Clause 21
Finance Bill
12:30 pm
Greg Hands (Shadow Minister, Treasury; Hammersmith and Fulham, Conservative)
Clause 21 is closely related to clause 22 and raises the amusement machine licence duty, or AMLD, rates payable on gaming machines. The clause is notable for the level of the duty increases within the various categories under consideration. The increases are not entirely uniform, but they are all significantly above the rate of inflation. The Government have yet to explain their reasoning for those increases, and the Red Book fails to mention the issue at all, beyond noting the additional £20 million in revenue that will be raised.
In fact, page 175 of the Red Book lists AMLD among those duties rising by this year’s third-quarter RPI, which is clearly wrong. The rises are about 9 per cent. on last year’s Budget, and that figure is certainly nowhere near any RPI figure that I have seen for a number of years. For example, a 12-month category A licence rises from £5,160 to £5,625, which seems to be a lot more than 3 per cent. and more like 9 per cent. A six-month category C license rises from £400 to £435. Those are rises of 9 per cent. and 8.75 per cent. respectively. We were told in the Red Book that the rises were at the rate of third-quarter RPI. They are nowhere close to that.
The amount of licence duty payable is determined, at present, by the period covered—one to 12 months—and the number and category of machines. Machines can have very different maximum prize values and minimum stakes, and it is right that duty reflects that. The Opposition have repeatedly drawn attention to the lack of sense in taxing highly addictive machines, such as the B2 fixed odds betting terminals found in bookmakers, at the same rate as the B3 machines, which are the softer form of gaming machines found in bingo halls and gaming centres. We have great concerns about the growth in the popularity of fixed odds betting terminals, which appears to be aiding migration away from arcades.
In a 2007 prevalence study, problem gambling associated with FOBTs was the second highest form of problem gambling, with a problem gambling rate of 11.2 per cent. My hon. Friend the Member for Putney (Justine Greening) raised those concerns at length last year, so I will not repeat them this year, but the minor recalibration of the duty bandings in this year’s Budget has not addressed the problem. The Budget announced an imminent consultation on switching amusement machine licence duty to a gross profits basis rather than a licence charge, but further detail is yet to be forthcoming. It would be helpful if the Minister said when the consultation will be launched and what options are being considered to reflect the different machines, and their different level of addictiveness, covered by AMLD at present. I would particularly appreciate an explanation of why she is maintaining that the figures on page 175 of the Red Book, which state that the rises are way in excess of RPI, are based on this year’s third-quarter RPI.
I look forward to hearing the Minister’s response.