Finance Bill

I thank my hon. Friend for that intervention. We touched on that issue in the debate on clause 114, which covers the duty on online gaming. As was pointed out, there is now an incredible anomaly, in that playing online bingo will now attract far less tax. Surely we should all recognise the social benefits of bingo clubs for their clientele. It is therefore an incredible anomaly that we should be taxing the online version significantly less than the club version. The Bill's consideration in Committee of the whole House was, as I said, some two months and two Exchequer Secretaries ago, and we have seen some amazing figures since then. During the debate on clause 20 in May, I questioned the Government's figures for the cost of removing VAT from participation fees—in other words, the theoretical cost of the linked clause 112, which we have already debated. I was referring to the cost assuming that VAT was being paid in all areas. We have now obtained more information on how the Government arrived at their figure of £50 million, through the answers to some written questions. On 18 May, the Financial Secretary to the Treasury replied that the cost of removing VAT on main-stage bingo—the standard form of the game—was some £20 million. In one of her few acts during her short-lived nine-day reign in the Treasury, the hon. Member for Burnley (Kitty Ussher), the current Minister's immediate predecessor, added on 10 June that the cost of removing VAT on interval bingo—the newer form that the High Court ruled on in the VAT tribunal case—was some £25 million. That adds up to a total of £45 million. As I said in the Public Bill Committee, I therefore assumed that the remaining £5 million of the £50 million related to participation fees on equal chance games other than bingo—principally poker. That is the estimate relating to the £50 million in the Red Book, as I see it. In any case, the estimates for 2009-10 back up the argument that I made in the debates on clauses 20 and 112 that the industry will, in practice, pay more as a result of all the measures in the Finance Bill. We are not aware of any major operator paying VAT on interval bingo and, after the court ruling, it is hard to believe that any operator would even contemplate doing so. As I have said, a number were also withholding VAT receipts on main-stage bingo, and that number is now likely to swell. It is reasonable to conclude, therefore, that actual receipts would have been below £20 million for 2009-10, before the court ruling, and that they could now be zero. However, the Red Book shows that the increase in bingo duty is expected to raise £35 million. Far from reducing the effective tax rate, as the Minister's pre-predecessor insisted, the Government's proposals appear to constitute a tax hike of at least £15 million. This matter cropped up yet again in the Budget debate, and the Financial Secretary was wide of the mark when he said:""Overall, the announcements in the Budget on the taxation of bingo are welcome to the industry."—[Official Report, 23 April 2009; Vol. 491, c. 434.]" I found that absolutely extraordinary, but the point is that no one really knows for sure, because the Government refuse to be definitive. The current Exchequer Secretary, who is with us today, told us during the last sitting of the Public Bill Committee on 25 June:""The £50 million is made up of the cost of recovering VAT on mainstage bingo, interval bingo and card rooms. The roundings are to the nearest £5 million, so although £20 million, £25 million and £5 million are not exact figures, they show the proportions."––[Official Report, Finance Public Bill Committee, 25 June 2009; c. 618.]" That is an extraordinary lesson in mathematics: figures of £5 million, £20 million and £25 million can all be subject to a rounding error of £5 million. Yet that is what the Red Book calculations are based on. It is absolutely amazing.