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Mr. Bone: I do not speak from the Front Bench—and probably never will—and my hon. Friend the Member for Hammersmith and Fulham (Mr. Hands) spoke with
8 July 2009 : Column 1039
great clarity on this subject. I just want to talk about the situation of that small family club in Rushden. The owner makes the point:

He wants to keep the club open because, if it closes, he

It is that social element that I do not think that the Government have addressed at all. They must think again.

The owner goes on to say:

Tonight I will do everything I can to block it.

Mr. Don Foster: In many ways, this is an excellent continuation of the debate that we had on 13 May. Indeed, we have heard some of the old favourites—the excellent introduction by the hon. Member for Dundee, East (Stewart Hosie) and the passionate speech by the hon. Member for Barnsley, Central (Mr. Illsley). There has also been some welcome new blood in the debate—not least the right hon. Member for Suffolk, Coastal (Mr. Gummer), who, I suspect, will be bitterly disappointed by those on his Front Bench in a few minutes when we come to vote.

Two things have been a common theme in the debate this evening. First, there is total incomprehension among people on both sides of the House of what the Government are proposing to do about bingo. Not a single person so far has spoken in support of what they advocate, whereas there has been a great deal of support for the variety of amendments before us. Secondly, it has come across loud and clear that not only do people oppose what the Government are doing but there is genuine passion for recognising the importance of bingo clubs in our communities and supporting them. Everyone who has spoken has shown understanding of the importance of what the roughly 600 bingo clubs provide in our communities. They provide much-loved entertainment—largely, as my hon. Friend the Member for Taunton (Mr. Browne), who spoke from our Front Bench, has pointed out, for women, older people and people who are less well off. As we have all said, it is crucial to try to maintain that soft form of gambling so that we do not drive people into much harder forms.

The other thing that has come out in the debate is the fact that there is some surprise at the Government’s incompetence as regards getting the figures right. Let us look, as many have done already, at page 153 of the Red Book. It is very clear what the Government think will happen. There is the very welcome removal of VAT on participation—incidentally, may I be the only one to pay tribute today to the Government for helping bingo by increasing the number of machines that clubs can have? However, that removal of VAT, the Government
8 July 2009 : Column 1040
claim, will save the industry £50 million in the first year rising to £60 million in 2011-12. The bingo industry will then lose, through the increase in bingo duty, from 15 to 22 per cent. Many people have pointed out that those figures are meant to be an estimate; frankly, they are total fantasy. We know what is happening as a result of the Government’s loss at the EU tribunal in respect of duty on interval bingo, gaming bingo and so on. Many of the companies are not paying that duty. The Government’s figures are way out of order.

We have not yet had an answer to the question that the hon. Member for Hammersmith and Fulham (Mr. Hands) asked the Minister about whether the Government have taken account of irrecoverable VAT, but on the assumption that they have not, which I suspect is the case, that is a further example of the figures being way out of line.

The Government have done something that is incomprehensible because it will cause further damage to the bingo industry. Thirty clubs have closed in the past year, and more than twice as many since 2007. Only last week Gala, one of the major companies, announced that a further five clubs would close, and it explained to the Treasury that that was largely because of the taxation issue. No one can understand why the Government are doing something that could be so damaging to something so loved by people in our communities.

The right hon. Member for Suffolk, Coastal, among others, made it clear that there is another matter about which there is total incomprehension. Why have the Government failed to grasp the nettle of dealing with the different issues raised by the various forms of gambling in this country? Soft forms of gambling like bingo lead to very little addiction, but the harder forms like online gambling lead to high levels of addiction. Why can we not have a differential taxation policy, with a lower rate for soft forms of gambling and a higher one for the harder forms?

My hon. Friend the Member for Taunton was wrong about one thing. He said that online bingo was taxed at 15 per cent., but the truth is that it is rarely taxed at all, because the vast bulk of it is run through offshore websites that pay no tax in this country. Even if they are subject to European Economic Area regulation, or whitelisting, they do not contribute to the process. They certainly do not make any contribution, as they should, to the costs of research, education and treatment.

We need a differential tax regime. We certainly should not put the tax up to 22 per cent.; it should stay at 15 per cent. As the protesters in Trafalgar square and Westminster said recently, “One and five, keep bingo alive!”

Sarah McCarthy-Fry: 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.
8 July 2009 : Column 1041
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.

8 July 2009 : Column 1042
5 pm

Stewart Hosie: We have had a good debate again. We should have these bingo debates more often. They seem to engender real information and real passion from real Members from real communities, which is always a good thing.

The hon. Member for Barnsley, Central (Mr. Illsley) delivered another excellent defence of bingo clubs and communities, and an excoriating critique of the Government’s assessment of the proposed tax changes. The right hon. Member for Suffolk, Coastal (Mr. Gummer) deduced that the Government have a new doctrine—to tax the poor to help the rich. The hon. Member for Stockton, South (Ms Taylor) made a gentle and thoughtful speech, and rightly made the case that the Government should think again.

The hon. Member for Hammersmith and Fulham (Mr. Hands) was right to say that there was no justification for a 22 per cent. tax on bingo. He knows that the Government’s VAT assessment is flawed. We have just heard the weakest defence of it from the Minister in her summing up. The hon. Member for Hammersmith and Fulham knows that it is likely that the Revenue was never entitled to levy the tax in the first place, he knows that it takes cognisance, wrongly, of irrecoverable tax. He must not be conned by the Government’s attempt to obfuscate. It will be shameful if the Conservative Front-Bench spokesman refuses to back one of the amendments today, when the only person supporting him is the Government Whip. That is how bad the Tory Front-Bench position has become.

The hon. Member for Taunton (Mr. Browne) drew attention to the sheer staggering ineptitude of the Government in not seeing the trouble coming down the track. He was right. He also said with some sympathy that the Minister had been given an impossible hand to play. The hon. Member for Wellingborough (Mr. Bone) spoke about the Flutters bingo club in Rushden. I feel as though I have been in it; the description was so intense and detailed. I am delighted that he said that he would support the amendment. The hon. Member for Bath (Mr. Foster) was right to say that not one speaker backed the Government in the debate, either today or on 13 May, and he expressed total incomprehension of the Government’s actions.

The Minister said that the effective tax rate for bingo had fallen. I am not convinced. Even if that is true, I am convinced that it leaves a profound unfairness—22 per cent. as opposed to 15 per cent. across the board. The only question is whether I should ask that we delay this for a year, or whether we should stick to the principle of fairness in the entire gaming sector. I think we must stick with the principle. I hope the Tories will find some principle in the next two minutes, and I seek leave to press amendment 4 to a Division.

Question put, That the amendment be made.

The House divided: Ayes 83, Noes 283.
Division No. 195]
[5.3 pm


Beith, rh Sir Alan
Bone, Mr. Peter
Brake, Tom
Breed, Mr. Colin
Brooke, Annette
Browne, Mr. Jeremy
Burstow, Mr. Paul
Burt, Lorely
Cable, Dr. Vincent
Campbell, Mr. Ronnie

Carmichael, Mr. Alistair
Conway, Derek
Corbyn, Jeremy
Cormack, Sir Patrick
Cummings, John
Davey, Mr. Edward
Davies, Mr. Dai
Drew, Mr. David
Farron, Tim
Featherstone, Lynne
Field, rh Mr. Frank
Foster, Mr. Don
George, Andrew
Godsiff, Mr. Roger
Gummer, rh Mr. John
Hall, Patrick
Harris, Dr. Evan
Harvey, Nick
Heath, Mr. David
Hemming, John
Hoey, Kate
Hollobone, Mr. Philip
Holmes, Paul
Hopkins, Kelvin
Horwood, Martin
Hosie, Stewart
Howarth, David
Hughes, Simon
Hunter, Mark
Illsley, Mr. Eric
Jones, Lynne
Keetch, Mr. Paul
Kennedy, rh Mr. Charles
Kramer, Susan
Laws, Mr. David
Leech, Mr. John
Llwyd, Mr. Elfyn
MacNeil, Mr. Angus
McDonnell, John
Moore, Mr. Michael
Mulholland, Greg
Murphy, Mr. Denis
Öpik, Lembit
Pelling, Mr. Andrew
Price, Adam
Pugh, Dr. John
Reid, Mr. Alan
Rennie, Willie
Robertson, Angus
Rogerson, Dan
Rowen, Paul
Russell, Bob
Sanders, Mr. Adrian
Short, rh Clare
Simpson, Alan
Smith, Sir Robert
Spink, Bob
Stunell, Andrew
Swinson, Jo
Taylor, Ms Dari
Taylor, David
Taylor, Dr. Richard
Teather, Sarah
Thurso, John
Timpson, Mr. Edward
Wareing, Mr. Robert N.
Webb, Steve
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willott, Jenny
Wright, Mr. Anthony
Tellers for the Ayes:

John Mason and
Mr. Mike Weir

Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Anderson, Mr. David
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Balls, rh Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel
Blizzard, Mr. Bob
Borrow, Mr. David S.
Bradshaw, rh Mr. Ben
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, rh Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, rh Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Gregory
Caton, Mr. Martin
Challen, Colin
Chapman, Ben
Clark, Paul
Clarke, rh Mr. Tom
Clwyd, rh Ann
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cooper, Rosie
Cooper, rh Yvette
Cousins, Jim
Crausby, Mr. David
Creagh, Mary

Cruddas, Jon
Cryer, Mrs. Ann
Cunningham, Mr. Jim
Cunningham, Tony
David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Quentin
Dean, Mrs. Janet
Denham, rh Mr. John
Dhanda, Mr. Parmjit
Dobbin, Jim
Dobson, rh Frank
Dodds, Mr. Nigel
Donaldson, rh Mr. Jeffrey M.
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Eagle, Angela
Eagle, Maria
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Etherington, Bill
Farrelly, Paul
Fisher, Mark
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, rh Caroline
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gilroy, Linda
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Mr. Mike
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hanson, rh Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, rh John
Henderson, Mr. Doug
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hodgson, Mrs. Sharon
Hoon, rh Mr. Geoffrey
Howarth, rh Mr. George
Howells, rh Dr. Kim
Humble, Mrs. Joan
Iddon, Dr. Brian
Ingram, rh Mr. Adam
Irranca-Davies, Huw
Jackson, Glenda
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Mr. Martyn
Jowell, rh Tessa
Joyce, Mr. Eric
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, rh Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, rh Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Lucas, Ian
Mackinlay, Andrew
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCrea, Dr. William
McDonagh, Siobhain
McDonnell, Dr. Alasdair
McFadden, rh Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McGuire, rh Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNulty, rh Mr. Tony
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Miller, Andrew
Moffat, Anne
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Morden, Jessica
Morgan, Julie
Morley, rh Mr. Elliot
Mudie, Mr. George
Munn, Meg
Murphy, rh Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Hara, Mr. Edward
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Pope, Mr. Greg

Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Reid, rh John
Robertson, John
Robinson, Mr. Geoffrey
Robinson, Mrs. Iris
Robinson, rh Mr. Peter
Rooney, Mr. Terry
Roy, Mr. Frank
Roy, Lindsay
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, rh Joan
Sarwar, Mr. Mohammad
Sharma, Mr. Virendra
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vaz, rh Keith
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Ward, Claire
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, rh Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, rh Mr. Michael
Wilson, Phil
Wilson, Sammy
Winnick, Mr. David
Winterton, rh Ms Rosie
Wood, Mike
Woodward, rh Mr. Shaun
Woolas, Mr. Phil
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Noes:

Steve McCabe and
Lyn Brown
Question accordingly negatived .
8 July 2009 : Column 1043

8 July 2009 : Column 1044

8 July 2009 : Column 1045

Clause 25

Agreements to forgo tax reliefs

Mr. Mark Hoban (Fareham) (Con): I beg to move amendment 31, in page 15, line 40, leave out from ‘unless’ to end of line 9 on page 16 and insert

‘they have been made in accordance with section 257 of the Banking Act 2009’.

After the excitement of bingo we move to clause 25, which is less exciting but more important for revenue raising. [Interruption.]

Mr. Deputy Speaker (Sir Michael Lord): Order. Will hon. Members not staying for this debate leave the Chamber quickly and quietly?

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