Finance Bill

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Harry Cohen (Leyton and Wanstead) (Lab): I suppose that I should declare an interest—although it has to do more with money being paid out than money coming in—in that I half own a greyhound with my hon. Friend the Member for Walthamstow (Mr. Gerrard). In total, she has won about 10 races out of 64, including the one before last. I can give a tip to my hon. Friends: I think that she will win again in the next two or three races that she runs. The all-party greyhound group have a dog called Go Running Whip, which starts its campaign in the greyhound derby this Saturday. My hon. Friend the Member for Walthamstow tells me that he is on it at 500:1, so he will be very rich if it wins.

The clause is about gambling and the greyhound industry. I welcome the fact that there will be no betting tax for dog racing, which will be a boost to the industry. I understand that there has been an agreement between the British Greyhound Racing Board and the bookmakers for an increased levy on the bookmakers, the proceeds from which will go to the industry. Some of that money will also go to the welfare of the greyhounds, particularly retired ones. That is important; not enough has been done on that in the past. The industry has made improvements to look after retired greyhounds. I welcome that, although more needs to be done. I am also sympathetic to an important campaign on the issue by the League Against Cruel Sports.

The problem with the levy is that it is voluntary. In the past, a number of the bookmakers have not paid up. They are a minority, but I believe that even now a number of bookmakers are saying that they will not pay up to the levy. They are freeloading on the sport and on the industry. My right hon. Friend the Minister for Sport and Tourism has made some strong statements on the issue and expressed his concern about non-paying bookies. I would like the Economic Secretary to say whether he will keep an eye on the situation. All the bookies should pay. If the voluntary scheme does not operate properly, it should be made compulsory, so that the money can be available for the industry. Will my hon. Friend also look at how the money from the levy is spent and ensure that it goes towards the rehoming of retired greyhounds?

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I recently made a donation. Under the gift aid scheme, if an individual gives £100, another £28 can go to the charity. Would it be possible to extend the scheme to businesses such as greyhound tracks and bookmakers, perhaps by allowing an offset against their tax bill, so that additional money could be raised for the retirement of greyhounds? I hope that the Economic Secretary will consider that suggestion.

The Chairman: Order. I appreciate the hon. Gentleman's concern, which I share, for retired greyhounds. However, I hope that the Economic Secretary will not be tempted too far into a response, as the matter does not closely relate to the clause under discussion.

Mr. Howard Flight (Arundel and South Downs) (Con): May I briefly add my welcome to you, Sir John? I almost feel that we should consider setting a precedent by allowing you to speak when we get to clauses 139 to 270 and all the schedules on pensions.

These measures are part of a wider opening up of gambling everywhere. There is a coincidence of interest between the Government and the industry, in that the Government get more tax and the industry gets more business. It may sound old-fashioned, but I have moral concerns about a business that is based on exploitation of the weaknesses of the less privileged. I can think of a certain past Prime Minister who may have had some objections in principle. I wonder whether the Government have any wider policy on the subject, given that we may end up with forms of gambling on every high street.

John Healey: A number of interesting and wide-ranging points have been made. I shall touch on them but not dwell on any for too long.

Clause 15 is not part of the opening up, as the hon. Member for Arundel and South Downs (Mr. Flight) put it, of the gaming industry. However, he raises proper concerns. Having given evidence to the cross-party pre-legislative scrutiny Committee that was set up by both Houses to consider the draft legislation on the future of the gaming industry, I am aware that such concerns were put to it and that it has examined them. At present, the Government are considering the observations of that Committee, which reported just before Easter. In due course and before long we will set out the Government's conclusions and proposals for the way ahead, taking into account the serious work undertaken by that Committee, which was chaired by the hon. Member for Ryedale (Mr. Greenway).

I must admit to my hon. Friend the Member for Leyton and Wanstead (Harry Cohen) that, to be perfectly honest, I never know where I am with a Running Whip. Even odds of 500:1 do not make it any more likely that I would go with it, but I was interested to hear about his involvement with the industry. I recognise his interest in the welfare of retired greyhounds, but I point out that the operation of the levy is principally a matter not for me but for my right

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hon. Friend the Minister for Sport and Tourism. I shall certainly draw his attention to my hon. Friend's concerns.

I understand the broader points that the hon. Member for South Norfolk (Mr. Bacon) made about betting exchanges and offshoring in the bookmaking industry. Both concerns are wide of the tightly drawn provisions in clause 15, but let me say that I am keeping a close eye on betting exchanges and have done so for the past year or more. As the Budget confirmed, officials are taking another close look at whether we have an appropriate taxation regime for betting exchanges, and in particular considering the concerns that some have raised about the use of betting exchanges by people who are effectively running businesses through them, rather than acting as individual punters.

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The clause, however, is being introduced to maintain the existing equitable treatment and level playing field in the current tax treatment of pool betting. It is being introduced as a consequence of changes to social law that are making their way through the other place at present, which will affect the current administration of pool betting for horse and greyhound racing.

Those changes are being introduced by the Horserace Betting and Olympic Lottery Bill and will result in the dissolution of the Tote, which has the current responsibility for the administration of pool betting for British horse racing. The changes introduced by that Bill will allow the Tote's successor company, which is expected to be a racing trust, to retain exclusive rights to administer British horse race pool betting for a maximum of seven years. After that, the market will be open to competitors to enter.

In order to maintain the current equitable treatment, clause 15 will amend the Betting and Gaming Duties Act 1981. It will amend or remove some soon to be outdated references, such as references to ''bookmakers'', ''totalisator odds'' and the Tote itself. The amendment will also maintain the current equitable treatment for the administration of pool betting on horse and greyhound racing by mandating those activities liable to general betting duty. That will protect their current on-course duty exemption and will avoid burdening the Tote's successor with liabilities to both general betting duty and pool betting duty. On that basis, I commend the clause to the Committee.

Question put and agreed to.

Clause 15 ordered to stand part of the Bill.

Clause 16

Rates of gaming duty

Question proposed, That the clause stand part of the Bill.

John Healey: Simply put, the clause increases the duty bands for gaming duty in line with inflation, ensuring that their value is maintained. It is a measure

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that continues the practice of the last six Budgets. It is supported by the casino industry and is designed to prevent a tax increase being caused by the erosion in the value of duty bands by inflation. I commend the clause to the Committee.

Mr. Bacon: The table in clause 16 will replace the table in section 11(2) in the Finance Act 1997. The figures in the bands in table of the 1997 Act amount to a total of £5.4 million, and anything over that is taxed at 33.3 per cent. The amounts stated in the table in the clause add up to £4.817 million, and anything above that level is taxed at 40 per cent. I would like the Economic Secretary to clarify for the record the fact that, in comparison with the 1997 Act, the clause sets out a higher rate of tax.

Mr. Jack: When the Economic Secretary replies, I would be grateful if he confirmed the measure of inflation that is used for the process of revalorisation.

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Sitting suspended for a Division in the House.

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On resuming—

John Healey: Let me respond to the two points made respectively by the hon. Member for South Norfolk and the right hon. Member for Fylde.

The hon. Member for South Norfolk asked me to confirm that the clause makes no tax increase.

Mr. Bacon: I am sorry to intervene so soon, but I did not ask the Economic Secretary to confirm that there was no tax increase. I asked him to confirm that the clause makes a tax increase when compared with the Finance Act 1997.

John Healey: If the hon. Gentleman will be a little patient, I shall answer his question. I had not even finished summarising the proposition that he put to me.

The 1997 Act was the first point at which the bands were set out in their present form. There was an increase in duties in 1998, but there is no change in the rates this year; instead there is a revalorisation of the bands to which those rates relate. I hope that that answers whatever question the hon. Gentleman thought he had asked.

I turn to the question asked by the right hon. Member for Fylde. The measure of inflation was the retail prices index. The figure for inflation was 2.8 per cent. That was the rate in December 2003, a figure taken by convention under an agreement with the industry that has been in place for five or six years.

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