Clause 21
Finance Bill
12:45 pm
Angela Eagle (Parliamentary Secretary, HM Treasury; Wallasey, Labour)
The clause will increase all amounts of amusement machine licence duty from 4pm on 22 April 2009 and the new amounts are set out in the clause. The net increase in effective tax rate on machines as a result of the clause will be about 1 per cent. Therefore, the effective tax rate on machines will remain broadly consistent with the effective tax rates on bingo, casinos and the national lottery.
These changes will ensure that gaming machines make a contribution to the consolidation of the public finances. They also have to be seen in the context of the regulatory changes led by the Department for Culture, Media and Sport, which allow business to benefit from higher stake and prize limits. Therefore, these machines will effectively be more profitable, as it is anticipated that more people will use them.
We increased these rates for the reasons that I was talking about earlier with respect to consolidation of the public finances. The hon. Member for Hammersmith and Fulham asked about page 175 of the Red Book. That page sets out the assumptions for the baseline against which the scorecard costings are calculated; it is not actually the calculation itself. So that is a definition of how the scoring is done. That was done with a forecast of RPI in September 2009, which is the usual way that these things are done. I hope that that answers his question.
The hon. Gentleman also asked about the consultation. No decisions have been taken yet, but officials have already had pre-meetings with BACTA, the organisation that has already been mentioned by the hon. Member for Rochford and Southend, East. We hope to launch the consultation on a potential move to a gross profits tax soon. I cannot give him any more details at the moment, but the process has begun with initial discussions.
The hon. Gentleman also mentioned off-season closures. Anyone who knows seaside resorts, as I do, will know that there is an on and an off season. Seasonal licences are permitted for small prize machines. Those licences basically give an eight-month licence for a six-month duty rate. If there was a move to gross profits tax, we would also want to take account of seasonality in the way that we levied that tax for small machines. So that is an issue that the operators in the hon. Gentleman’s constituency, either in the Billy Bunter cafĂ(c) or elsewhere, can make representations about, either directly or via BACTA. We look forward to having a productive discussion with him about that.