UK Video Games Industry: Contribution of Leamington Spa

(Limited Text - Ministerial Extracts only)

Tuesday 9th March 2021 Westminster Hall

[The Minister for Digital and Culture (Caroline Dinenage)]

It is a great pleasure to serve under your stewardship, Sir Christopher. I thank the hon. Member for Warwick and Leamington (Matt Western) for bringing this debate to the House today, and I am so chuffed to have the opportunity to congratulate Leamington Spa and highlight its incredible contribution to the creation and development of the UK video games sector. That sector is such a key element of our world-leading creative industries.

Only a few weeks ago, I was lucky enough to speak about the importance of Leamington Spa as a games hub. I was very disappointed that, given covid, I was not able to be there in person, and had to do it virtually. I would very much rather have been there in person, but I am delighted that the hon. Gentleman has brought Leamington Spa to me today by bringing it to life in such a vibrant and exciting fashion. He is a great advert for the town, and I very much hope, one day, that I will be able to visit some of his local companies. I was delighted to be able to provide that keynote speech, because Leamington Spa is so vibrant and such an important part of our video games sector. Its very own “Interactive Futures” virtual event showcased the incredible careers and exciting career paths in the video games sector to younger generations and their parents. That is so important: what an exciting, vibrant and interesting career it would be to be in the video games industry!

Leamington Spa—or Silicon Spa, as I think we should now refer to it—and the whole surrounding area has played such a key part in the development and growth of our UK games industry. The games hub has its origins way back in the late 1980s—which, of course, I do not remember at all—with the emergence of Codemasters and then Blitz Games. Their founders, the Darling brothers and the Oliver twins, were pioneers of the British games industry, as the hon. Gentleman highlighted so eloquently. Over the years, we have seen Leamington Spa flourish as a games development cluster, experiencing superb growth and creating major economic value, not only in the west midlands but for the whole of the UK.

The games hub is now home to such a diverse mixture of games companies and smaller start-ups. Of course, Codemasters remains today one of our biggest and most successful games companies, but the area’s world-famous studios also include Playground Games, Ubisoft Leamington, and Sega’s HARDlight studio. Some of our most recognised game titles have been developed there, including internationally acclaimed racing games such as “Forza” and “F1” and—a particular favourite of mine—“Sonic the Hedgehog”. My parents always thought that I was wasting my time with all the years of my youth I spent playing video games, but it was clearly preparing me for life as the Minister responsible for video games, so it all worked out very well.

That blend of experienced games businesses and innovative start-ups has produced an organic system of inter-business mentoring and support, which has enabled the area to flourish so successfully. That mixture of business size and professional experience encourages an impressive rate of intellectual property development, and it is therefore no surprise at all that Leamington Spa has become one of the UK’s largest hubs for indie games studios. Of course, that is why the area is referred to as Silicon Spa, given its incredibly attractive mixture of innovation, artistic design, digital growth and skilled creative professionals.

Leamington Spa, though, is just one example of the UK’s many excellent games hubs. I do not know if you know this, Sir Christopher, but video games hubs have sprung up all across the UK, from Sheffield to Guildford, from Newcastle to Bristol, from Belfast to Cardiff, and from London to Edinburgh and, of course, Dundee—one of our oldest games clusters and the birthplace of the groundbreaking, iconic games that I am sure you are well aware of, “Lemmings” and “Grand Theft Auto”. Those are just some of the concentrations of games companies that are contributing to a huge drive in economic growth, innovation and creativity. Indeed, the industry is one that I am proud to say is truly British in its geographic representation.

According to recent figures from the trade association TIGA, 80% of games development jobs are located outside London, which is something many industries would, I think, aspire to. We recognise the benefits that that can bring to local economies, and, of course, the Government are committed to levelling up across the country. Is not the games industry a fine example of how that can be achieved? It plays such an important part in helping us to achieve shared prosperity across the UK.

As the hon. Member for Warwick and Leamington said, the industry is flourishing and promises more growth and success in the years to come. The sector contributed an estimated £2.9 billion to the UK economy in 2019. That is up £0.4 billion from 2010, which is huge growth. We understand that the sector has huge potential to continue to grow, and can make an enormous contribution to the UK’s future prosperity. That is why the Government are so committed to supporting its continued growth and why we introduced the video games tax relief in 2014. That growth has supported £3.7 billion of additional investment in UK games production, helping to strengthen the UK’s reputation as one of the leading destinations in the world for making video games.

I am also delighted to say that my Department will continue to fund the UK games fund into the next financial year, to support early-phase games development and talent. That includes the games fund Transfuzer programme, which has helped 400 graduates so far. I am thrilled that the 2021 competition is now open for applications, supporting another cohort of games talent, based in a range of regional hubs. Transfuzer helps graduates to go on to great jobs in games development, which is increasingly important as the industry has such demand for incredibly talented and ambitious individuals. That demand will only continue to grow.

The sector already employed some 27,000 people in 2019—a 42% increase on 2013. That is exactly why events such as the one at which I recently spoke, Leamington Spa’s “Interactive Futures”, and Games Careers Week, which will happen later this month, are vital. We must continue to inspire people to look for roles in our incredibly rewarding creative industries. In recent times another great success story has been the emergence of the UK’s e-sports industry, which presents another huge set of opportunities to explore, to drive growth and investment. We are excited to see how we can build on that, to see the UK established as a major e-sports destination.

However, while we can celebrate the games industry’s fantastic growth and opportunities, there are some challenges for the creative industries. The video games sector remained relatively resilient against covid-19 but, of course, the pandemic placed unprecedented pressure on some organisations and individuals across the economy, and some other sectors in DDCMS have been particularly badly hit. That is why the £65 billion three-point plan that the Chancellor set out last week, to provide support for jobs and businesses as we emerge out of the pandemic and forge a path to recovery, is vital.

The Budget announcement coincides with the publication of “Build Back Better: our plan for growth”, which sets out the Government’s plan to support economic growth through significant investment in infrastructure, skills and innovation. That highlights more than anything, I think, the digital and creative industry as a major success story in the UK’s potential future growth, and as a driver of innovation.

It is important to acknowledge some of the themes that the hon. Member for Warwick and Leamington brought out in his speech today. The industry really is an incubator for some high-end technology. He also highlighted the fantastic opportunities to gain really high-quality skills, well-paid jobs and exciting future careers.

However, we must also recognise that there is still a little bit of work to be done to ensure that video games are enjoyed safely by everybody. We know that our evolving digital technologies, such as video games, present some new responsibilities as well. There are social responsibilities to make sure that anybody using them is not exposed to harm. That is why we take seriously public concerns about loot boxes, for example, and why we launched a bespoke call for evidence last September. This sort of process will inform what we can do as a Government and as an industry to ensure that all consumers are well protected. We will announce the next steps in that process in the months ahead.

However, I want to end with a key positive message from the Government. We fully appreciate the amazing potential—indeed, the amazing achievement up to now—and the future growth potential of the video games industry. We want to exploit fully the UK games sector’s potential for growth and to cement its position as a world leader. We fully recognise the games industry’s importance and its future potential, and the contribution that the sector, which is exemplified in areas such as Leamington Spa, makes to British prosperity.

Finally, of course, something that I had forgotten to mention until now is the sheer joy and entertainment that video games bring to millions of players in the UK, not least a few in my own household. I am excited to see what opportunities the UK games sector will present in the future. It is an industry with an extremely bright future.

Question put and agreed to.