Clause 20
Finance Bill
2:30 pm
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.