Monday, 23 January 2012

START-UP VIDEO GAMES DEVELOPER-PUBLISHERS HELD BACK BY LACK OF FINANCE

Former Financial Secretary to the Treasury is calling for the Government to look again at Games Tax Relief

TIGA, the trade association representing the UK games industry, revealed today that while 216 new games companies entered the UK games industry between 2008 and 2011, there were also 197 closures. Limited access to private and public finance is contributing to the high studio mortality figures. The findings are based on a survey conducted by Games Investor Consulting in 2011 of 75 per cent of the UK’s games businesses and published by TIGA in a forthcoming report, Making Games in the UK Today: A Census of the UK Developer and Digital Publishing Sector.

Stephen Timms MP, former Financial Secretary to Treasury, commented: “This timely report is a further indication that in Government we were right to recognise the growth potential of the video games industry and propose a targeted tax relief to help the sector to grow and create hundreds of highly skilled jobs in the UK. I urge the Coalition Government to review Games Tax Relief for the forthcoming Budget.”

Key findings from TIGA’s Report include:
• 216 new games companies entered the UK games industry between 2008 and 2011, but there were also 197 closures.
• The UK’s share of global investment (venture capital and private equity) in the games industry declined from 10 per cent in the mid-2000s to 3.5 per cent.
• 93 per cent of TIGA members said that a new Games Tax Relief would result in more private investment in the UK games industry.
• 63 per cent of TIGA members said that they would seek private investment in new games following the introduction of a new Games Tax Relief.

Dr Richard Wilson, TIGA CEO, said: “Despite an almost record number of start-up studios, the industry’s potential is being held back by limited access to both private and public finance. UK developers are missing out on investment from global publishers and from global venture capital. This is partly because the UK, unlike many of our key competitors, lacks a tax break for games production, which effectively reduces the cost of games development. Access to debt, bonds and equity finance is difficult because of the high levels of uncertainty about consumer demand and the intangible nature of IP in the games sector. In contrast to the film industry which benefits both from a tax credit and from lottery funding, there is negligible public financial support available for video games development.

“Poor access to finance has contributed to a high incidence of business closures in the games sector. The Coalition Government should consider the introduction of a carefully targeted tax break for games production. This would improve the availability of finance for the sector and enable the sector to compete on a level playing field with our overseas competitors. TIGA will bring forward a revised, well-targeted tax break for games production in time for the March 2012 Budget.”

Oli Christie, CEO at Neon Play, said: “UK game developers and digital publishers have the skills, the creativity and the ability to generate new IP. However, our industry is being held back by difficulty accessing finance. A well-targeted tax break for games production would help our industry overcome this challenge and enable us to contribute to the UK’s economic recovery.”

Jason Kingsley, TIGA Chairman and CEO and Creative Director at Rebellion, said: “The fact that many studios struggle to raise finance beyond the prototype phase is particularly worrying and is contributing to the high studio mortality rate. A carefully targeted Games Tax Relief would enhance the availability of finance for studios, improve the UK’s attractiveness to global investors and allow studios to grow and retain experienced development staff.”

Saturday, 21 January 2012

UK VIDEO GAMES SECTOR AFFLICTED BY BRAIN DRAIN OF SKILLED STAFF

Derby has a strong heritage of creativity and innovation and was the birthplace of Lara Croft. But Derby’s games industry is not what it once was and the industry is under pressure right across the country. TIGA, the trade association representing the UK games industry, released fresh evidence this week about a brain drain of skilled development staff to overseas jurisdictions. With 41 per cent of the jobs lost by the games development sector between 2009 and 2011 relocating overseas, urgent Government action is needed to arrest this decline in the British games industry.

TIGA has revealed that:

• The UK games industry workforce shrunk by over 10 per cent between 2008 and 2011.
• 41 per cent of the jobs lost between 2009 and 2011 relocated overseas. The majority of these jobs went to Canada, with the next largest territory being the USA.
• Many games businesses reported that the losses were particularly damaging due to the seniority of the positions and the difficulty in replacing like-for-like when competing with packages of salary, seniority and other incentives offered by Canadian companies.
• Former staff of a single major studio (Bizarre Creations) closed by its global publisher owner (Activision) in 2011 indicate that up to 35 per cent of them left the UK, mostly to Canada, and that disproportionately senior staff went overseas versus those that stayed in the UK.The loss of jobs in British games studios has seen the Exchequer receive nearly £100m less direct and indirect tax revenues, while the sector’s contribution to UK GDP has fallen by nearly a quarter of a billion since 2008.
• The findings are based on a survey conducted by Games Investor Consulting of 75 per cent of the UK’s games businesses and published by TIGA in a forthcoming report, Making Games in the UK Today: A Census of the UK Developer and Digital Publishing Sector (January 2012).

Game developers in countries including Canada, France, Singapore and the USA receive tax breaks for games production. Studios in receipt of public support in Canada are receiving support equivalent to 23 per cent of their turnover, giving them a significant competitive advantage. No tax break for games production exists in the UK. Consequently, the UK is missing out on investment and employment in the video games sector.

TIGA advocates the introduction of a well-targeted tax relief for games development, similar to the existing film tax relief. This would effectively reduce the cost of games development in the UK, attract inward investment, stimulate growth in the sector and halt the brain drain.

Dr Richard Wilson, TIGA CEO, said: “The UK video games development and digital publishing sector provides high levels of graduate employment, has a high propensity to export, is at the cutting edge of R&D, and has a world class reputation for IP generation. The video games industry is exactly the kind of sector that the Government should be supporting to help rebalance the UK economy.

“Yet our industry is suffering from a serious brain drain. Our competitors in Canada and elsewhere are able to recruit highly skilled developers from the UK largely because they benefit from tax breaks, which effectively reduce the cost of games development. Tax breaks both stimulate job creation in the games sector and provide games businesses with significant financial resources with which they can deploy to recruit staff.”

TIGA recommends that the Government introduce a carefully targeted tax break for games production to enable the UK games sector to compete on a level playing field and to prevent the brain drain. TIGA conducted a snap survey of 27 of its members about the potential impact of a new Games Tax relief.Of those surveyed, 93 per cent said a tax relief in the UK would slow or halt the brain drain abroad while none felt it would cause the situation to worsen.
Dr Richard Wilson added:

“Without a tax relief, the UK runs the risk of losing its leadership position in video games development and becoming a finishing school for the Canadian games industry: with UK universities educating developers and UK studios then honing their skills before they leave for employment in the Canadian games sector. This is bad for the UK video games sector, bad for the Government and bad for the UK taxpayer. We need a targeted tax relief to halt the brain drain.”

Jason Kingsley, TIGA Chairman and CEO and Creative Director at Rebellion, said: “The UK has a highly skilled development workforce but the brain drain of talented staff overseas is jeopardising this competitive advantage. The evidence from overseas is that the provision of tax relief enables studios to attract and retain high quality staff and to increase employment.

“A carefully targeted Games Tax Relief would enable UK studios to grow and retain experienced development staff, halt the brain drain and stimulate growth in the games development sector. TIGA will bring forward a revised, well-targeted tax break for games production in time for the March 2012 Budget.”

ANDREW LANSLEY, HAS LOST TOUCH WITH REALITY

On Thursday the Royal College of Nursing (RCN) moved to oppose the Health and Social Care Bill, arguing that serious concerns have not been addressed during the parliamentary process, listening exercise or political engagement.

The health secretary, Andrew Lansley's response illustrated that he has lost touch with reality. His reaction to the RCN’s move was to say: "They want to have a go at the government … about pay and pensions. The public know we have to do this. It's a purely political operation." (sic).


The RCN, which had not previously opposed the bill as a whole, has taken this decision at this point arguing that the proposals will not deliver on the principles originally set out, and that recent announcements such as the rise in the cap on private patients being treated in NHS hospitals to almost half (49%) make the bill in its entirety a serious threat to the NHS.

Dr Peter Carter, Chief Executive & General Secretary said: “Opposing this bill is not a decision we have taken lightly – we have worked hard on behalf of all our members to influence the decisions that have been taken as the bill has gone through parliament. However, it is now clear that these ‘reforms’ are forging ahead on the ground – without the concerns of nurses and other clinicians being heeded. We have sought a range of assurances, but now feel that the reforms as they stand could have the opposite effect from that which was intended. These root and branch reforms are pressing ahead in tandem with the “Nicholson challenge”, which requires the NHS to save £20 billion in England alone by 2014.

“The RCN has been on record as saying that withdrawing the bill would create confusion and turmoil, however, on the ground, we believe that the turmoil of proceeding with these reforms is now greater than the turmoil of stopping them. The sheer scale of member concerns, which have been building over recent weeks, has led us to conclude that the consequences of the bill may be entirely different from the principles which were originally set out.

“The RCN feels that these concerns are so fundamental that we must now oppose the Health and Social Care Bill. Our Frontline First campaign has shown that cuts are being made, 48,000 in England alone at the last count, and patient care is undoubtedly being put in jeopardy. With this in mind, the RCN proposed an amendment to the bill which would guarantee safe staffing levels, but the government chose not to take this proposal forward. Without these checks and balances, and a commitment to regulate the Healthcare Assistants who are so crucial to the delivery of care, these reforms could damage the very system they were designed to improve.

“Most recently, the announcement that the cap for private income would be 49% has left nurses with real fears that the needs of the market could come ahead of the needs of patients. While we are not opposed to the principle of competition in the NHS, recent developments have shown that the balance between competition and quality has become skewed.”

The RCN has set out a number of areas of concern since July 2010. It believes that concerns remain across all these areas which have led to the change in the RCN position.

• Competition, as opposed to competition and collaboration
• Nurse involvement
• Health inequalities
• National pay, terms and conditions
• Staffing levels
• Private income cap
• Public health
• Workforce planning
• Any qualified provider

Dr Peter Carter added: “While we will continue to raise the concerns of our members around all aspects of this bill, our overall view is that the bill as a whole risks damaging the NHS which our members work hard to build and to support. In combination with the financial pressures all Trusts are facing, and with the rising public health challenge of the coming years, we fear the NHS is now facing a very bleak future.”

Friday, 20 January 2012

BADGER KILLING TRIAL IS RIGGED - AND USELESS

The Tory-Lib Dem Coalition Government says its culling trials will be science-led, but it has rigged the pilots from the start. It has chosen two areas “as the most suitable to pilot controlled shooting of badgers”. The next sentence claims the trial will be “part of a science-led policy” to control bovine tuberculosis (bTB).

The Badger Trust says any trial that takes place in a “carefully selected area” only, cannot possibly be science-led and would be useless if the methods were applied to other areas.

No exact whereabouts are given in the official announcement, nor in the Minister’s accompanying statement. Consequently it is difficult for the public, both lay and scientific, to verify any assertions about effectiveness. Furthermore, no indications have yet been provided of how the pilot trials will be adequately and independently monitored to ensure they are effective and humane. There are no details of any plausible means of measuring the effects of shooting over six weeks in areas of at least eight miles by eight (150 sq km).

The announcement refers to the 25,000 cattle slaughtered because of bTB in 2010, but fails to give the context – the total number of cattle slaughtered prematurely. This is has been estimated as at least ten times as many as for bTB, 300,000 from mastitis, lameness, and infertility among the many other reasons for premature slaughter.

The document, is riddled with half-truths, such as a statement by Mr Jim Paice, the Tory farming Minister that: “No country in the world where wildlife carries TB has eradicated the disease in cattle without tackling it in wildlife too”. Firstly, Britain brought it down to 628 in 1979 – without killing badgers. Secondly, there is a world of difference between badgers in the UK and wildlife (unspecified) in other countries (unnamed) and the methods used are not revealed. Crucially, there is a known risk unique to badgers – that stirring up a population increases the risk of bTB transmission (perturbation). No other country has controlled bTB without draconian cattle restrictions and testing regimes.

Another half-truth, in the notes to the statement, was that the Randomised Badger Culling Trial (RBCT) of 1998-2007 showed that badger control done correctly over time reduces the incidence of bovine TB in high incidence areas. It also said (but the Minister did not): “After careful consideration of all the RBCT and other data presented in this report, including an economic assessment, we conclude that badger culling cannot meaningfully contribute to the future control of cattle TB in Britain”.

Yet another was a reference in the statement to the 16 per cent benefit over nine years, which tends to support rather than contradict the RBCT’s conclusion. The figure was in a report of a meeting between Defra’s Chief Scientist and scientific experts in April, but not published until four months later.

The Badger Trust and its legal advisers are studying this and any other statements that may be forthcoming before deciding whether or not to start legal proceedings.

Wednesday, 18 January 2012

ED MILIBAND TAKES ON RIP-OFF BRITAIN

Labour leader, Ed Miliband has identified at least six areas for immediate attention in his bid to tackle rip-off Britain, including:

* Savings fees: Pension firms should set out how much they are charging savers to invest their money. Research presented to the Treasury suggests up to 16 fees and levies can be applied toprivate pension schemes. If charges do not fall, Mr Miliband proposes capping total charges for pensions.

*Car-parking charges: Railway companies have dramatically increased the cost of parking at stations, with South Eastern recently hiking costs by 16 percent at 50 stations. The cost of parking should be capped – along with season tickets and other fares.

*Airline levies: Travellers face a wide array of charges from low-cost airlines for baggage, paying with a credit card and even checking in without printing out a boarding pass. These fees would have to be disclosed upfront with the cost of actual travel to avoid consumers being misled when they come to pay for a fare.

* Bank charges: Mr Miliband says his biggest concern is the £2 billion which banks make from unauthorised overdraft fees. He backs plans to give a new consumer watchdog the power to intervene and outlaw excessive fees in the finance sector.

*Consumer helplines: The Labour leader draws attention to the unacceptable practice of people being charged “50p a minute just to complain”.

*Energy companies: Labour have already outlined plans to break up the country’s energy firms and believes transparent pricing to enable proper competition is essential.

Monday, 16 January 2012

GOVERNMENT’S MISTAKES WILL LIMIT FUTURE ACTION BUT LABOUR WILL STAND FOR PEOPLE AND STAND UP TO VESTED INTERESTS

By Ed Balls MP

Times are tough right now. Jobs are being lost, bills are going up and tax credits are being unfairly cut.

If Labour was in government now we’d be making different choices.
We wouldn’t be cutting spending and raising taxes as far and as fast as David Cameron and George Osborne.

Because their reckless plan has done exactly what we warned – choked off the recovery and put more people out of work which means £158 billion more borrowing than planned.

We would tax bankers’ bonuses and use the money to get 100,000 young people into work.

And we’d have a temporary VAT cut to help people struggling with rising prices and help kick-start the economy.

But even with Labour’s five point plan for jobs, there would still need to be some cuts and tax rises to get the deficit down.

And the reality is that this Tory led government’s failure on the economy means tough times are set to continue. Incomes will continue to be squeezed for both public and private sectors workers.

But in tough times the priority has got to be getting people into jobs rather than people in work being paid more. That is why Labour cannot oppose the decision to cap public sector pay rises at an average of 1 per cent. But it should be done fairly – tougher on those at the top to help protect those at the bottom.

And I’m afraid that three years before the next election Ed Miliband and I cannot make any promises now to reverse spending cuts or tax rises. After five years of the Tories we don’t know how bad the economy will be.

We cannot duck the reality – this government’s mistakes mean tough choices for the next Labour government. Cameron and Osborne are getting it badly wrong. They should change course and put jobs first.

Sunday, 15 January 2012

DAVID CAMERON CHALLENGED OVER HIS VIEW ON HUNTING ACT

The League Against Cruel Sports is questioning David Cameron’s commitment to repealing the Hunting Act following his comments on the issue on this evening’s BBC Countryfile. The Prime Minister used his interview to repeat his pledge to bring forward a vote on repeal of the Hunting Act.

However, the League is challenging Mr Cameron’s commitment to this given his reluctance to act on it since coming into power in May 2010. The PM told Countryfile ‘I think there should be a free vote in the House of Commons, I think that the House of Commons should make up its mind about this.”

League chief executive Joe Duckworth said ”David Cameron is the one man who can make a vote on repeal happen yet he doesn’t appear to want to put his money where his mouth is. He is happy to state he wants a free vote yet very reluctant to make it happen and one has to question why this is. The obvious answer is because Mr Cameron knows repealing this legislation would be a deeply unpopular move and flies in the face of public opinion. It also goes against the will of the Parliament where there is currently a majority in favour of keeping the Hunting Act in place.

In the interview to be aired on Sunday evening the Prime Minister also voiced concerns at the forthcoming badger culls. He said these would be fraught with difficulties.

Commenting on the badger cull Mr Duckworth added: “There is absolutely no dispute that action is needed to tackle bovine TB but the proposed culls do not offer a solution and could in fact make matter worse. Culling is not the answer and it’s not too late to reverse the decision and implement a solution which does not involve the needless slaughter of badgers and will actually improve the situation across the country.”