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Finance Bill

The amendment seeks to introduce fair taxation for bingo, in the light of the increase in bingo duty from 15 to 22 per cent. For the gaming or gambling industry, that means that whereas online bingo, casino and poker, online sports betting, sports betting in a betting shop, football pools and betting exchanges are all taxed at 15 per cent., licensed bingo clubs, almost uniquely, are taxed at 22 per cent. I say "almost uniquely" because casino gaming duty is levied on a sliding scale between 15 and 50 per cent., but I will return to that subject later. As many hon. Members will know—although there are almost no Members here on the Labour Benches, apart from the long-suffering Minister and a Whip—there has been an ongoing campaign for fair taxation on bingo, in order to remove the double taxation of VAT and bingo duty. What at first glance appeared to be a success, with the removal of VAT, now seems to have been merely a sleight of hand by the Government. With one hand they have given, by removing VAT, but as the industry claims—and I believe that the numbers stand up—they have taken away a great deal more by raising bingo duty to 22 per cent. As I understand it, the Government claim that the changes will benefit the industry to the tune of some £15 million a year. My argument is that that calculation is rather flawed. That flaw is rooted in the Treasury's shortcoming in being unable to identify the VAT charged on games of bingo. As I understand it, the net effect of the changes is that Mecca Bingo alone, which represents about one third of the sector by value, will pay an extra £6 million a year to the Exchequer, with about £18 million paid across the whole industry. That is in the context of a sector that last year made an operating profit of £41.8 million. It would be instructive to take a look at the background to the changes proposed in the Budget and the Finance Bill. In May 2008 the VAT and duties tribunal ruled that the application of VAT to interval bingo in Mecca bingo clubs was in breach of the EU principle of fiscal neutrality, which states that similar services should be taxed equally. As a consequence, Mecca Bingo and other bingo operators ceased to pay VAT on interval bingo. The benefit of the VAT abolition therefore applies only to main-stage bingo, which represents only about one third of all bingo by value. The increase in bingo duty affects all bingo, whereas the reduction in VAT benefited only one third of the revenue.