Simply put, the clause increases the duty bands for gaming duty in line with inflation, ensuring that their value is maintained. It is a measure
that continues the practice of the last six Budgets. It is supported by the casino industry and is designed to prevent a tax increase being caused by the erosion in the value of duty bands by inflation. I commend the clause to the Committee.
The table in clause 16 will replace the table in section 11(2) in the Finance Act 1997. The figures in the bands in table of the 1997 Act amount to a total of £5.4 million, and anything over that is taxed at 33.3 per cent. The amounts stated in the table in the clause add up to £4.817 million, and anything above that level is taxed at 40 per cent. I would like the Economic Secretary to clarify for the record the fact that, in comparison with the 1997 Act, the clause sets out a higher rate of tax.
If the hon. Gentleman will be a little patient, I shall answer his question. I had not even finished summarising the proposition that he put to me.
The 1997 Act was the first point at which the bands were set out in their present form. There was an increase in duties in 1998, but there is no change in the rates this year; instead there is a revalorisation of the bands to which those rates relate. I hope that that answers whatever question the hon. Gentleman thought he had asked.
I turn to the question asked by the right hon. Member for Fylde. The measure of inflation was the retail prices index. The figure for inflation was 2.8 per cent. That was the rate in December 2003, a figure taken by convention under an agreement with the industry that has been in place for five or six years.
A number of measures of inflation are used by the Government for different purposes. The Economic Secretary will be aware that if the new measure of inflation had been applied, by definition it would have been a lower percentage increase. Was that option offered to the industry? By the Minister's own admission, the current regime has been achieved not by statute but by agreement.
No. For consistency and comprehensibility, we have used the same measure of inflation that we have used in past years. We chose not to use the new measure that the right hon. Gentleman has in mind, which is used principally by the Bank of England in deciding monetary policy.
Question put and agreed to.
Clause 16 ordered to stand part of the Bill.