| Previous Section | Index | Home Page |
10 pm
There is every indication that the casino industry is thriving and can afford to pay the increased duty. Receipts of gaming duty are up on previous years, and the drop--the amount staked at a casino--has increased, particularly in larger, more profitable casinos. In the 12 months to December 1997--the most recent figures we have--the drop in larger, more profitable casinos increased by around 8 per cent. over the previous 12 months, and the gross gaming yield increased by around 10 per cent. That demonstrates the industry's ability to pay more tax.
Secondly, I am aware of the industry's representations on indexation, and I am persuaded that there is a case for creating an environment that allows the industry and its investors a reasonable level of certainty in which to operate and plan. Therefore, I am prepared to give a commitment to index the gaming duty bands for the remainder of this Parliament.
That said, I should make it clear that, if the business climate in which the casinos operate were to change significantly--through further deregulation, for example--we would not rule out the possibility of further restructuring the duty in future, to ensure that the level of taxation remained fair. Subject to that proviso, I accept the principle of indexation for the lifetime of this Parliament. However, the amendment proposed by the Opposition is unacceptable, in that it attempts to nullify the changes to the duty bands and rates, and is technically flawed by the way in which it deals with indexation.
I now turn to the restructuring of the bands proposed in amendment No. 15. I am not persuaded by the argument that the amendment would reduce the liability of London casinos as the proposed changes would significantly reduce the revenue that we intend to collect from the casino industry. It is quite clear to the Government that the industry can afford to pay the additional duty.
I am aware of the trade representations concerning the structure of the duty bands, in particular the impact of the Budget changes on some of the less profitable London
clubs--those with gross gaming yields of between £5 million and £12 million--and the points that the hon. Member for Rochford and Southend, East made about his experience in Southend.
I shall continue to ensure that the forecast revenue yield on the measure is maintained, but as a member of a Government who are prepared to consult and listen, I am prepared to consider the industry's proposals on the best way forward in respect of the structure of the bands. As has already been said, my officials continue to discuss the issue with representatives of the industry. I shall report back to the House with my findings.
The amendments are unnecessary and defective, and do not represent the best interests of the taxpayer in ensuring that the Government receive a fair tax yield from the casino industry. As I have said on a number of occasions, the industry is under-taxed compared with most other betting and gaming sectors, and we believe that it can afford and should pay the proposed increase in the name of fair taxation. Therefore, I ask the Committee to reject amendments Nos. 14 and 15, and support the Government in the clause. I hope that my comments tonight, particularly on indexation and restructuring the bands, will be helpful to the Committee.
Mr. Fallon:
This has been one of the most rewarding debates that we have so far enjoyed in Committee and, perhaps, in this Parliament. I thank my hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) for drawing the Committee's particular attention to the plight of provincial casinos. That has been well highlighted tonight, and I am sure that the Government are now aware of the impact of what they propose, which does not fall entirely disproportionately on London but, as my hon. Friend so skilfully pointed out, also impacts on some of the provincial casinos.
I thank the hon. Member for Kingston and Surbiton (Mr. Davey) for his support for the amendment. He well illustrated the differential effect of the Government's proposals and the uncertainty caused to an industry that expected the Government to continue the well thought out deregulation proposals of the previous Government.
I thank my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) for the detailed flaws that he exposed in the Government's proposals. Conservative Members were amazed to hear the hon. Member for Brent, North (Mr. Gardiner) sneer at the effect on London employment. In this his capital city, 4,500 people are employed in the industry. He did not seem to think that that mattered. He did not seem to think that it was even worth concentrating on the difference between gross profit and gross yield.
Mr. Fallon:
Before the hon. Gentleman tries again, I remind him that we are talking here not about the difference between the effective rate levied previous and subsequent to the Budget, but about the difference in duty. The difference in duty for casinos with a yield of between £5 million and £12 million, is an increase of the order of 50 per cent., and for casinos above that, an increase of between 40 per cent. and 30 per cent.--not of the order that he suggested.
Finally, I come to the Financial Secretary's remarkable speech. We had some blustering about the Government not needing to consult. That was not what we heard last
night from the Paymaster General. He took a pride in the consultation. He admitted that the Government got it wrong on individual savings accounts and on corporation tax. He took pride in the fact that the Government were ready to come to the House and correct the detail.
We heard a new theory on consultation tonight--that the Government can levy any duties that they think of, and, if they get them wrong, it does not matter. Happily for the casino industry, and happily for our future considerations on the Bill, the Financial Secretary has run up the white flag. She has accepted for the first time in our proceedings the principle of a Conservative amendment. She has said--we thank her for this--that the Government accept amendment No. 14. The first time that any Government have considered the principle of indexation for casino duty, she has said that a Labour Government have to be bound by it. Only a Labour Government could suddenly impose the kind of duties with which the industry were faced, which wiped 30 per cent. off the share value of two of London's leading operators.
The Financial Secretary pointed out quite fairly that, in some respects, amendment No. 14 may be technically defective. Fine. But she has accepted the principle of indexation. Never again will she or her Chancellor in this Parliament come to the Dispatch Box and impose that kind of 40 per cent. increase. Tonight, the Financial Secretary has run up the white flag and said that she accepts that gaming duties should for ever be indexed to the retail prices index. We thank her for that and for her surrender, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr. Fallon:
I welcome this debate, which is necessary only because the Financial Secretary did not respond to some of the general criticism made by me and the hon. Member for Kingston and Surbiton (Mr. Davey).
When the Conservatives left office almost a year ago, we left in train a sensible, well-planned programme of deregulation, whereby there would be new casinos in different areas of the country and--picking up on the well-worn theme of modernisation--the casino industry would be modernised. We suggested liberalising the gaming industry by allowing, as the hon. Member for Kingston and Surbiton mentioned, a more enlightened membership system that would include postal and group membership, whereby groups of visitors from America and beyond could pre-book tours of London casinos. The programme would allow a modest measure of advertising--not nationally, but in telephone directories and hotels.
Finally, we advocated deregulating the industry to enable certain casinos to have more gaming machines. We suggested an increase from six machines to 20.
We should not pass the clause without raising those issues, because we will have no further opportunity to do so during the consideration of the Bill. I understand that almost all that deregulation has been put on hold. Measures that were expected to be implemented last October were delayed until this spring, and, as the Chancellor of the Duchy of Lancaster confirmed to the Select Committee on Deregulation this morning, they are
further to be put on hold. The industry faces not simply a massive, unjustified increase of 40 per cent. in duties, but no guarantee of further progress in the deregulation that the previous Government set in train and to which we thought the successor Government were committed.
It would not be right for us to give the clause final approval without hearing from the Financial Secretary what proposals she has to implement the deregulation measures that we set in train. If she does not want to prolong the debate or encourage me to intervene again, I hope that she will explain to the Committee why the clause should stand part of the Bill.
Question put and agreed to.
Clause 11 ordered to stand part of the Bill.
To report progress and ask leave to sit again.--[Mr. Robert Ainsworth.]
| Next Section
| Index | Home Page |