John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

We move on here to gaming duty and gaming duty bands. Clause 10 will increase the gaming duty bands in line with inflation for accounting periods starting on, or after, 1 April 2006. Increasing the value of the duty bands in line with inflation ensures that the real value of the thresholds above which the casino operator is liable to pay the higher rate of tax are maintained.

In looking at the decisions on gaming duty bands, there has been a question on the taxation of remote  gaming. As we confirmed in the Budget, we are not looking to make announcements on the taxation of remote gaming until Budget 2007 so that the tax system can reflect detailed regulations for the sector. They are currently being developed by the Gambling Commission and are planned to be ready by the autumn.

The industry acknowledges the international nature of the remote gaming industry and recognises that it raises difficult issues for taxation. Nevertheless, the Government will continue the work with the industry over the coming months to consider the shape and rate of a valid tax regime for remote gaming. It is not an easy issue. There are many factors influencing the decision by remote gaming operators about where to locate. It is not clear that the rate of remote gaming duty will be the decisive factor. There may not be a tax solution to the aspiration of bringing remote gaming operators onshore into the United Kingdom and therefore under UK jurisdiction for social regulation purposes.

The decision to delay an announcement resulting from the Budget 2006 on the remote gaming system and bands has been warmly welcomed by the Remote Gambling Association. Officials and I met members of the Remote Gambling Association before the Budget and shall continue meeting them to discuss the implications of this issue. Clause 10 therefore revalorises the existing duty bandings. That is in accordance with the industry expectation and has been the practice of the Government in recent years. I commend the clause to the Committee.

Paul Goodman (Shadow Minister (Childcare), Treasury; Wycombe, Conservative)

It was useful for the Financial Secretary to say what he said about remote gaming duty. It is clearly a complex issue. It seems reasonable to raise the threshold in line with inflation. We have no further points to make.

Colin Breed (Shadow Minister, Treasury; South East Cornwall, Liberal Democrat)

We largely agree with that. The Gambling Commission has serious work to do. We hope that there will be proposals in next year’s Budget, but we recognise the complexity of such matters. In the meantime, the proposal is sensible and we support it.