Since it has come to power in 1997 the British Labour government has done a lot of stupid things. Selling our gold reserves off cheaply, massively increasing the tax burden, spending a lot more than they earned, the Private Finance Initiative (PFI), tax credits, mismanaging the national health service, an illegal war in Iraq and Scottish and Welsh devolution for starters. But history may well judge their misunderstanding of the games industry to be their biggest blunder.

For us all to have a living the country must generate wealth. Traditionally this came from manufacturing in Britain. But Labour governments gave organised labour excessive powers which they abused to destroy the manufacturing base. The unions are probably the worst thing to ever happen to Britain and everyone here would now be a lot better off had they not been allowed to run amok. Manufacturing still works in other rich countries like Germany, Japan and Korea, it can be done.

So instead of trying to get manufacturing working the government emphasis was put on financial services to be the engine of our economy. This had a number of very unfortunate side effects, such as distributing wealth very unevenly to a small number of people and to one region of Britain, the area around London. It also made us very vulnerable as we are seeing now with at least 100,000 city jobs to go in the immediate future with the potential for many more to follow.

After the dot com boom and bust the government gave up on technology and information based industries, which was especially crass as these are our future. And no area of technology is more key than gaming.

Uniformed people have very unfortunate perceptions of what video gaming is. Many see it as adolescent boys zapping aliens in their bedroom, or if they are up to date as overweight housewives wobbling precariously on balance boards. What they don’t realise is that gaming has three core, fundamental advantages that will make it one of the world’s biggest industries. These are interactivity, connectivity and non linearity.

Gaming will inevitably grow to be the biggest entertainment media, bigger than film and television combined. But this will pale into insignificance compared with its other roles. For a start gaming will take over education. Completely. We are already seeing troops trained on combat simulators, people going to Baghdad playing MMORPGs to learn how the place works, people enhancing their mental agility with Brain Age, emergency service interactive training and so on. It is creeping on us subtly without anyone noticing, but education is starting to undergo a revolution.

And gaming will enter so many other areas such as management, law enforcement, national defence and so on. The technologies are so all pervasive that gaming will insidiously find itself everywhere. Already most homes have some video gaming device and most people walk round with one in their pocket, which is a massive change in just a few short years.

Some governments understand gaming and its importance to our future. Non more so than the Canadians who are throwing billions of dollars at it. They have now overtaken Britain as the number three development nation in the world behind America and Japan. And the way they are going they may well end up as number one. France, too, has seen the light, but unfortunately after the horse had bolted. They still have two of the world’s big global publishers, Ubisoft and Vivendi.

Yet Britain could easily have been number one. As a nation we have world class tradition in both technology and the creative arts. This is the land of Shakespeare, Turner, Agatha Christie, Damien Hirst and JK Rowling. This is the land of the jet engine, radar, penicillin, liquid crystals and the world wide web. We have the ideal skill base for gaming embedded in our genes and in our culture. And we have Clive Sinclair. His ZX Spectrum computer ensured that a whole generation of schoolboys was computer literate with many thousands of them learning to code right down at native machine level.

And what has happened to this massive British gaming talent? It has to a large extent gone. Emigrating to other more enlightened countries where their skills are in more demand and are better rewarded. There has been a massive brain drain so that most game development teams around the world now have a least one Brit. They are in Tokyo, Shanghai, Paris, Los Angeles and Quebec. They are everywhere. Very many of the people I have worked with are now scattered around the globe.

It isn’t all doom and gloom. British companies like Rock Star, Travellers Tales, Rare and Jagex are amongst the very, very best game developers in the world. They show what British talent can do when it is allowed to. We could and should have many dozens more like them.

Currently the British government is not just not helping the game industry, they are positively harming it. They are giving voice to misguided people like Keith Vaz and his self publicity scheme to attack gaming. They are getting Tanya Byron to investigate a problem when no problem exists. And they are thinking of using the BBFC to stifle the industry. Their stupidity knows no bounds.

What is needed is a Game Council, modelled on the already successful Film Council and Music Council. And this council should be tasked to encourage the game industry in every way they can. And they should be funded. Not with millions of pounds, but with many billions of pounds. There is no way a government could spend money better for our future wealth. And it is nothing compared with what they are currently throwing at the financial sector.