It is particularly good that this is taking place against the backdrop of London Games Festival.  I am participating in, as I am sure many of you are, a number of games related events this week.  But pleased to be starting with ELSPA, as I think two of the first people through my door very early on were Paul [Jackson – Director General of ELSPA] and Michael [Rawlinson – Managing Director of ELSPA] so I am delighted to be able to do so.

So what it demonstrates is how important the games sector is to me, and to the Government.  But I am not going to quote a lot of statistics to tell you how wonderful your industry is and how much government values it.  I hope that the things I have said publicly and in the past, what Shaun Woodward said, you don’t need anymore convincing.

I have been fortunate enough to work on video games policy both while I was at the DTI (now BERR) and again here as Minister for the Creative Industries.
And so while we in this room understand the positive attributes of the games industry and how much it has to offer, we also know that there are some real issues you confront and the challenges you face.  Both social and economic.

And underlying both of these areas is the stark fact that the video games industry is quite a complex industry:

• Just think about the demographic you serve, you cross demographic lines – I was interested in this fact that gamers have an average age of 28/29 means this is increasingly becoming a cradle to grave activity
• you fit awkwardly into regulatory boxes – European regulation tends to carve things into software or audio-visual: video games constitute both of these things; and
• you can’t be summed up in a sound bite, that’s probably a good thing – to explain what the industry does and achieves which requires much, much understanding of the issues.  

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I want to talk about two things today. The second relates to the Byron review, looking at the content of and regulation of video games for children. But I will start with the more controversial of the two – the economic context in which you continue to grow and prosper. 

The video games industry has grown in significance both in terms of popular culture and economically.  This is demonstrated by the size of the industry, both in the UK and the role the UK Games sector holds worldwide.

It is the worldwide competition that brings me to your current challenge – globalisation of the industry.  From my perspective, the one word that I hear the most from the industry is “Canada”, but as you all know the issues are bigger than one country as while Canada may be the current challenge to the UK industry, it could just as easily move to somewhere else in the next couple of months.

And actually the bigger picture about the costs of doing business in the UK weighed against the significant benefits of locating here, because of the talent and other issues such as London being a ‘creative hub’ is one that we need to constantly reflect on.

Games have been a great success story in this country.  We were there at the start and our businesses grew.  But in an increasingly global market, we do need to see what we can to stay ahead. 

The difficulty we in government have is that while the problem seems to be easily summed up – it is more difficult to find the solution that works.  And I want to spend some time outlining the complexities within which a solution needs to be found.

Firstly does the UK government care about the video games industry? – Yes, absolutely certainly we do.

Is the UK therefore willing to offer tax incentives to the extent that the Canadian Government does? Now even if we had the money and the issue is questioning priorities in a tight fiscal environment, could we do it?.

Whilst being a member of the EU gives great opportunities to industry.  It also means there are certain restrictions on State Aid, and I know many of you are aware of these.  As I understand it, these restrictions rule out the type of support being given by Canada.

You will be aware of the lead taken recently by the French Government to introduce a tax relief system for video games.  They plan to use a cultural test to support video games that are culturally French.  This is currently being considered by the European Commission, although I understand, ELSPA, as a member of ISFE signed up to a rejection of this approach. 

Even if we supported such an approach – it would be restricted to games that can pass that rigid cultural test.  And this will put your industry in a box which some of you don’t seem to want to be in.  However other parts of the industry do want this and that is a contradiction which we in Government are having to wrestle with.

One of the current forms of support available to the video games industry is R&D tax credits. And again I know that there are criticisms of the way the tax credits impact on the industry.  But we want to work further with you to make sure that these systems are being used as effectively as possible.  Is it about the process being simplified or is it about changing what you qualify for, we are up for a conversation about that and want to take it further.

What we want to achieve is making the UK a better environment for making games so that large and small companies alike expand their operations.  So let us hear from you what the constraints are and let us tackle and work together on these.

In that vein of thought there is more to industry support than tax relief.  The way the creative industries are supported is an area you know we have been looking at under the Creative Economy Programme for a couple of years.  Before the end of this year, we will publish the Creative Economy Green Paper which will be our response to The Work Foundation’s report, Staying Ahead. 

This green paper which wont be the end of the story, this is an iterative process which will set out our direction of travel on some of the issues I’ve already mentioned. But it is not the end of the story.  The Green Paper will also look at other issues which are vital to your success – how we support innovation, how we do better on skills, education and training to ensure we maintain our nation’s advantage in talent, how we can better do to police IP rights in the new media environment whether this is with extra support to emerging business models as we see more and more convergence.

I can’t today say this is it, I don’t think you want a cast iron assurance on the nature of government support for the games industry in the future. I can’t tell you because with such a dynamic industry it wouldn’t be possible to do so. What I can do is tell you that we want to continue working with you to see how best to support you.

The dynamism and the global growth of this industry demonstrates the increasing impact it is having on society.  Which brings me to my second message – the Byron Review. 

I know that Tanya Byron spoke to you earlier today.  I am sure that she answered all your questions about the review and how she will be working.  I want to talk about our motivations for asking her to do it.

Two weeks ago, I was in a school in my own constituency in Barking, along with Dr Byron and Ed Balls (Secretary of State for Children, Schools and Families) talking to parents and children about video games and the internet.  What we were doing was launching the call for evidence for the Byron Review and I was struck by the enthusiasm with which the children spoke about games and what was interesting in that context was the fear that some parents felt about them.

This sums up for me some of the challenges you face.  The arguments have become polarised to such an extent that while some commentators blame the industry for all societies’ ills, others do recognise the huge opportunities they hold to support education and development.

We have all seen media coverage that caricatures the industry to an absolutely ridiculous extent – this is not helpful – but we must equally acknowledge that the fear that some in society have for their children is real.

There is no doubt that video games can be a very positive part of children’s development.  They can educate and entertain in equal measure.  But there are also games that are not suitable for children and we – and by that we I mean, a tripartite of Government, industry and parents – who must all accept a shared responsibility for ensuring that children do access the benefits whilst being able to manage the risks.

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You will have heard earlier from Tanya about what her review will cover:

An assessment of the evidence on risks to children
of exposure to potentially harmful or inappropriate material; and then the effectiveness of existing measures to help prevent children have accessing such material and critically, to help parents understand and manage the risks of access.  The review will make recommendations for improvements for additional action where it is necessary.

I know some of you think this has been inspired by a negative view of video games within government. And I just want to reassure you that this is not the case.  We have a duty to protect children from inappropriate material and we will do that unashamedly. 

But we see this review as an opportunity to wrestle the debate away from tabloid journalism and provide an independent space for a proper open review of the issues.

And it may involve us looking at the difficult questions – both with the review team and amongst yourselves. 

The media landscape is changing fast and two of the newest and most interactive sectors are the internet and video games.  So we wanted someone to review these as opposed to other media such as film and television so that we could help parents understand these new platforms to empower them to ensure their children get the best out of them.

I know that Paul [Jackson – Director General of ELSPA] and Philip Snape [employed by ELSPA to look after their PR / Government Relations, works for PSA Communications] have met Tanya Byron already and have been really supportive of her review.  I want to thank you for doing this and urge others to respond to the call for evidence.    I, and James Purnell have complete confidence in the way Dr Byron is conducting the review – she is addressing the issues in a balanced and sensible way while not being afraid to ask difficult questions and I hope this is how you felt after you heard her speak this morning.  This is your opportunity to get your messages across and we are greatly looking forward to receiving the final report in next March.

There are no easy answers to either of the two questions I posed.  As I said at the beginning, the video games industry doesn’t fit into an easy regulatory box and as we move forward these challenges will only grow and of course they will change. 

It is my job to champion you and make sure that the UK is best placed to address those challenges.  And to make everyone else recognise the need to do so and keep the Games Industry at the heart of our economy.