Ed Balls, an MP for the Labour Party, has weighed in on the lack of tax incentives for UK developers in the wake of the troubles faced by Realtime Worlds.
Earlier this week, Scottish developer Realtime Worlds went into administration, putting hundreds of jobs at risk in the city of Dundee. Labour leader candidate Balls believes this situation could been avoided had the new Liberal Democrat/Conservative coalition not scrapped the proposed tax breaks for the industry.
Writing on his blog, he said that the coalition was putting the videogame industry in Scotland at risk, and that Realtime Worlds could just be the beginning unless the government rethought its stance. He said the problems facing RTW were a "stark consequence" of a government that made cuts without thinking about the impact that it might have, and seemed to consider unemployment a fair price to pay. The videogame industry had contributed around a billion pounds to the British economy last year, he added, but there was serious competition from countries like Canada who were trying to entice companies to relocate. He advocated a much more long-term effort to reduce the deficit faced by the UK, where smaller budget cuts went hand in hand with investment in jobs.
I'm not a politician or an economist, but I must admit, this trying to spin the problems at RTW into a failing for the Coalition government seems a little opportunistic on Balls' part. While it's true that the lack of tax incentives do present an obstacle for the UK's videogame industry, to say that it's the reason that RTW is in trouble right now seems rather disingenuous. By all accounts, the reason that RTW is having problems is that it spent a lot of money making a game that no one really bought, and no amount of tax incentives will have prevented that.