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We are disappointed by the commercial decisions of a number of major UK bookmakers earlier this year to move their internet betting operations offshore for tax
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purposes. However, it would be self-defeating to engage in a race to the bottom in tax rates with low-tax jurisdictions. We believe that the UK continues to offer one of the most competitive business tax regimes of any major economy, while also having a highly skilled work force, world-class infrastructure, and the internationalism and openness that make us a leading international base for business. I assure the hon. Gentleman that I will continue to engage with the industry as I conduct my regular stakeholder consultations.

When we introduced remote gaming duty in 2007, we looked closely at the options for taxing offshore operators on the basis of place of consumption. However, we concluded that it would be difficult to ensure compliance with any such regime without co-ordinated international agreement. We believe that that remains the case today.

As I have said, we need to keep the offshoring of gambling firms under close review. Indeed, the issue of offshore and remote gambling goes far beyond taxation. The Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), who has responsibility for sport, announced that he would conduct a review of remote gambling legislation in the UK and report to Parliament before the end of this year. The review will explore ways to make the system of gambling regulation in Britain fairer, to ensure a more level playing field between British businesses and their overseas counterparts. The review will rightly be led by the Department for Culture, Media and Sport, but my officials will be in regular contact with representatives from DCMS throughout. As I have said, the Treasury will continue to look carefully at the issues from a tax perspective.

Some hon. Members-they include my hon. Friend the Member for Luton, North (Kelvin Hopkins), but no hon. Member who has spoken this evening-have suggested that the tax regime for gambling should explicitly reflect some measure of problem gambling, either directly, on the basis of harm, or on the basis of risk of harm. That has never been the Government's policy on gambling tax. However, we take problem gambling extremely seriously. The regulation of the gambling industry is, of course, the responsibility of DCMS. Although for the majority of people gambling is an entertaining pastime that does not present any problems, there are a significant number for whom it is anything but.

The Government fully recognise that. It should be reiterated that the protection of children and the vulnerable from the potential harm of problem gambling remains central to our approach to gambling regulation. For example, through operating licences, the Gambling Commission licenses and regulates all those who offer gaming to the general public. Further protections for consumers are secured in the Gambling Commission's licensing conditions and code of practice, which include specific provisions on issues such as under-age gambling and problem gambling, through requirements relating to supervision, access, staff training and self-exclusion.

Philip Davies: Does the Minister accept that the gambling industry makes a voluntary contribution of £5 million a year to the Responsibility in Gambling Trust? That is unlike the behaviour of any other industry. ASDA, which I used to work for, sells creams cakes, which no doubt lead to obesity. However, as far as I
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know, ASDA does not give any money towards tackling obesity. The gambling industry does more in that way than any other industry like it.

Sarah McCarthy-Fry: We certainly recognise and value the gambling industry's contribution from that £5 million, which helps with the protection that the hon. Gentleman has talked about.

When considering gambling tax rates, we take all factors into account, including problem gambling considerations, as well as the impact of taxation on individual gambling sectors and the state of the public finances. Although an important consideration, any assessment of the risk of problem gambling is only one of many considerations that must be taken before decisions are taken on tax.

In conclusion, it is clear that the gambling industry faces a challenging and changing environment. It must react to the smoking ban and the implementation of the 2005 Act, as well as the wider trends of structural change across the leisure sector, including the increasing use of the internet and remote communications, particularly by young people. In addition, the industry will have to
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manage any issues exacerbated by the current economic climate, as all sectors of the economy must. As I have said, we remain committed to clear, open engagement with the industry, and will continue to keep all gambling tax regimes under review.

Philip Davies: When the Minister looks into the taxation of gambling, will she also commit to taking into account the concerns of many operators about the increased level of fees charged by the Gambling Commission?

Sarah McCarthy-Fry: That is obviously a matter for regulation, but, as I have said, we have to work closely with DCMS when we are setting tax policy, and we have to take those regulatory items into account.

I hope that the gambling industry will continue to engage with us in the same helpful and professional manner that I have become accustomed to since I took on this responsibility.

Question put and agreed to.

6.30 pm

House adjourned.


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