Clause 17 - Amusement machine licence duty: rates

Finance Bill – in a Public Bill Committee at 3:50 pm on 6th May 2004.

Alert me about debates like this

Question proposed, That the clause stand part of the Bill.

Photo of John Healey John Healey The Economic Secretary to the Treasury

Amusement machine licence duties are charged on the licences that allow amusement machines to be provided for punters to play. The clause makes a routine revalorisation of the rates of amusement machine licence duty for gaming machines in categories B to E. The rate of duty on category A machines—they are purely amusement machines such as pub quiz machines and video games—has been frozen.

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk

Even the Association of Licensed Multiple Retailers recognises that the provision is simply an increase to take account of inflation. Although it would welcome no change, it acknowledges that the impact of the duty change will be slight.The main issue for the industry is the rationale for the licensing system as a whole. Indeed, the Government say in the Red Book that they will defer reform of amusement machine licence duty, and major reform of the taxation of gambling, to align with the forthcoming gambling Bill.

There is no doubt that pub gaming machines, in particular, are being hard hit by the proliferation of fixed-odds betting machines in high street outlets. The ALMR reports that its members have seen takings from pub machines go down by 6 per cent. on average, and in some cases by as much as 18 to 20 per cent. In small outlets and rural areas especially, that level of loss threatens the profitability and even the viability of some small businesses.

I have two questions for the Minister. First, could he confirm that the position remains as outlined at the Budget and that no further change will take place until there is a chance to consider it in the context of the gambling Bill? Secondly, can he outline the extent to which Treasury thinking on the more general reform of gambling has moved on?

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I am grateful to sit under your chairmanship, Sir John. This is my first time on a Finance Bill, and I am glad that there is someone with experience to guide me should I go in the wrong direction.

In my constituency, gaming machines form a vital part of the local economy by preserving our labour clubs. Many of those clubs would not be able to survive financially without the benefits provided by gaming machines. Many people who run the local

labour clubs are concerned to know where Government thinking is going when it comes to taxing that pleasure. The discussion is similar to an earlier one about cigarettes, and we must ask: do the Government want to try to discourage people from using gaming machines and is that the prime purpose of duty, or do they simply want to raise money?

The Government have proposed that we have four bands of gaming machines, rather than the present five. In one case, that will allow for unlimited stakes. As we move into that future, some idea of where the Government's thinking on gaming duty will be important.

Photo of John Healey John Healey The Economic Secretary to the Treasury

Let me say to the hon. Member for South Norfolk that the policy and the approach set out in the Red Book have not changed. It makes sense to consider and make decisions about any prospective reform in gaming duty in the context of the wider and more radical potential changes in social law. It makes sense that we make those decisions in tandem and implement them in tandem, which is why we are aligning any potential reform of amusement machine licence duty with the wider changes, precisely as set out in the Red Book.

It is a pleasure to see my hon. Friend the Member for Rhondda (Chris Bryant) on the Back Benches of the Standing Committee for the first time. He poses a good question: what is the principal purpose, or what is the range of purposes, for the design and operation of amusement machine licence duty? That was our starting point last year when we issued a public consultation on the current system and on proposals and possibilities for longer term reform. It is true that this system, like some of the previous gaming duty systems that we have now overhauled, is outdated and inflexible. In many ways, aspects of it are unfair, particularly for the category A machines, and in some parts of the industry it acts as a barrier to entry. Those were the questions that we posed as part of the consultation. We are now revisiting them, and we will need to do so again when we make decisions about whether to reform amusement machine licence duty, and if so, how.

I hope that the Committee will give the much narrower question of the revalorisation set out in clause 17 its backing.

Question put and agreed to.

Clause 17 ordered to stand part of the Bill.