Clause 20
Finance Bill
Public Bill Committees, 15 May 2008, 2:30 pm
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
Thank you, Sir Nicholas. For a moment, you raised the hopes of some members of the Committee, given that play has now started at Lords.
The clause will increase the gross gaming yield bands for gaming duty in line with inflation for accounting periods starting on or after 1 April 2008. I draw attention to bingo as one particular gaming activity. My hon. Friend the Member for Putney has worked closely with the bingo industry. She has done a lot of research and had meetings with industry members. I am sure that she regrets her inability to raise her points in person. The bingo industry is struggling, for a number of reasons, but particularly because of the Gambling Act 2005, which I accept is going to be reviewed, and various changes such as the smoking ban and so on. Times are difficult for bingo halls, which play an important role in many communities. They have been very popular. I am sure that we would all agree that it would be a great pity if bingo halls started going out of business.
The Government will set out their policy on gambling, particularly on gaming duty, which covers bingo, so I would be grateful to know if the Minister recognises the concern about the bingo industry and the number of bingo halls going out of business. Secondly, in evaluating gaming duty, will the Government consider some reform or take any action to assist bingo halls? When considering clause 21, the Committee of the whole House addressed the issue of amusement machines, which is a similar area. A popular and traditional industry, which provides a great deal of pleasure to a lot of people, is facing difficult times. Perhaps we could use the opportunity to ask if the Government intend to do anything about rescuing an industry in trouble.
Jeremy Browne (Shadow Chief Secretary To the Treasury, Treasury; Taunton, Liberal Democrat)
I want to support the brief, probing speech made by the hon. Member for South-West Hertfordshire. I had the great pleasure of calling the bingo numbers in Mecca Bingo in Taunton recently, and was congratulated both on the clarity with which I did it and on not allowing myself to stray into those colloquial terms with which we are all so familiar.
The point was made to me on that occasion, and has been made to me on many other occasions, that bingo is an industry that suffers from what is commonly known as double taxation. That is problematic, given that the industry faces other pressures as a business. I am the last person to think that businesses should be propped up if they are unable to attract customers. It is for the bingo industry to appeal to people to spend their leisure time playing bingo, rather than watching television or going for a walk in the countryside or whatever else people might choose to spend their free time doing, but there are pressures on the bingo industry as a result of the smoking ban, most obviously, and other considerations. The sector is important, as it employs significant numbers of people. Bingo is also enjoyed as a leisure activity by many thousands of our fellow citizens. The point is constantly made that the taxation arrangements are disadvantageous compared with other forms of leisure pursuits with a gambling dimension. I would be grateful if the Minister responded to those concerns.
Kitty Ussher (Economic Secretary, HM Treasury; Burnley, Labour)
As the hon. Member for South-West Hertfordshire said, the purpose of the clause is to increase gaming duty bands in line with inflation for accounting periods starting on or after 1 April 2007. Such revalorising is in accordance with Government practice in recent years. I trust that that will be uncontroversial.
On the bingo industry, I, too, have had the pleasure of calling the numbers in my local bingo hall—congratulations to Gala Bingo Burnley, for giving me that opportunity. My constituents remarked that I was extremely bad at it, although I hope shortly to have the opportunity to practise further. I shall take lessons from the hon. Member for Taunton on style. I am intrigued, too, to know what type of research the hon. Member for Putney has undertaken on the bingo industry. The Committee should be told about her number-calling technique.
We are in close dialogue with the bingo industry. I congratulate the Bingo Association on the effective way in which it represents its members, with a strong voice. We very much hope that the dialogue will continue. In the Finance Act 2003, we made a point of reducing the average effective rate of bingo taxation from about 35 per cent. to nearer to 25 per cent. That was partly in response to the well-documented trend of bingo establishments closing. There are a number of factors behind that. Obviously the smoking ban—which is the right thing to do for the country—has played a part, producing that side effect. Demographic and social trends, too, are leading people to switch away from bingo, although many people still devote considerable leisure time to it.
The hon. Member for Taunton mentioned participation fees. The existence of those fees is not necessarily unfair, given the effective rates of taxation in comparable industries. Lottery operators face an effective tax rate of 24 per cent. For casinos, it is roughly 25 per cent., and the figure for bingo duty is similar. Amusement machine licence duty—discussed elsewhere—is about 21 per cent. Removing the participation fees would reduce to about 15 per cent. the effective rate for bingo, which would be out of line. There are other reasons why we have not bought the argument for removing participation fees, although we have considered it. When someone pays those fees, they are buying a service, and the fees should therefore be taxed at the appropriate rate. We have considered seriously all the points that the bingo industry raised, but we decided not to make any changes in the taxation of bingo in this Budget. The Bingo Association has made it clear that it will continue to lobby. We welcome that, and we welcome the conversation.
