Gambling (Licensing and Advertising) Bill

Debate between Robert Syms and Philip Davies

Tuesday 5th November 2013 Commons Chamber

[Philip Davies]

The hon. Gentleman is absolutely right. I intend to talk about taxation more widely a little later, because it plays a crucial role.

My understanding—I am sure that the Minister will correct me if I am wrong—is that the Bill is all about regulation because that is what is needed to satisfy the European Union and make it fit within its rules. Were the Government to admit that it is all about taxation, the European Union would be all over it like a rash and would rule that it is illegal because it interferes with tax competition and will upset other parts of the EU. That is why the Government have been desperately trying to pretend that the Bill is all about regulation, even though we know that it is not.

I am sure we all agree with what the Chancellor said in his Budget statement—I certainly do—but I am not entirely sure that it was particularly helpful to the Government more widely or to the Minister in this instance. The Chancellor talked about protecting jobs here, and I am sure that he had in mind the company that the hon. Member for Newcastle-under-Lyme represents, bet365. It should be commended not only for ensuring that it protects all the jobs in his area, but for the commitment it gives to the area more generally, because it sponsors the local football club and is involved in the local community. We should all congratulate bet365 on what it has done.

However, as my hon. Friend the Member for Maldon made clear, bet365’s representatives told the Select Committee in evidence that the company would be under pressure to leave if the current situation continued for much longer. Furthermore, they said that it was only really here because it was a privately owned company. They conceded that it would almost certainly have had to go offshore if it was a public limited company. The fact that it is a private company is what has allowed it to stay. Therefore, I do not necessarily think that we should criticise those that have gone offshore, because it was an inevitable consequence of the tax system and it would be naive to think otherwise.

I would prefer to try to allow bet365 to stay here, which of course we want, but it would be nice if our ambitions were a little grander. I would like to see some of the companies that are already offshore return to the UK, which is why the tax rate is so important. If we introduce a 15% tax rate, there is no chance of any of those firms returning. I encourage the Minister to encourage her Treasury colleagues to indulge in some negotiations with the betting companies to see what agreement can be reached, because I would much prefer us to set a tax rate that enabled them to come back or to bring back some of their operations. That would also mean an awful lot of jobs coming back here. That would be a much more sensible way forward, rather than seeing it as an immediate cash cow.

[Mr Syms]

Is not there a broader issue? Sometimes the Government take firms based in the UK for granted, which means the gambling and casino industries paying substantial sums in tax, and we must ensure that they are competitive as well.

[Philip Davies]

My hon. Friend is absolutely right.

I want to touch on the levy, because a number of Members have suggested that we should be compelling companies that are currently offshore to pay it, just as onshore companies have to. I think that argument is a bit of a red herring. There is a perfectly clear and respectable argument for those offshore to pay the same as those onshore, including the levy, but I do not think that it would make a fat lot of difference to the money raised from the levy going from bookmakers to racing. I am delighted that an agreement has been reached between racing and bookmakers, but in my view, and that of others, including the hon. Member for Bradford South, who are better qualified than me to decide whether what I am saying is right, it seems that Ministers decide at the start how much the gambling industry should contribute towards racing—perhaps arriving at a figure of around £75 million—and then come up with a mechanism on the levy to deliver that.

If offshore companies are included in the levy, my suspicion is that exactly the same thing will take place. The Minister will think that £75 million is about right and will then change the mechanism so that it delivers that amount. Those people in racing who think that that is a way to get an awful lot more money from the betting industry are simply misguided, although I can see why they think it. It would not generate any more money; it would just change the formula by which these things are calculated.

--- Later in debate ---

[Philip Davies]

My hon. Friend is absolutely right. He undersells how much he knows about this subject; he is far more of an expert than me. When the Select Committee took evidence on gambling during a visit to Brussels, where we met European Union regulators and others in Europe, it was clear that levels of illegal gambling in countries with much greater restrictions than ours were far higher. We can predict what happens if the restrictions imposed are too onerous, because we have seen it in other countries. People go on to illegal sites. As my hon. Friend the Chairman of the Select Committee explained, the efforts made to try to stop people doing that are not particularly successful, as they can be got round. If the focus is on closing down internet sites, they will immediately reopen elsewhere. If it is on blocking credit card payments, people will use PayPal and other methods to get round those restrictions too. It is a pointless exercise. People who want to get round these restrictions will do so. Other countries have proved that, because they have tried them all and they have all spectacularly failed. Nothing will change in this regard, because the Bill is not really about regulation but taxation.

I am concerned about the impact with regard to the Gambling Commission, which, like all quangos and bureaucracies, likes nothing more than a bit of empire building. I suspect that it has seen the Bill and thought, “My goodness me, all our Christmases have come at once!” Whereas before it has had to accept the licensing and regulation from the white list countries, and accept the companies that are considered to be good enough, it can now get its teeth into every single one of them. It can go jetting around the world checking out whether all these individual companies should be a given a licence. Lord knows how many extra people it will need in order to satisfy itself that those companies are fit and proper to advertise their wares in the UK and get themselves an appropriate licence. This Bill is a bureaucrat’s dream. I would be interested to hear what steps are being taken to stop any empire building by the Gambling Commission, because I am sure that would be an unintended consequence of the Bill, allowing a huge bureaucracy to grow on the back of it.

I do not know what the great problem was with the white list. During our Select Committee hearings, I was scrabbling around trying to think of examples of problems. Only one sprang to mind, which was a notorious case where the legendary gambler Barney Curley pulled off a huge coup one day when he had four horses running at different meetings around the country; I think one was somebody else’s that he used to train. The first three won and the last one, fortunately for the bookmakers, lost, but with three out of four winners he still reportedly ended up making a profit on his bets of some £10 million. He was paid out by all the British bookmakers, but the regulator in Gibraltar, I think, allowed the bookmakers based there not to pay him out, which led to a huge dispute over a long period. I think I am right in saying that the situation was eventually resolved and they paid him out.

That is the only case I can recall where the regulation in one jurisdiction was fundamentally different from that in another and the returns to the punter were materially affected. Nobody who came to the Committee ventured that particular example—I ventured it—so they did not seem to be acutely bothered about it. I am not sure, therefore, what was wrong with the old regime.

[Mr Syms]

My hon. Friend makes a very good point. The Gambling Commission already charges high fees on the domestically based industry. Is there not a risk not only that it will chase revenue from remote firms, but that it may have to put up the fees for the whole industry, including those that are already paying their taxes?