Finance Bill

The hon. Member for Wirral, West is getting himself into difficulty. I certainly cannot reach any conclusions without hearing from the Financial Secretary. We also want a reassurance from the Minister that the measures will not have the consequences for the industry that have been suggested. As the hon. Member for Wirral, West makes his way towards the Chair, may I say that although we have not heard an explanation of the measures from the Financial Secretary, others have not been shy to offer their explanations? According to The Times, the Chancellor’s announcement was interpreted as having signalled"““his personal distaste for gambling””." The Guardian reported that MPs believe that the Chancellor"““is not keen to see an expansion of the gambling industry””." The Financial Times reported that the Chancellor’s scepticism for liberalising gambling,"““evidenced by his decision to impose a 50 per cent. tax on big casinos in the Budget, means a Brown premiership would be unlikely to impose a new super-casino””." Now that the hon. Member for Wirral, West is back in his place, I can tell him that the Daily Mail reported:"““Tessa Jowell’s efforts to boost betting with the controversial Gambling Act were in tatters last night””." It reminded readers that the Chancellor and the Culture Secretary had not exactly formed a mutual admiration society and that she had not yet been reported to have signed up to his leadership campaign. Such speculation is a reminder that these proposed changes in taxation are meant to be marching in step with the implementation of the Gambling Act 2005, to which the Financial Secretary referred, and, especially, the setting up of the new regional casino. However, while we have such proposed tax rises, we do not yet have the casino. Given that the casino and the implementation of the Act are directly related to the rates, let me remind the Committee of the story so far. The Gambling Act, which will bring the regional casino into being, was preceded by a draft Bill that was examined by a Joint Committee of the Lords and Commons. In a submission to that Committee, the Treasury said that the proposed programme of deregulation"““raises a number of challenges and issues on tax””." The Financial Secretary told the Committee:"““There is a very important potential supplementary role for tax reform to reinforce and reflect the sort of regulatory changes that the Bill is looking at””." He also said:"““On the tax side we are inevitably at a relatively early stage””." He told the Committee that a steering group of officials from the Treasury and DCMS had been set up in part to"““form the modelling that is obviously essential to considering any tax options for the future””." Brigid Simmonds of Business in Sport and Leisure told the Committee:"““Investment will be dependent on taxation””." The economic impact study carried out by Pion Economics for the cross-industry group on gaming deregulation estimated that inward investment could amount to as much as £5 billion. Mr. Byrne of Sun International told the Committee:"““We have been planning to invest upwards of £500 million if the regulatory conditions are absolutely right … and so on””." The Government’s response to the Joint Committee stated:"““The Treasury will use this work””" —the work of the steering group of officials with which the Financial Secretary will be familiar—"““when it considers the options for the future gambling tax regime.””" A Bill was then introduced. It was reported that the Department for Culture, Media and Sport took the view that tax rates on gaming should be cut to ensure that the impact of the Bill was ““revenue neutral””. On Second Reading, the Culture Secretary said that this was ““an error.”” She also said:"““The point being made was that revenue is not a motivator for this legislation.””—[Official Report, 1 November 2004; Vol. 426, c. 30.]" During consideration of the Bill, the number of proposed regional casinos was whittled down to one. After the Bill was enacted, a casino advisory panel recommended that one regional casino should be sited in Manchester. The House of Lords Select Committee on Merits of Statutory Instruments expressed concerns about the potential effect of the decision on problem gambling, and 83 Labour Back Benchers signed an early-day motion urging the reconstitution of the Joint Committee to examine the casino advisory panel decision. The Government then introduced a single order to put into effect the decision in relation to all 17 new casinos. As the Committee knows, in the other place the Government lost the vote on the draft order that would have established the casino in Manchester. Before I put some questions to the Financial Secretary, it is worth reminding the Committee of what he said about remote gaming during the passage of last year’s Finance Bill:"““It is not an easy issue. There are many factors influencing the decision by remote gaming operators about where to locate. It is not clear that the rate of remote gaming duty will be the decisive factor.”” —[Official Report, Standing Committee A, 11 May 2006; c. 88.]" Setting aside, just for a moment, the views expressed by the industry, by independent analysts and so on, I shall put a few simple questions to the Financial Secretary. First, what specific estimate has the Treasury made of the impact of clause 7 on old and new casinos, on the profitability of the industry, on investment from overseas, and on jobs? Will that estimate be published? Secondly, what modelling, if any, did the Treasury do on the impact that any new duty on online gambling would have on applications for licences by companies based overseas? Thirdly, how many licence applications do the Government expect to receive? Fourthly, does the Chancellor indeed have a personal distaste for gambling, and, if so, to what degree, if any, has it shaped his Budget decisions in these clauses?