MSP Michael Russell Interview

With all the recent news of tax breaks, government incentives and economic crisis left right and centre, it seems other countries are looking at taking our creative industries to help bolster their economy.  How would they do this?  Well, simply by offering tax breaks and other financial incentives to game developers.

Ireland is the latest country to suggest it may introduce a five-year "tax holiday" to try to attract Scottish developers to move, but what can the Scottish parliament do to counter this?  We've spoken to Michael Russell, Minister for Culture, External Affairs and Constitution, who talks to us about what the Scottish government has to do next.

Why hasn't the Scottish government been lobbying the UK government to secure the future of an extremely successful and beneficial industry?

Games are a vital part of our creative industries - we have made strong progress recently in implementing Scotland's Creative Industries Partnership  but full fiscal powers are needed to bring home the real competitive advantage we want for Scotland's gaming sector. Until we have those powers, we continue to make the UK Government aware of the implications for the Scottish gaming industry and to work with the industry in every way we can.

The UK Government is looking at the challenges faced by the games industry, including competition from other countries offering financial incentives not available in the UK. We are, of course, actively contributing to that exercise, ensuring that the UK Government hears loud and clear the Scottish perspective and the detrimental effects on the industry here. I have written to Lord Mandelson highlighting the strength of the industry in Scotland.

Can't the Scottish Parliament authorise a tax break independently?

Without fiscal autonomy, the Scottish Parliament does not have the power to alter the tax system - currently that can only be done in Westminster. Of course, my view is that we should have full control of those fiscal levers so that we can respond to the needs of our industry, to ensure we make the most of our competitive advantage.

If you had autonomy, what would you propose?

Independence would give me and my colleagues in government the full range of powers open to respond directly and specifically to the needs of the industry in Scotland. It would allow us to act in the best interests of our industry. And, of course, it would give much wider scope to allow us to continue to build on our successes.

What does the Scottish parliament need to do now?

The Parliament needs to keep the pressure up on the UK Government to act now, before it is too late and to continue to support efforts in Scotland to develop our industry effectively. It specifically debated the issue in March. Scotland continues to punch above our weight in taking advantage of new opportunities and we need to continue to do so. In government, we are ensuring we have the right policy landscape to enable the sector to flourish. With Scotland's Creative Industries Partnership we have brought together the key public sector agencies to ensure the sector gets effective, coordinated support.

What does the Scottish parliament need the UK Government to do now?

Act now in partnership with the industry. The industry is telling us what is needs - this Government is listening and we continue to press the UK government for full fiscal powers to better support the industry in Scotland.

Scottish developers are renowned world-wide, and with countries like Canada offering tax breaks we are losing more of the talent pool within the UK. Isn't Ireland, only a few miles across some water, more of a threat?

Scotland's computer games industry is indeed world renowned - we are currently ranked third in Europe's top ten locations for games development. Our studios are recognised internationally producing bestselling, award winning games - like Crackdown and the Grand Theft Auto series. The industry contributes a turnover of over £90 million a year to our economy and employs over 1,000 people. We are rightly proud of our successes and are committed to supporting and developing the industry in Scotland.

Games are an important part of the creative industries - a key sector in our economic strategy - and we want to build on our strengths. I am pleased that many companies that are based here are choosing to stay here, despite the financial incentives that might be on offer elsewhere. We are committed to supporting them and creating the infrastructure to enable to them to thrive. Companies based here benefit from start-up funding, our dynamic business culture, our focus on innovation and access to high quality research. Thanks to our investment in the industry and the work going on at in our universities, including at the University of Abertay, we also have a talented, highly trained workforce in numbers that aren't available elsewhere. We have a particular centre of excellence in Dundee and you just need to look at the facilities on offer - for example at Seabraes Yards - to understand why companies choose Scotland. Growth in the sector continues to outstrip that of more traditional industries. But we are not complacent. We need to ensure that we can compete with other countries where tax credits have supported the growth of their industry and avoid any "brain drain" westwards.

How would the poaching of Scottish videogame developers impact the Scottish industry?

Talent is critical to the games industry in Scotland so any loss of talent is of great concern. The attraction and retention of talent is therefore critical to the future success of the industry and clearly, we want to attract and keep talented developers here in Scotland. We have a critical mass of designers which ensures a vibrant industry, attracting others here. Maintaining that edge will ensure the industry continues to flourish. There is a lot on offer to those developers, including the excellent support our enterprise agencies give including dedicated support, funding and awards and innovative approaches such as the Digital Media IP Fund backed with £3 million from Creative Scotland's Innovation Fund and Scottish Enterprise which will maximise the creative, cultural and commercial opportunities presented by new and emerging technologies. Our support of initiatives like Dare to Be Digital - the international video games competition that brings students from across the world to Scotland to design their own video games - develops and showcases talent and opportunities.

Videogames are now becoming integrated into school and higher educations syllabuses. If we're training the talent, why is it hard to keep them?

High quality education, skills and research are central elements of our success. Companies here have access to a highly qualified work force. The University of Abertay, which offered the world's first MSc in computer games technology, has become the UK's first centre of excellence for computer games education. We made a £3 million GBP investment to develop additional courses and purpose built accommodation. We know that companies out there need these students and there are real jobs on offer to our students. While people decide on where to live and work for variety of reasons, I believe that Scotland can easily compete with the rest of the world.