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Mr. Laws: We, too, broadly welcome the thrust of the Government's reforms in relation to GPT. I should like briefly to press the Minister on one issue, which, as the hon. Member for Eddisbury mentioned, came out of the debate on bingo. Without going off the topic—the right hon. Member for Fylde mentioned this earlier—I should like to discuss the consistency of Column Number: 026 Government taxation across certain areas. When we discussed bingo, we were disappointed that the Economic Secretary was unwilling to be open about the Treasury's approach to the taxation of different forms of gambling. Can he reassure us that the Treasury seeks neutrality between different forms of gaming, betting and gambling?Most economists assume that Treasury policy is based on neutrality. In other words, one assumes that the Treasury is aiming to get to a point at which there is no incentive—this touches on clause 7, but I do not want to anticipate that argument—to choose one form of betting or gaming over another given how the different forms are taxed. Earlier, the Economic Secretary seemed to indicate that there was no Government policy to align and neutralise the taxation of different forms of gambling, which was surprising and disappointing. Referring two days ago to the implications of offshore activity and the potential evasion of tax, he sensibly said that that was an area in which an argument could be made for not having a neutral tax structure. However, when pressed, he was not willing to indicate that there was a more general Government commitment to tax neutrality in respect of betting and gaming. Can the Economic Secretary tell us more about the Government's intentions regarding tax neutrality between different forms of betting and gaming? Is it the Government's broad approach to seek to achieve neutrality? Finally, is he willing to publish an assessment of the tax burden on different forms of betting and gaming so that we can assess whether neutrality has been achieved?
10.30 amJohn Healey: The hon. Member for Yeovil raises the same points that he raised earlier. I entirely respect your judgments and decisions, Sir Nicholas, but his comments go much wider than the clause with which we are dealing. When the hon. Gentleman put those points to me earlier, it was not that I was unwilling to explain the Government's position on tax neutrality but that my approach was different from his. I explained that the Government's approach to the reform of gambling and gaming taxation was a consistent one, not an equalising one. The reason for that is simple. We are dealing with an outdated, over-complex and over-burdensome taxation system for gambling and gaming. We have applied consistent principles to the reforms that we propose and those that we have already put in place: they are to remove some of the costs and complexity of compliance, to improve the prospects for growth in those industries and to produce a better deal for those who participate—the punters or players. However, although the principles and approach are the same, the circumstances of the different gambling and gaming industries are different. When we were considering reform of the betting system—some of my hon. Friends are more expert on this than I am—we were faced with a UK industry that was increasingly moving offshore and on to the internet. We were faced with totally different circumstances when dealing with Column Number: 027 the reform of bingo, on which the hon. Gentleman pressed me earlier.To avoid doubt and at the risk of repeating myself, the approach that we take to reform and the principles underlying it are consistent, but it is not the Government's policy purpose to have an equalised approach across the gaming regimes. Mr. Laws: Will the Economic Secretary give way? John Healey: No, I have dealt with the point. Let me turn to the question of the hon. Member for Eddisbury about how carry-forward losses would work. It might help if I first give an example and then deal with the carry-back question. If in a four-month period a bookmaker made a loss of £5,000 in one month and a profit of £10,000 in each of three months, he would pay tax of £4,500, or 18 per cent. of gross profits, if he could not carry forward the loss, rather than £3,750, or 15 per cent. of gross profits. The following accounting period is the one after the loss-making accounting period, so there is no carry-back provision in the clause. It is small bookmakers and financial spread betters who are at greatest risk from losses during accounting periods and who are most likely to benefit from the clause. Mr. O'Brien: The Economic Secretary will realise that I raised the point not as a criticism, but as a matter for clarification. Professionals who advise various clients, large and small, raised it. The question has drawn an answer on the record, and I dare say that he is aware that it may be something on which many professionals rely when clarifying the position. John Healey: I hope that the hon. Gentleman does not feel that I was trying to be anything other than helpful by giving him the clarification that he wants. It may be that professional advisers have put those questions to him. As I understand it, they were not raised by the industry during the work that we have done in framing the reform. Were we to look at a carry-back provision, it would add some complexity of compliance to the system, which would have to borne in mind. I welcome the hon. Gentleman's recognition of the success of the reforms to betting taxation that we have made. He is right to say that customers have to be central to that process. Through those reforms we have given customers and punters what he might call a fair deal. On that basis, I hope that the Committee will approve the clause. Question put and agreed to. Clause 6 ordered to stand part of the Bill.
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