'Why the games industry needs the Tories'

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Shadow Culture Minister Ed Vaizey discussed his vision for the UK games industry under a Conservative Government today at London Games Conference. Here, MCV prints his speech in full...

Imagine for a moment you are a politician.

You have to make a speech, and you want to highlight a world-beating UK industry.

What characteristics would you look for in the industry you chose?

Well, world-beating is one of them. You would want your UK industry to be up there in the top five in the world.

You'd want it to be an industry of the future, not the past, and one that is likely to grow, so it will probably involve technology.

You'd want it to have a wide footprint, perhaps touching many different areas such as leisure, health, education, defence and so on.

You might like it to be a nationwide industry, with centres from Brighton to Dundee, and many points in between.

You'd like it to be a hard” industry, in the sense that the people who work in it should be highly-skilled, mainly graduates, with an emphasis on specialisms such as maths and computer science.

And you'd be delighted that the industry relies on virtually no support from the state, although you'd want to promise Government support when and where it is needed. After all, you don't want this UK world-beater to be overtaken.

Of course, I'm describing the UK video games industry.

An industry that is a significant contributor to the UK economy, generating more that 2 billion in retail sales in the UK, and contributing 1 billion to the UK economy, with a positive export balance of more that 100 million a year.

An industry that has strong hubs of activity outside London – rebalancing the economy with big concentrations in the Midlands and North West, alongside the South East.

An industry that lies third in the world behind America and Japan.

An industry that sells more than music and film combined.

An industry that employs almost 30,000 people directly and indirectly.

An industry that started in the UK with the first video game invented in 1952 on Cambridge's ESDAC computer. We invented the first football video game, the first with music and of course Grand Theft Auto.

THREATS
But this rosy picture is under threat. Britain will probably lose its temporary third place to Canada and South Korea, and be out of the top five next year, replaced by China.

While the video games industry has boomed globally, growing by 20 per cent in the last two years, we have lost 44 studios representing 15 per cent of the sector. NESTA research indicates that external investment in privately operated UK developers has dropped by 60% since 2008 and that employment is down 4%,

GLOBAL COMPETITION
Global competition is incredibly fierce, and high development costs in the United Kingdom are slowly killing the industry.

Given what is happening, you would expect our Government to be acting urgently.

After all, many others are.

Most famously, Canada has introduced direct financial support to help companies relocate there, almost $400 million in total.

France has a tax credit.

Germany has a development competition.

South Korea has a $200 million fund and a $144 million agency.

Japan has a new centre to promote video games exports, and they were included in its stimulus fund.

Twelve US states have tax credits or some other form of support.

Even New Zealand and Finland are acting.

LACK OF GOVERNMENT SUPPORT
Unfortunately, the UK is falling far behind.

NESTA's research suggests the UK video games sector could shrink by 16.5% over five years, resulting in the loss of more than 180m in external investment and nearly 1700 jobs.As in so many other areas, Labour ministers simply do not seem to care that we are falling behind our competitors in a critically important economic growth area.

Gordon Brown's economic mismanagement means the UK Government simply has not had the fiscal headroom to offer the kind of support that has been available in some other countries. But just because they cannot offer tax breaks, does not excuse them actively doing down the industry

Keith Vaz, the Labour chairman of the Home Affairs Select Committee, loses no opportunity to link video games with the most heinous of crimes.

But at least Vaz's attack is full-frontal.

Much more insidious was a recent photograph, of a kid sitting on his sofa. Listless, bored, fat. And yes, with a video games console on his lap.

The message was clear. Playing video games is bad for your health.

And who sponsored this terrible message? Well, none other than the sponsoring Department of the UK video games industry, the DCMS, as part of the Government's Change 4 Life health campaign.

Unbelievable.

If that represents the low point in this Government's approach to the industry, I am glad that some changes are beginning to happen.

An All Party Group for Video Games has recently been established in Parliament, which should provide a useful platform for the industry to build in depth relationships and understanding at Westminster.

Changing opinion takes time. I hope that the more I and my colleagues voice our support of games, that might help to accelerate change. Since games have entered the living room and family life via the Wii, Guitar Hero, Singstar and so on there does seem to have been a step change in public awareness and perception of video games.

There are many more good news stories getting in to the press. I am particularly fascinated by news reports that video games can have a positive role in education, and can help to treat the symptoms of Parkinson's disease.

For the Parkinson's research, I gather researchers were working with the Wii. The games ‘require visual perception, eye-hand coordination, figure-ground relationships and sequenced movement' all of which make them a great treatment tool for occupational therapy.

It's something I clearly need, as I managed to come last in the Conservative Party Conference Wii Ski jump competition!

But we still need to a coherent strategy of support for the video games industry.

Let me deal with some of the major issues and suggestions that are being considered at the moment.

A VIDEO GAMES COUNCIL?
The video games industry needs a place at the top table.

Some people have suggested a Video Games Council, akin the UK Film Council.

There is no appetite to create new quangos.

And indeed, we are planning to cut back on bureaucracy.

But I think there is a discussion worth having. Namely, to see whether there is any scope to extend the remit of the Film Council to cover video games.

That is certainly something that we will look at actively if we win the next election.

Some of the regional screen agencies already serve the sector.

And the Film Council seems the obvious body to give video games the national voice they need and deserve.

TAX BREAKS
Another hot topic is the campaign for a tax break.

As I have already mentioned, many other countries give direct and indirect fiscal support to their video games industry.

I know this is an issue that the sector has been campaigning hard upon, and I have read much of the research in this area, including TIGA's submission to Government, and Cliona Kirby at Olswang's paper on how a tax break might work.

Let me spell out our approach.

First things first, we need to get the public finances under control by tackling our spiralling deficit.

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