffered blank cheques at the first sign of trouble. Not only did they profit from our money during the good times but they are now looking to use our money to bail them out.

Our money is going on propping up failing institutions. If this happened on a smaller scale, say a business you or I had set up, if we had failed then we would have paid for it. Yet in the city, if they fail then we also pay for it.

Quite frankly with an insurance and guarantee scheme that already exists for accounts Joe Public’s money that he invested in Braford and Bingley, Northern Rock and Lloyds TSB is protected. I wish I could feel so safe about the multiple billions of pounds our government has just shored them up with.