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Conservative Members, as Her Majesty's official Opposition, will lend support if the Government recognise that, on this occasion, there has been sleight of hand or—let me be generous—an oversight, and that they had intended, as the Chancellor clearly stated, to put bingo on the same footing as the pools and the betting industry. That has not happened, hence we will support Government action in amending to the Bill to ensure that bingo players and the gaming industry have a level playing field. Amendments Nos. 6 and 69 would achieve that.

We are considering a problem that is simple to solve. Have the Government the will to live up to the Chancellor's words in the Budget statement as recently as 9 April? Conservative Members have not attempted to generate artificial anger, although it is easy to suggest that we have made such attempts. Representation after representation has been made on the issue. It is appropriate to cite the bingo club in my constituency—Top Ten Bingo in Dingle lane in Winsford—from which I received a letter. I did not solicit it, but it happened to arrive in my post this morning after I had prepared my remarks. It is so relevant that I shall quote from it. It is dated 9 May and states:

"Dear Mr. O'Brien,


As you know in his budget speech, the Chancellor announced that he was abolishing bingo duty. This follows his statement last year when he made it clear that he wanted to benefit both the players and the industry.


A consultation paper was issued in which the Minister"—

the Economic Secretary is named—

"wrote:-


'We want to deliver the same (as for bookmakers) successful reform for bingo that should allow bingo companies to invest more in growth of their clubs and increase their prize payout, which in turn should help boost attendances'."

Mr. Ryder, the club's general manager, continues:

"These aims cannot be realised because unlike the betting industry VAT will still apply to bingo. This means that the amount available to pay the new tax, invest more in clubs and to give extra meaningful prizes will be totally insufficient. Indeed in the medium term, according to research carried out by the Henley Centre, both stake money and prize levels are likely to decrease by 2007."

I mentioned the centre earlier, and Mr. Ryder's reference to it suggests that he is a member of the Bingo Association or has heard of its work. The letter goes on:

"There will therefore not be the growth in the industry for which we had hoped."

I am sure that the Economic Secretary takes the matter seriously. Mr. Ryder quotes his words in a consultation paper. Top Ten Bingo is a highly reputable club and an attractive venue for all those who enjoy the sport and entertainment.

Adam Price (East Carmarthen and Dinefwr): The hon. Gentleman referred to the differential tax burden on bingo when compared with other parts of the gaming industry. Does he accept that the new proposals, which

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increase the tax burden, discriminate against smaller clubs in particular? They would especially benefit from the abolition of par fees to which he referred.

Mr. O'Brien: The hon. Gentleman makes an important and telling point. I am sure that his constituency has many typical bingo outlets that are probably similar to those that characterise the sort of constituency that I represent on the English-Welsh border. Club ownership obviously varies from constituency to constituency, but the detailed scrutiny of a Committee allows us to look out for areas that will suffer from genuine cost burdens, new regulatory impacts, and a challenge to all those who run community services and provide the community's lifeblood. People feel that they can come together in such places and be part of the community.

Mr. Ryder's letter continues:

"The most disturbing matter for the industry is that the Chancellor has raised false expectations. Our customers are asking where are the price reductions and the bigger prizes they were led to expect."

That goes to the heart of the point made by the hon. Member for East Carmarthen and Dinefwr (Adam Price). Local bingo halls, perhaps single businesses or those with a very small company base, will have to recover a certain proportion of their overhead costs in order to stay in business. To do that, they need a level playing field, so as to be able to compete against the pools and the betting industry. They also need the incentive to back not only the sustainability of their businesses but their growth, which is what the Minister was seeking to encourage in the quote that I read out, and which he wanted the industry to understand that he was encouraging.

The absence of the removal of VAT is occurring alongside the unwelcome imposition of the gross profits tax. These businesses have accepted the GPT, but they remain burdened by VAT, unlike those with whom they have to compete and also the smaller businesses. That must also apply to the larger businesses, because they are seeking to attract people with the potential for winning prizes. We know from the extraordinary experience of the lottery that, as soon as there is a rollover from one week to the next, a whole load more tickets are suddenly bought. There is no logic to that, because the odds are always the same, mathematically, whether we choose the same numbers or different ones, from week to week. Mathematically, that is illogical, but from the point of view of encouraging business, it is very real.

Mr. George Osborne: I do not want to pick my hon. Friend up on his maths, but if the stake is larger in the lottery, the effective odds are better in a rollover week.

Mr. O'Brien: That depends entirely on individual circumstances, but the mathematical basis remains constant.

Mr. Osborne: There is a bigger stake.

Mr. O'Brien: Indeed, there is a bigger stake but, for my hon. Friend's maths to work, one would have to participate in the game to the same proportion. This discussion, however, is stretching the nature of our purpose here today to its limit.

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In addition to what Mr. Ryder says his customers are asking for, he says that they now realise that the expectations that the Chancellor raised are not going to be met. They also realise that, as bingo players, they are being unfairly treated compared with those using betting shops. This will often relate to two halves of a couple living in the same household, so conversations about this take place, however much people might believe that they do not. Mr. Ryder goes on to point out that

"the majority (75 per cent.) of bingo players are women"—

I did not know that statistic until I read it here—

"and the reverse is probably true of betting shops",

as I have just instinctively pointed out, although I did not have the evidence to do so until I read what Mr. Ryder had written. He goes on to say that

"this does not represent 'social equality', a phrase much used by the Chancellor on budget day and Tony Blair. I am therefore writing to express my great disappointment and dissatisfaction at what is now being proposed. I will be forced to face customers expecting improvements as a result of previous budget promises, that will be impossible for me to meet. I feel that the Chancellor is totally to blame for this and that the only way to redress matters is for bingo participation fees not to be subject to VAT."

As I said earlier, I prepared my remarks on this amendment before I read what Mr. Ryder had to say on the matter. He has put it very well, but I am afraid that I am not going to decline the opportunity to give the House some of the remarks that I had prepared earlier. The recommended solution is to make participation fees VAT-exempt. During discussions with Customs and Excise, it was made clear that the discretion to take such a step exists. If that proves impossible, however, it would be possible to get to the same position by reducing the gross profits tax to 4 per cent. The latter option would provide significantly less benefit to the consumer and the industry; it is, however, what has ended up in the amendments.

I wonder whether the Minister is prepared to give an absolute guarantee at the Dispatch Box today that he likes the look of what were amendments Nos. 5 and 68, to the extent that he will adopt them. Former amendment No. 68 is, of course, a better version of former amendment No. 5, although there might be a small EU law issue as to whether bingo being singled out would qualify under the broad categories applicable under the EU directive governing VAT. On the other hand, the Minister could achieve the same result by accepting our current amendments. Perhaps he will give a guarantee that he is prepared to accept the amendments that we were unable to pursue because of the amendment of the law provision—about which I had some issues, as we were seeking relief from an exemption in relation to bingo, rather than providing for an exemption, to which the terms of the amendment to the law resolution relate. I had to accept what had been decided, however, so I had to adopt this course.It is our duty to do our best to find a solution. Bingo could decline rapidly, in relative terms, unless the Government are prepared to acknowledge the seriousness of the issue.

The reforms announced on 9 April will not deliver the Government's stated objectives. The VAT element is largely responsible for the significantly larger tax burden

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on bingo. A KPMG study carried out in 2000 showed that it was being taxed at 34.1 per cent. then, but the current differential is still very great, and to make matters worse double taxation is now being introduced.

If the Government want to move, they can move very fast; if they want to stall, I dare say that they can do that. It is clear that they could remedy the problems inherent in what the Chancellor seems to have been determined to suggest he was delivering—something that is now being discussed by businesses throughout the country, and increasingly, by bingo players: naturally, when they get together the subject will arise, and the conversation is not one that I imagine the Government would wish to take place. I am suggesting a remedy—a way in which the Government might be able to make themselves more popular with bingo players. That may be the right way to bring about a better law, but I must say that it goes against my instincts.

Our amendment would deliver the Government's stated objectives and implement reform. It was on this basis that the industry accepted the move to GPT. Amendments Nos. 6 and 69 would remove the unfairness in the current system, and would enable the Government to live up to the expectations that they deliberately peddled to bingo players and the industry—while also being open to the charge of having been somewhat economical with their explanations in the Budget speech, and having previously failed to deliver on clearly stated objectives.

A considered response from the Minister would be helpful, and unless he can give the categorical guarantee and reassurance that I seek, we will press the issue. I could advance further arguments, but I hope that the Government have listened to what I have already said, and I do not want to take up more of the Committee's time.

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