Clause 9

Part of Finance Bill – in a Public Bill Committee at 1:30 pm on 10 May 2007.

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Photo of John Healey John Healey The Financial Secretary to the Treasury 1:30, 10 May 2007

We turn to amusement machine licence duty which is a slightly esoteric and long-standing excise duty. It is nevertheless important to those who run establishments in which gaming machines form a valuable revenue source. Since 27 October last year, our social regulation, or our social law, has allowed machines with a 30p stake and a £25 jackpot—in tax law, the so-called category C machines that are in pubs, clubs and arcades—to increase their maximum stake and prize to 50p and £35. In return, the industry agreed to a stronger code of social responsibility on the operation of these machines.

The definitions of gaming machines in excise law have traditionally followed those in social law. We have had this discussion before in Finance Bill Committees. However, as things stand, the definition of a category C machine in tax law can be amended only through primary legislation in a Finance Bill. The clause therefore amends the definition in line with social law, effective from22 March this year.

An operator of category C gaming machines can now increase the maximum prize that their machines offer from £25 to £35 without becoming subject to a higher level of duty. This is the first opportunity that we have had to legislate for this change, and I hope that members of the Committee—there are eight Members on each side who last year supported the cause of an increase in stake and prize levels by backing early-day motion 1503—will be glad that their campaign and their arguments have found favour, first with the Department for Culture, Media and Sport and now as reflected in our taxation change.

I also should confirm to the Committee that the change has been widely welcomed by the industry. The national president of the British Amusement Catering Trade Association, the trade federation that takes an interest in amusement machines, welcomed the Budget decision by saying that

“it’s a big thank you to Mr. Brown...It’s good news.”

In addition to bringing tax law in line with social law, clause 9 also amends the existing excise legislation so that in future we are not in this position. In future, commissioners may by order increase the maximum stakes and prizes permitted for each category of machine for the purpose of amusement machine licence duty. The clause will prevent tax law from getting out of step with social law, and I commend it to the Committee.