Game on: how we can lure lucrative industry
Britain's decision to ditch tax relief for the video-gaming sector could be our gain, says Willie O'Dea
IT was a curious week for Fine Gael. If it wasn't flip-flopping over how many jobs it couldn't create with its NewEra plan: it was trying to convince its own members that it wasn't engaged in cute-hoor politics.
While this may be deeply interesting to those within the FG camp, it won't excite or stimulate people who are looking to see where we can source possible new jobs and opportunities.
Perhaps it was this focus on their own internal concerns that caused the opposition parties to miss an interesting recent development in the UK which could be of benefit to us here in Ireland.
In his emergency budget a few weeks back, the British Chancellor, George Osborne, decided to abandon the computer games tax relief which had been promised by his Labour predecessor.
The plan had been to extend the 20 per cent tax break enjoyed by the film industry to the video games development sector, and had the support of the Lib Dems and the Conservative party at the time.
Not anymore.
The news was greeted with horror by the British entertainment software industry. It was not expecting it and warned of an exodus of creative talent, particularly to Canada.
The video and computer games sector is a billion pound industry in the UK alone. You only need to take a look around any shopping area to see how many games stores there are, not to mention the huge online games business.
It employs about 30,000 people, mainly graduates, in the UK and contributes over £400m in taxes every year. The amazing decision by a Tory Chancellor to scrap the promised tax reliefs on the development of gaming software is in stark contrast to the trend elsewhere.
Computer games companies in Canada can get tax relief of 30 to 40 per cent on costs, including wages, while France recently introduced a 20 per cent tax relief scheme for the industry. The Canadians are seeing how they can lure even more of the industry from the UK following Britiain's decision.
So should we. And we should start now.
Moving to Ireland would be a more attractive proposition for many of the developers currently based in the UK. Not only are we closer and share a common language and similar legal system, we also offer access to the lucrative EU market.
And this is a market that is set to grow again after a few poor years. A report by PricewaterhouseCoopers predicts that revenues from the entertainment market will grow by 20 per cent over the next few years.
Ireland, with its track record in IT and skilled graduate base, is an ideal location for this sector. Indeed, I would go further and suggest that Limerick and the Mid-West region is the right location for an expanded entertainment software industry -- much in the same way that Dundee in Scotland has become a base for video game development. We have the people, the skills and the infrastructure.
We should look at using the next Budget to offer tax reliefs that approach those offered by Canada. Not only is this a sector that offers good employment to our graduates, it is a huge export industry.
While attracting the sector to Ireland is a big idea in itself, there is an even bigger idea in this development too. This time it was the scrapping of plans to introduce a new tax relief, but it looks as if the Con-Dem government plans to target other reliefs.
We need to start thinking about other areas where the UK government might be making similar cuts -- and start targeting those. There is already speculation in the UK that their film industry tax relief might be next under the spotlight.
We in Ireland are well along the road of correcting our deficit, while the UK is now only embarking on that path. Their loss could be our gain.
Willie O'Dea is a Fianna Fail TD for Limerick East. www.willieodea.ie
Originally published in
