Chancellor George Osborne has been urged not to drop plans to introduce tax relief for games developers when he announces his emergency Budget next month.
Dundee firms celebrated when Alistair Darling, the Chancellor’s predecessor at 11 Downing Street, included plans for the tax relief system is his final Budget in March.
Campaigners had said the move would allow home-grown developers to compete on a level playing field with overseas companies and cement the UK’s place at the forefront of the games industry, which is now worth billions annually.
Dundee West MP Jim McGovern, Realtime Worlds studio manager Colin MacDonald and trade organisation TIGA, who all campaigned for tax relief to be introduced in the last Budget, have warned that failure to implement the tax relief would damage one of the most important industries in Dundee.
Although the Conservatives’ coalition partners the Liberal Democrats pledged their support for games tax relief before the election, the Conservatives shied away from making any firm pledges and did not include it in their manifesto.
“It is something we are obviously monitoring very closely,” said Mr MacDonald. “The hope and expectation is that the new government does still see the potential.
“The Liberal Democrats have been very vocal in their support and they can see the potential returns.
“The Conservatives haven’t been quite as supportive but have said they recognise the industry’s importance. Whether they are behind it enough to keep it on the table when going through the cuts they are talking about is another thing.
“The evidence is that this is an investment that will help us out of recession.”
Mr McGovern, who played a key role in convincing Mr Darling to include provision for games tax relief in his last Budget, has written to the new Chancellor about the issue.ProtectHe said, “I have written to George Osborne today to ask him to protect the tax break for the games industry.
“I will be very angry but not surprised if the Tory government is considering scrapping the tax break for the games industry in Dundee.
“The Tories will be making £6 billion worth of cuts in the emergency budget in June. We said throughout the campaign that only Labour would protect people’s jobs and secure the recovery. I will be fighting Tory cuts that affect Dundee at every step.”
Dr Richard Wilson, chief executive of TIGA, said he was optimistic the Conservative-Lib Dem government would press ahead with games tax relief.
He said, “Throughout this campaign we were optimistic because the arguments were on our side and in many respects they should be stronger now as both parties say they want to rebalance the economy away from the financial services.
“We believe that the argument has to be restated but we have no reason to believe they won’t keep it or that they won’t support it.”
“We have to be optimistic that our arguments are robust.”
In his last Budget, Mr Darling announced the computer games sector would be given similar aid to the British film industry, worth around £100 million.
Last year for the first time the games industry outstripped the film industry, generating more than £1.73 billion against £1 billion spent at the box office plus £198 million on DVD and Blu-ray releases.