Parliamentary Business Committee reflects games industry views
The influential Business, Innovation and Skills Committee today published a report on the digital economy, highlighting interventions by Ukie CEO Dr Jo Twist OBE from evidence she gave on behalf of the games industry in March this year.
The Committee recommended that Government must outline what measures it is taking in the immediate future to support policies connected with the digital economy, in the light of the referendum on the UK’s membership of the European Union, and must ensure that the country’s digital economy remains successful and innovative.
Digital Single Market
The Digital Single Market is a big priority for our members, and we have worked closely with officials around the draft Digital Content Directive to ensure that the new EU rules work for the games industry and they understand our business models. We agree with the observation of the BIS Select Committee that the Government “needs to address the issue of whether businesses will be able to access the European Single Digital Market, if they want to do so” as well as discussing “the implications of withdrawal from the European Union, in reference to specific, current EU negotiations relating to the digital economy.”
Measuring the games industry
As we argued in our Blueprint for Growth, the games industry is a sector within the digital economy not properly represented in official data.
The report noted, in reference to a report published on Scotland's industry:
Jo Twist, CEO of Ukie (UK Interactive Entertainment), told us that the games industry “created no jobs and no economic value”, according to official statistics. Yet the gaming industry is the sixth largest consumer market in the world and globally estimated to be worth over £80 billion by next year. According to Jo Twist, as soon as the gaming industry has its own Standard Industrial Classification (SIC) codes that represents the gaming industry as a digital business, “we can shout loud and proud about that message”.
The Committee recommended that:
Good policy making, tax policy and the allocation of resources require high-quality data. This does not exist at present in the digital economy, and policy making cannot therefore be reliably expected to support as much as possible the digital economy, one ofthe UK’s key drivers of improved productivity. The Government’s Digital Strategy should be informed by, and policy measures should be driven by, reliable data. We recognise the difficulty of measuring the digital economy, but the Government should look to the work of the Office of National Statistics, and explore ways of collecting real-time data in the digital economy, and ensure that established Standard Industrial Classification (SIC) codes are agreed and used, in different parts of the digital economy.
There are concerns in the games industry about the implications of the new levy for those businesses. The levy will be payable on annual pay bills of more than £3million, at a rate of 0.5% of an employer’s pay bill. The Government will give each business an allowance of £15,000, and each will have a Digital Apprenticeship Service account, which will fund the costs of apprentices’ training, assessment and certification. The training must meet an approved standard or framework and the individual must meet the apprentice eligibility framework.
The Committee remarked:
Some digital businesses need a small group of highly-skilled people from the start, and we were told that they would be hindered financially by the apprenticeship levy. Jo Twist told the Committee that the creative industry, including the games industry, need “people who can hit the ground running”. While being supportive of the Skills Investment Fund,and the ability to bring new entrants into the industry, Jo Twist told us that her industry does not yet have the capacity or the funding to develop apprenticeships within the industry, but “as an industry, we have estimated we are going to be paying £2 million into that levy pot”.
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