Osborne undeterred by Europe scrutiny of UK games tax breaks

UK Chancellor George Osborne and Culture minister Ed Vaizey said that an EC investigation will not stop games tax breaks.

The pair were speaking at a special British Film Commission event for the launch of creative sector tax breaks for TV and animation.

While TV and animation legislation is being implemented in the UK, the introduction of the games tax break was dealt a set-back two weeks ago when the European Commission said it would investigate whether developers in the UK really need one.

There is no obvious market failure in this dynamic and growing sector,” said the EC at the time.

But Osborne brushed aside any concerns, calling the games element of the new subsidies package as simply an unfinished story” that will go on to grow the overall creative sector’s 36bn value and vast 1.5m employment base.

Vaizey said the EC investigation was nothing unusual”.

It’s what happened with the French tax relief. We are still committed to it – we are writing it into the finance bill now. And we will work as fast as we can with the EU commission [to secure approval],” he added.

Tax breaks form an important part of the current UK government’s overall economic policy.

While implementing a deep austerity strategy, the coalition is pursuing international investment as an answer to domestic debt problems, hence the allure in fighting to win back TV productions, animation deals and game studio jobs.

It has also lobbied tech and web firms, as well as other international industries, to consider expanding to the UK.

A lot of people want to make film, TV and video games in the UK because of the tax breaks,” said Vaizey.

Osborne also stressed that boosting the creative sectors in this way helps grow a talent base that makes the UK doubly attractive to entertainment firms who may have moved away from British productions.

Ultimately a tax change isn’t going to make all the difference in the world – what makes a difference is that we have a skilled talent pool here,” he added.

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