Finance Bill

I thank all those who have contributed to the debate, especially the hon. Member for Dundee, East (Stewart Hosie) and my hon. Friend the Member for Barnsley, Central (Mr. Illsley) for speaking to their amendments. I also thank the Front-Bench spokespersons from both Opposition parties, and I am grateful for the contributions from the right hon. Member for Suffolk, Coastal (Mr. Gummer) and my hon. Friend the Member for Stockton, South (Ms Taylor), as well as from the hon. Members for Wellingborough (Mr. Bone) and for Bath (Mr. Foster). As I am sure has been rehearsed many times, the rate increase is part of a package of measures that includes making bingo participation fees exempt from VAT. The principal aim has been to simplify bingo taxation; as we know, the industry has been asking for that for many years. Alongside the removal of VAT on bingo in this Budget, the bingo duty rate of 22 per cent. represents a reduction from a level of around 35 per cent. in 2003. We have to look at the effective tax rate which, on a comparable basis, was estimated at 24 to 25 per cent. before the Budget. The basis of that estimate was explained in some detail to the industry, which accepted it in correspondence with the Treasury before the Budget. However, the industry has since argued that the Red Book costing of the removal of VAT from gambling participation fees was wrong. Some hon. Members have mentioned the High Court case. We have made it clear in previous debates that costings were based on the law as it stood at the time of the Budget. Key assumptions in the costings came directly from information provided by the industry, so they are not a fantasy. That information from the industry included detailed modelling on the impact of extra irrecoverable VAT, as well as detailed information from smaller clubs. I have listened carefully to the concerns expressed by hon. Members today and in Committee, and I have read the transcript of the debate in the Committee of the whole House. I recognise the importance of bingo to local communities that has been pointed out by all those who have spoken this afternoon, and that is why we acted to simplify the regime, removing VAT and lowering the effective tax rate to 22 per cent. That is down from the 35 per cent. that was in place as recently as 2003, and it is below the 24 to 25 per cent. range in the pre-Budget report. Let me stress again that that figure was agreed with the industry at the time. That is not all that we have done. The Gambling Act 2005 removed the 24-hour rule and the old membership requirements. It also allowed bingo operators for the first time to retain stakes, to be paid out as prizes at a later date. The bingo sector has also benefited from changes to gaming machine law, so it is not true that we are not helping it—and of course, the help that we are giving is ongoing. Despite my short tenure in this post, I have already met representatives of the industry, and that consultation will be ongoing. All taxes are kept under review, but decisions are taken in the round at PBR and Budget time. All the amendments before us today would cost money—up to £35 million a year, depending on the amendment. That would have to be found from tax increases elsewhere or cuts in public expenditure. I will continue to engage with the industry. I have already asked for evidence and data from its representatives on the points that they have raised, some of which has been received and some of which we still await. The information will be rigorously analysed, as hon. Members would no doubt want us to ensure that the figures are accurate. We can assure hon. Members that we will continue to have discussions on the state of the sector and the impact of taxation in the run-up to the next PBR and Budget. I am afraid I cannot support any of today's amendments, but on my assurance that we will continue to work with the industry, I ask hon. Members to withdraw their amendments.