HC Deb 16 July 1969 vol 787 cc722-52
Mr. Deputy Speaker

The next Amendment is No. 6, plus the Amendment to it in the name of the hon. Member for North Fylde (Mr. Clegg)—in line 3, at end insert: 'and provided that "a penny machine" shall be capable of having more than one slot through which a penny can be placed to operate such machine'.

Mr. Harold Lever

I beg to move Amendment No. 6, in page 8, line 28, at end insert: 'and that Schedule: and for those purposes a "penny machine" is a gaming machine which, in order to be played once, requires the insertion of a single penny and which cannot be played in any other way'. The effect of these Government Amendments is to create a new category of gaming machine licences to be known as holiday season licences. Holiday season licences will be valid from 1st March to 31st October in any year. They will be available only for premises covered—

Sir Stephen McAdden (Southend, East)

On a point of order. I think that the Financial Secretary is dealing with the wrong Amendment.

Mr. Lever

I hope that I have not confused matters; I am on the right Amendment; the hon. Gentleman is mistaken.

The effect of these Government Amendments is to create a new category of gaming machine licences to be known as holiday season licences.

Sir S. McAdden

On a point of order. You, Mr. Deputy Speaker, called the Financial Secretary to move Amendment No. 6, which deals with the definition of a penny machine, not with holiday licences. I have no objection to the right hon. Gentleman discussing gaming machine licences, but I do not think that he is dealing with the Amendment you called him to move.

Mr. Deputy Speaker

The hon. Gentleman's impression coincides with mine.

Mr. Lever

I am referring to Amendments Nos. 6 to 9, 13 to 23 and 93 to 106. This is the group of Government Amendments of which No. 6 is the first. We must take them all together in order to understand them.

Mr. Patrick Jenkin

On a point of order. Perhaps the Financial Secretary was not present yesterday when we encountered this difficulty. The Government spokesman, when moving the first Amendment, announced that it was the first of a series of Amendments. We on this side of the House have had no intimation that all these Amendments were to be grouped together. We are not prepared at this stage to agree to that. We should like the Amendments to be taken separately. If a number of Amendments are to be taken together, we should be grateful if we had advance notice.

Mr. Lever

If it is the wish of the House, I shall deal with the Amendments separately.

Amendment No. 6 introduces a definition of a penny machine. The definition is restricted to those machines which can be played once on the insertion of a penny piece. It does not apply to machines made playable on the insertion of a token's worth of a penny or machines which offer three goes for a sixpenny piece or three goes for 6d. It is strictly limited to the definition of a penny machine.

Mr. Deputy Speaker

I understood that the objection of the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) was not to the Amendments being taken as a group but to the fact that prior notice was not given.

Mr. Patrick Jenkin

On a point of order. There is a point of substance here. The selection which Mr. Speaker was good enough to make indicated on a number of occasions when two Government Amendments were to be taken together. We would not insist on a change in the usual procedure if two or three Amendments obviously hang together, but when the Government intend to dot about in the Amendment Paper and deal with several Amendments of substance together I should be grateful if we could have notice.

9.15 p.m.

Mr. Lever

I did not realise that notice had not been given to the other side, and I must apologise for it.

Mr. Rees-Davies

I know that my hon. Friend the Member for North Fylde (Mr. Clegg) would have wished to move as an Amendment to the proposed Amendment No. 6, in line 3, at end insert: 'and provided that "a penny machine" shall be capable of having more than one slot through which a penny can be placed to operate such machine'. I bring it to the attention of the House so that the Financial Secretary may have an opportunity to deal with the case of the penny operated machine which can be used with a number of slots—usually, I think, four or five.

Mr. Arthur Lewis

I understand that the penny coin is to be done away with very shortly. Will my right hon. Friend explain what will happen when we do not have the penny? Will the definition then have to be redefined, or will it cover the position as it will be in six months' or 12 months' time, or whatever the period may be when these machines are operated by coins other than those called pennies?

Mr. Lever

This definition will stand as long as the penny remains. When pennies go the definition on the Statute Book will not have much relevance.

Amendment agreed to.

Mr. Harold Lever

I beg to move Amendment No. 7, in page 8, line 29, leave out from beginning to 'licence' in line 37 and insert: (3) A gamine machine licence shall be either—

  1. (a) an ordinary licence, being—
    1. (i) a whole-year licence for the period from 1st October in any year to 30th September in the following year, or
    2. (ii) a half-year licence for the period from 1st October in any year to 31st March in the following year or from 1st April in any year to 30th September in that year; or
  2. (b) a holiday season licence (for penny machines only) for the period from 1st March in any year to 31st October in that year,
(all dates inclusive); and where a licence of either description is granted so as to have effect for the remainder of a licence period which has partly expired, the charge to duty shall be unaffected by the circumstance that a licence of the other description has been in force in respect of the same premises for any part of that period. (4) The duty on an ordinary.

Mr. Deputy Speaker (Mr. Sydney Irving)

With this Amendment we may take the following:

Amendment No. 194, in page 8, leave out lines 30 to 36 and insert:

  1. (a) a licence for any period of twelve months running from the beginning of the month in which the licence first has effect;
  2. (bs) a licence for any period of four months running from the beginning of the month in which the licence first has effect; or
  3. (c) in the case of any such premises as are mentioned in section 27(3)(a), (b) and (c) of the Gaming Act, 1968, a licence for any period of seven consecutive days.

Amendment No. 195, in page 10, leave out lines 16 to 18 and insert: (7)(a) The duty on a licence for a period of four months shall be eleven-thirtieths of that which it would have been if the licence were a whole year, but otherwise identical, licence; (b) the duty on a licence for a period of seven days shall be one fifty-second of that which it would have been if the licence were a whole year, but otherwise identical, licence plus ten per cent. of that amount.

Mr. Lever

The Amendment affects the distinction between ordinary licences, the licences dealt with in the Clause as drafted, and holiday season licences. It provides that holiday season licences apply to the penny operated machines only, and it sets their period of validity as being from 1st March to 31st October inclusive. It also provides that if a holiday season licence is exchanged for a unexpired ordinary licence, or vice versa, the duty on the new licence is unaffected by the fact that duty has been paid on the superseded licence.

I do not know whether I can usefully illumine that by pointing out that the effect of these Amendments as they go along is to provide a new category of gaming machine licences to be known as holiday season licences which will be valid from 1st March to 31st October in any year. They will be available only for premises covered by local authority permits under the social law, and where the gaming machines are penny operated machines. The duty on holiday season licences will be £15 for each penny operated machine, and the first holiday season licences will be issued for a period beginning on 1st March, 1970.

The Amendments also exempt from gaming machine licence duty to October, 1969, premises which satisfy the conditions relating to holiday season licences. Gaming machine licences dealt with in the Clause as drafted are unaffected, except that they become known as ordinary licences. Ordinary licences will continue to be available for those not wanting holiday season licences, or for holiday season licence holders who want to operate outside the holiday season. The effect is to get these licences for penny operated machines from 1st March to 31st October at £15 a year, which is very much less than the proportionate charge.

This is an attempt to give effect to the wish of both sides of the Committee to distinguish between Seaford and Soho, or the seaside and Soho. This will provide a very cheap rate for penny operated machines for people who need them only in the holiday season from March to October, but will leave the original rate still in force for those who use them all the year round.

If it is felt by those who have to pay the whole-year duty that these people are being unfairly treated with great indulgence by us the answer is that although these holiday people have an eight-month licence they will be very lucky if they are able to use them for eight months in the year. My reasoning in making this reduction was that very often these people will be able to use the eight-month licence only for a few weeks in the year, owing to the inclement and, to some extent, unreliable character of the British weather at the times when the British holiday makers take their holidays.

Mr. John Hall (Wycombe)

Has the Financial Secretary considered the average earnings made by these machines in the summer?

Mr. Lever

That varies a great deal, but we have a great deal of evidence. I went into this matter with great care. When the duty was fixed at £15 for the holiday season licence I think I erred on the side of generosity in my recommendations to the Chancellor rather than on the side of severity. Instead of £75 they will pay a mere £15 for eight months of the season. I am satisfied that this is an effective reduction which will help even the less fortunately placed operators. It is no good giving a series of figures in relation to the take of these machines. It varies greatly from one place to another. Having studied in great detail what the takings were as returns for tax and other evidence showed, I recommended the reduction which my right hon. Friend accepted. I think this takes care in a generous way of the wishes expressed by hon. Members on both sides of the Committee.

Mr. Rees-Davies

On a point of order, which I think is quite important. This Amendment deals only with the period of licence, not with quantum or the time which arise on Amendments Nos. 10 and 15. This is a very narrow Amendment dealing with the introduction of holiday season licences and the appropriate period for which there is a reduction. I mention that because the Financial Secretary appeared to go rather wider.

Mr. Speaker

I am grateful to anyone who narrows a debate. With this Amendment we are discussing Amendments Nos. 194 and 195. The House might like to be reminded that this is the third or fourth of 40 debates we are to have during two days on Report.

Sir S. McAdden

In moving Amendments Nos. 194 and 195, I start by saying how much I appreciate—

Mr. Speaker

The hon. Member is not moving those Amendments but may speak to them.

Sir S. McAdden

I start by saying how much I appreciate the care and thought which the Financial Secretary has given to representations made to him on this narrow question of validity of the licence. I shall not be tempted into the realms of disorder into which the Financial Secretary sought to lead me by dealing with the amount of duty paid on these machines. I will confine myself strictly to the period of the validity of the licence. Because the Financial Secretary was courteous and generous in listening to complaints made to him, it is all the more regrettable that I had to interrupt his preliminary remarks. It is important that we should keep to the narrow point of the period of validity.

The right hon. Gentleman has made a substantial concession. The Amendment extends from six months to eight months the period during which a licence may be held by a holiday season amusement arcade proprietor. Later I hope to have the pleasure of catching your eye, Mr. Speaker, and of speaking at a little more length—but not much—on the problems of seaside proprietors. Now I urge on the Financial Secretary the importance of considering giving some kind of relief to other kinds of operators as well. In this connection I am trying to help the Treasury to get some money. It so happens that unless the Treasury provides some opportunity for people to get licences for a shorter period than six months it may conceivably lose a great deal of revenue. Some of the machines involved in this operation cost several thousands of £s and considerable sums in purchase tax have been paid in respect of them. They will become unusable if they are compelled to be used for the whole period of one year or even for six months. Amendments Nos. 194 and 195 seek to create fresh periods ranging from four months down to seven days. I have no doubt that to the Customs and Excise the suggestion of a period of seven days for a licence comes as a great shock, but some organisations and clubs run a function once a year—for instance, a carnival—when a seven-day licence would be of great value.

Despite the administrative difficulties, the extent of which I concede, if the Treasury could see its way to creating opportunities for a seven-day licence and a quarterly licence based upon the proportions of the licence fee set out in Amendments Nos. 194 and 195 it would at least get some revenue where otherwise it would get none and it would give relief to some organisations which would greatly welcome it.

Mr. John Farr (Harborough)

I thank the Financial Secretary for the arrangements he has made consequent upon representations he received from both sides. I am grateful to him for reducing the special licence fee for 1d. machines to £15. I thank him for his sincerity and sympathy and for studying the case which was put to him. I hope he can assure me that, if it should transpire that this licence fee of £15 a year, which seems little enough, but which takes a great deal of getting from ld. a time machines, is working unfairly or harshly on some 1d. machine operators, we can come to him next year and present any fresh statistical evidence that we have gained as a result of a season's working.

Mr. Harold Lever

I thank the hon. Member for Harborough (Mr. Farr) for his attitude. We will keep in touch with this matter. I had discussions with the associations most affected before coming to the conclusion about the £15. I have a feeling that they are surprised as well as happy at the level at which I have been able to recommend this duty. I think that we have met them on this matter. It is impracticable to take instalments weekly or monthly. Much as I would like to help in that way, it would place an impossible burden on the Customs and Excise.

Amendment agreed to.

Further Amendments made: No. 8, in page 9, line 7, at end insert: 'for the purposes of an ordinary licence'.

No. 9, in line 20, leave out 'a' and insert an ordinary'.—[Mr. Harold Lever.]

Mr. Rees-Davies

I beg to move Amendment No. 10, in page 9, line 33, leave out 'one' and insert every'.

Mr. Speaker

With this Amendment the House can discuss also the following

(8) A holiday season licence shall be granted only for premises as to which the Commissioners are satisfied that they will, on the date on which the licence is first in force, have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of Schedule 11 to this Act; and—
(a) the licence shall be one which authorises the provision only of penny machines up to a number specified in the licence; and
(b) the duty on the licence shall be £15 multiplied by that number.

Also the sub-amendment: (w), in line 5, leave out from beginning to end of line 7 and insert:

  1. (a) the licence shall be one which provides that not more than one-third of the machines authorised by the licence shall be machines other than penny machines;
  2. (b) the duty on all penny machines authorised by the licences shall be £15 each;

And (x), in line 7, leave out '£15' and insert'£f12–10–0'.

9.30 p.m.

Mr. Rees-Davies

The effect of that arrangement, Mr. Speaker, is that we can deal in one general debate with the position of the amusement trade on the Amendments which cover the amount of tax on the machines, leaving outstanding only one issue on Clause 5, namely, that raised by Amendment No. 16, which deals with multi-player machines. I mention that so that those hon. Members who have come into the debate will understand what the position is. There is a separate narrow issue dealing with multi-

Amendments: No. 11, in page 9, leave out lines 35 to 37.

No. 12, in page 9, line 40, leave out'£150' and insert £75

As the hon. Member for the Isle of Thanet (Mr. Rees-Davies) reminded us, this Amendment is narrow in its own field as the other was in the previous field.

Mr. Rees-Davies

On a point of order. It might be for the convenience of the House and probably also for the convenience of the Financial Secretary if we traverse also the ground covered by Amendment No. 50. Amendments Nos. 10, 11 and 12 deal with a straight tax of £12 10s. The Government, after these Amendments had been tabled, tabled Amendments to reduce the amount to £15 in respect of a holiday season licence. So all the Amendments go together.

Mr. Speaker

This makes perfect sense to me, if there is no objecion from the Government. So we will take also Amendment No. 15, in page 10, line 18, at end insert:

player machines arising on Amendment No. 16. The debates can in that way be channelled into a fairly narrow compass. The present question is, so to speak, the main question.

Our Amendment would provide that all 1d. machines should pay a flat-rate tax of £12 10s. Following a deputation with which I saw the Financial Secretary, the right hon. Gentleman posed what seemed to be a fair question. The Government wished to hit this trade as hard as if it were carrying a tax similar to the tax on whisky, that is to say, to the maximum amount without at the same time leading to the law of diminishing returns. Therefor, there came the difficult question of deciding what would be the sum which would extract the last drop from the trade without sending it into bankruptcy. The figure we came up with was £12 10s. for all 1d. and 3d machines in the country, leaving the other machines, the 6d. machines, to bear the high impost demanded of them by the Government.

Why did the Government go so hopelessly wrong in grossly overtaxing this trade? That they did so is evident from Amendment No. 15, the holiday season licence at £41 5s., and the new rate of £15. True, they have taken two steps for which they deserve to be congratulated. First, they have introduced the holiday season licence which will assist seasonal areas and seaside resorts and do something to enable a number of operators to continue in business, although many will still go into liquidation. Second, they are to be congratulated—or the Financial Secretary is to be congratulated—on listening to the argument and not merely introducing the holiday season licence but bringing the figure down to £15.

I advance several points to support my figure of £12 10s. These points must be beyond dispute. First, in this trade, unlike others, there is no expansion of custom, no question of increasing turnover. Second, with a machine or amusement with prizes there is a fixed figure which is not passed to the customer. It must be borne by the operator. It follows from that that the tax is entirely met by the operator. Next, the operating overheads amount to about 50 per cent. of the takings.

Next, in a seaside arcade—the "Dreamlands" and other places in which amusements with prizes are available—there are many machines which are really no more than furniture. Out of the total number of machines some are used heavily and others scarcely at all. To tax them all at the same rate would be unfair. Therefore, in considering whether every machine should be taxed at a flat rate of £12 10s., one takes into account that some machines are what is known in the trade as mere furniture. It will be difficult to get rid of them, and I have taken that into account in assessing the figure.

Next, there will be a heavy loss of capital on discarded machines. There is a constant turnover of investment capital. What the Treasury forgets is that in many cases it is dealing with machines which are novelties, lasting for a mere year or two. The capital involved is very great. The machines cost from £200 to £2,000.

It must also be borne in mind that purchase tax of 36⅔ per cent. is paid on all these machines, and, perhaps more important, that if we reduce the overall number the Treasury will lose not only the purchase tax but the income tax and corporation tax, and the revenue to the local authority from the seaside piers will also be lost. All these points must be borne in mind in considering the appropriate level of taxation.

In certain holiday camps and selected seaside resorts, a number of arcades and operators of renown have a captive audience. Butlins is one example, with a large captive audience. The figures we supplied to the Treasury came from its concession agreements, together with those of the British Automatic Company and others, so that the Treasury could see the highest figures which could be attained, where there is a substantial, steady audience. The profits are higher there.

What will be the effect if the tax is not reduced to the best effective level, which we say is no more than £12 10s. for the penny machines? First, there will be the ruin of the rapidly building export trade. Second, there will be the loss of the present import-saving.

The purchase tax paid by the two main companies exceeded £2 million last year. Those companies were Bell Fruit and Automatic Coin Equipment. The foreign currency saving by Bell Fruit alone as a result of the reduced imports of American, Australian and Japanese machines was more than £4 million in the past 18 months, and in the case of Automatic Coin Equipment the original estimates for exports in 1969 are over £6 million.

In 1968 Phonographic exported £315,000-worth of machines, and Automatic Coin Equipment more than £250,000-worth. Those figures have not been appreciated by the Treasury. They were not available to it at the time it introduced these measures. Why was not there consultation with the trade in 1968 or this year before the Budget, as there was in 1966 when the Government announced before the Budget that they would impose certain duty? The result has been that the Treasury has imposed hopelessly unrealistic rates of tax on the industry, which will mean many companies going into liquidation.

The danger is considerable in the case of the Crompton factory in my constituency. I have grave doubts as to whether it will be able to continue the export of machines and the import-saving it has developed.

I have pointed to the general criteria which should have been taken into account but have not. There are many such factors to which I could refer, in addition to those I have mentioned. I want briefly to give only one or two examples which I think will appeal to the House. At 15, Marine Terrace, Margate, there is a small operator. He has 90 machines at 1d. If he obtains a holiday season licence, under Amendment No. 15 that means paying £1,350. He has 11 machines at 6d., which means paying £1,650. Therefore, on the Government Amendment the tax he would have to pay is a minimum tax of £3,000 for the coming year.

If he were to get an ordinary licence—and we believe that this should be carried through for the 1d. machines—he would have to pay £6,750 for 90 such machines. But he can operate only on a holiday season licence. Even by paying £3,000, this man's gross takings, according to a chartered accountant, are £4,325. After deducting overheads and when he has paid his taxes, he will be unable to operate even under the Government Amendment. That is why I said that, when we provided for £12 10s. right the way through, we were working to the largest possible figure based on the same sort of inequities we have had to suffer from the whisky tax.

Mr. Russell Kerr (Feltham)

Does it not occur to the hon. Gentleman that perhaps this man is operating an uneconomically large number of machines?

Mr. Rees-Davies

It is not large. An establishment with 90 machines at 1d. and 10 at 6d. is rather small. In the main, these places are bigger. Most of the concessionaires operate a great many more. It is the small operator with 90 or 100 machines who is going to go into liquidation. The big companies operate over 20 to 25 sites located all over the country. Some pay very well and others do not, but the companies can afford to carry from the profits of their best what I would call losses on the others.

Unfortunately, the figures show that there are 450 to 500 sites in the seaside resorts. These are figures which the Government have not obtained but which are available to the trade associations. They show that three-quarters of these 450 to 500 are site operators with not more than one or two sites. It is these people who are going into liquidation. It is the small man who will go into liquidation and the big man who will survive.

I give the example of Butlin's camp at Ayr, with 30,000 campers a year and, therefore, a captive audience. It has 550 Id. machines which, at 15.s., gives £7,725; the 30 machines at 6d. give £2,500 and the tax which will be borne is £10,000 a year on the new Government Amendment. The net profit to the concessionaire in that case—Mr. Peter Manning—is only £9,000, so that the tax to be paid will still be higher than the whole of the net profit. It will mean that Butlin's will have to cut down the charge they make to the concessionaire and there will be little profit in it for either of them.

Let not the Government think they are being generous with their Amendment. It is an endeavour to proceed along the right lines. It will assist with the holiday season licences for penny machines, but it will still mean the end of the others. No concession is given—as in the case of Amendment No. 10, which would reduce the level from £150 to £75—for 3d. machines. It still mean; that we shall see, over the next year, the liquidation of many small companies with subsequent loss of purchase tax, corporation tax and exports—and all this could have been a saving if only the Government had properly consulted the industry before they came forward with their Budget.

9.45 p.m.

Mr. Norman Miscampbell (Blackpool, North)

I appreciate that the time of the House is short and I intend to be brief. I wish to make one general observation and one particular observation on the Amendment. I support the Amendment because I should like to see the lowest possible rate of taxation upon these machines. In no sense can 1d. machines in arcades and in seaside resorts be described as hard gambling, or as gambling machines of any description. I find it incredible that they should be subject to any form of taxation. If there is to be taxation, then this Amendment reducing the tax to £12 10s. is to be welcomed.

My particular point is this. Most arcades have a variety of machines, 1d., 2d., or 3d. machines. As I understand the position—and I should be grateful for correction if I am wrong—a person can have as many ld. machines as he likes, but if he has one or two 2d. or 3d. machines among them he will not be entitled to the concession which is later to be made of £15 for all of them. I see the Financial Secretary is nodding his head.

If that is the position, those who operate small arcades will inevitably find that they have expensive machines which take 2d. or 3d., and, if they are to get the concession, they will have to scrap these most expensive machines. This is neither in the interest of the Government nor in the interest of the industry.

I deplore the tax that has been imposed upon these small machines for the reasons which I have given. I can see no reason for applying a tax on gambling to these machines, and I should like to have an assurance that consideration will be given to making sure that where there are mixed arcades the whole arcade will not be taxed as it is under the present provisions, but that the machines will be taxed independently.

Sir S. McAdden

I recognise that this is a considerable reduction on the original fee proposed of £75 per machine. That shows how ridiculous was the original proposal and how out of touch with reality were those who proposed it. The proposal to reduce the tax to £15, while acceptable, should not preclude us from arguing that it is still a bit unrealistic.

I do not want to bore the House with mental arithmetic, but £15 in pennies is 3,600 pennies, so to collect in the machine the £15 licence fee it is necessary to have 3,600 pennies going into the machine, but that is not the end of the story. People will not keep on putting pennies into the machine unless they get something out. The Gaming Board is hoping to introduce legislation to make it obligatory for 85 per cent. of what goes in to come out in prizes.

It is not just a matter of 3,600 pennies going into a machine. About 24,000 pennies must go into each machine before the operator can achieve the £15 he needs to be able to pay the licence fee. He then has to pay his overheads. A sum as large as about 24,000 pennies is equal to 400 5s. bags of copper—a tea-chest full of coppers. It takes a long while to get all those coppers together.

The Treasury may feel that it is being generous, but it is certainly putting a heavy burden on amusement arcade operators in the country who have no other means of livelihood than their amusement arcades and rely upon people visiting them. I am grateful for what the Treasury has done, but amusement arcade operators still carry a severe load.

My hon. Friend the Member for Blackpool, North (Mr. Miscampbell) referred to the people who within the law have purchased expensive machines to take 3d. and 6d. and who are now to be prevented from using them because of the prohibitive licence fee they will have to pay if they wish to continue using them. They cannot even sell the machines because nobody will buy them.

Will not the Treasury have another look at this matter? They started off well. They have come down from £75, which was absurd, to £15, which is becoming reasonable. Why not give operators the other £2 10s.? If the Treasury will be happy and accept the Amendment, I will be happy, too.

Dame Irene Ward (Tynemouth)

This is a rather new subject for me to speak upon. I am not acquainted with all the mathematical calculations of these machines. But when I see the figures relating to amusement arcades put to me by the local authorities in my area, I wonder whether this is not also a new subject for the Financial Secretary. Although I rarely win a battle with the Fnancial Secretary—we all think that he is pretty good at argument, and it is difficult to get on top of him—I would point out that a concession is no concession at all if it does not keep people in business. It is so near and yet so far away from filling the bill.

I cannot understand how anybody as expert as the Financial Secretary could ever have permitted himself to impose taxation on some of these small people who make a great contribution to the seaside resorts. The duty that he is imposing is much more than the gross takings. I know that I must not pursue this subject, but I now know why our whole financial position is in such a muddle. I cannot believe that this duty was based on the Financial Secretary's own calculations because he is too clever to have made such a mistake. It must be the mistake of those who advise him.

He has certainly never consulted me about this matter. I am a good representative of my own seaside resorts, and I could have told him all about the seaside resorts on the North-East Coast, about our record, our high level of unemployment and the need to attract tourists. We want every penny we can get out of the Government. If he had asked me what would happen as a result of this ridiculous level of taxation, I gladly would have given him an answer.

A well known seaside resort in my constituency is Whitley Bay. Through its town clerk, the urban district council tells me that this duty will have a devastating effect on that little seaside resort which already has to cope with many difficulties which I need not recapitulate. It is tremendously important for the Government to give better reliefs to business people in such places in order to help keep them in business. In the North, we always hear that people do not come to our seaside resorts because of the climate. This Government think that they are very grand, but even they cannot alter the climate. However, they can help support the attractions of our resorts.

I propose to quote one or two figures, although I am sure that the Financial Secretary will tell me that I have them wrong and have not taken account of concessions which the Government have already given. He is probably right, because I find it very difficult to follow them. In my constituency, there are the two resorts of Tynemouth and Whitley Bay, but the same argument applies to the whole of Northumberland and even to places in Scotland which will be knocked out by this unendurable imposition.

In the case of the amusement arcade in Tynemouth, the duty required will be £9,550. However, last year's gross takings were only £3,027. If the taxation of the rest of the country is based on that kind of assessment, it is no wonder that we are going down the drain. It is idiotic for people to be asked to pay what it is quite outside their capacity to pay.

In Whitley Bay, there are some pleasure gardens which are greatly enjoyed by everyone. In the gardens, there are three sites containing 1d. amusement machines. The total rental payable to Whitley Bay Pleasure Gardens for the 1968 half-year was £1,600. The duty on the machines would amount to £21,500. The gross takings from the three arcades last year amounted to £6,750.

Very often in this House, I feel like Alice in Wonderland while this Government are in control. Faced with this ridiculous tax I feel like the Cheshire Cat. Alice in Wonderland, the White Rabbit, the Dormouse, the Mad Hatter and everyone else at once. I cannot make sense of the Government's proposal. After all, these small places are struggling to make a profit and to create something of a seaside atmosphere in an effort to attract tourists.

I am sure that the Financial Secretary does not work on the basis of being taxed more than he earns. When taxation is imposed, surely it should be at a level which is within the capacity of people to pay. I know that the Treasury is very keen on analyses. It would be interesting to see a statistical return showing how many other undertakings are taxed more than their gross earnings.

We are told that we cannot have the Prime Minister visit us. Speaking for myself, I would prefer to have the Financial Secretary come instead. I would be delighted to take him round our amusement arcades and let him see for himself the difficulties that they face. In any event, I hope that when he has heard all our pleas he will have some sympathy.

10.0 p.m.

Mr. Harold Lever

I can think of few things more delightful than to accept the suggestion of the hon. Member for Tyne-mouth (Dame Irene Ward) for a conducted tour of the Whitley Bay and ancillary Tyneside and Northumberland arcades. But I should like to assure the hon. Lady that I had the same approach to the matter that she has displayed in her speech. I was concerned not to place upon these seaside operators an intolerable burden which they could not possibly survive in all cases. I consulted with experts in those areas, namely, the operators and their associations. I am quite satisfied, despite the figures put forward by the hon. Lady, which may have been related to the old £75 duty, that seaside operators with 1d. operating machines, will be able to carry on their businesses and meet the tax on the new holiday season basis.

The predictions of ruin for them or for anybody else will prove, in the event, to be misplaced. We are not in the habit of imposing taxes for the fun of winding people up. We impose duties in the hope of getting them. Hon. Members who have experience of the Customs—and the Inland Revenue, for that matter—know that, in general, our duties are so tuned that we do not kill off the business from which the duty derives.

I have looked into the Amendments with great care, but I do not accept, as a matter of judgment and information, that any of the duties are too harsh or that the concession made for the holiday season proves that there is something wrong in the original rate of duty. The original rate of duty still remains at £75 on a 1d. machine when it is operated the whole year round. We had to do a little thinking before we got to a formula which could be justified and tailored to the needs of the seasonal holiday operators. That is why we get this exceptionally favourable rate which I have outlined.

I must ask the House to reject Amendments Nos. 10, 11 and 12. I hope that it will support the position taken by the Government. The House can rest assured that the ruin predicted from the rates of duty, as amended, will not eventuate.

Mr. Patrick Jerkin

I am sure that the House listened to the Financial Secretary with a growing sense of disillusionment. That he should be so insensitive to the figures quoted by many of my hon. Friends is, for him, surprising.

The right hon. Gentleman said that he has studied the figures. But he knows that, even with the massive reduction which the Government have made from the completely ludicrous figure that they were proposing to charge when the Bill was first introduced, it still represents a substantial slice of the average turnover of the machines at these seaside arcades. I have the impression that, before the Bill was introduced, officials of the Customs and Excise wandered round Soho, made a calculation of what goes into the machines in those exceptional arcades, and assumed that what would be appropriate there would be appropriate throughout the rest of the country.

I suppose that we must be grateful for small mercies. The Financial Secretary, having seen representatives of the industry, now realises that, whatever else was right, that was a nonsense. But he has not gone far enough. The case made by my hon. Friends, many representing seaside constituencies, was very strong. We are bitterly disappointed that the right hon. Gentleman has not felt able to meet it. I believe that we are entirely justified in pressing the Amendment to a Division. I hope that my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) will think it right to do that.

Question put, That the Amendment be made:—

The House divided: Ayes 172, Noes 246.

Godber, Rt. Hn. J. B. Maclean, Sir Fitzroy Rossi, Hugh (Hornsey)
Goodhart, Philip McMaster, Stanley Russell, Sir Ronald
Gower, Raymond Macmillan, Maurice (Farnham) Scott-Hopkins, James
Gresham Cooke, R. McNair-Wilson, Michael Sharples, Richard
Grieve, Percy Maddan, Martin Shaw, Michael (Sc'b'gh & Whitby)
Gurden, Harold Maginnis, John E. Silvester, Frederick
Hall, John (Wycombe) Marten, Neil Smith, Dudley (W'wick & L'mington)
Hall-Davis, A. G. F. Maude, Angus Smith, John (London & W'minster)
Harvey, Sir Arthur Vere Maxwell-Hyslop, R. J. Speed, Keith
Harvie Anderson, Miss Mills, Peter (Torrington) Stainton, Keith
Hawkins, Paul Mills, Stratton (Belfast, N.) Stodart, Anthony
Heald, Rt. Hn. Sir Lionel Miscampbell, Norman Stoddart-Scott, Col. Sir M.
Heseltine, Michael Mitchell, David (Basingstoke) Taylor, Sir Charles (Eastbourne)
Higgins, Terence L. Monro, Hector Taylor, Edward M. (G'gow, Cathcart)
Hiley, Joseph Montgomery, Fergus Taylor, Frank (Moss Side)
Hill, J. E. B. More, Jasper Temple, John M.
Hirst, Geoffrey Morgan, Geraint (Denbigh) Tilney, John
Holland, Philip Morgan-Giles, Rear-Adm. Turton, Rt. Hn. R. H.
Hordern, Peter Morrison, Charles (Devizes) van Straubenzee, W. R.
Hornby, Richard Mott-Radclyffe, Sir Charles Vaughan-Morgan, Rt. Hn. Sir John
Howell, David (Guildford) Munro-Lucas-Tooth, Sir Hugh Vickers, Dame Joan
Hunt, John Nabarro, Sir Gerald Waddington, David
Hutchison, Michael Clark Nott, John Walker, Peter (Worcester)
Iremonger, T. L. Onslow, Cranley Walker-Smith, Rt. Hn. Sir Derek
Jenkin, Patrick (Woodford) Osborne, Sir Cyril (Louth) Ward, Dame Irene
Jones, Arthur (Northants, S.) Page, Graham (Crosby) Weatherill, Bernard
Jopling, Michael Peel, John Wells, John (Maidstone)
Joseph, Rt. Hn. Sir Keith Percival, Ian Whitelaw, Rt. Hn. William
Kaberry, Sir Donald Pike, Miss Mervyn Wiggin, A. W.
Kershaw, Anthony Pink, R. Bonner Williams, Donald (Dudley)
Kimball, Marcus Pounder, Rafton Wilson, Geoffrey (Truro)
Kirk, Peter Powell, Rt. Hn. J. Enoch Wolrige-Gordon, Patrick
Kitson, Timothy Price, David (Eastleigh) Woodnutt, Mark
Knight, Mrs. Jill Prior, J. M. L. Worsley, Marcus
Lancaster, Col. C. G. Pym, Francis Wright, Esmond
Lane, David Ramsden, Rt. Hn. James
Legge-Bourke, Sir Harry Rees-Davies, W. R. TELLERS FOR THE AYES:
Longden, Gilbert Renton, Rt. Hn. Sir David Mr. Anthony Grant and
McAdden, Sir Stephen Ridley, Hn. Nicholas Mr. Anthony Royle.
MacArthur, Ian Ridsdale, Julian
Abse, Leo Cronin, John Forrester, John
Allaun, Frank (Salford, E.) Crosland, Rt. Hn. Anthony Fowler, Gerry
Alldritt, Walter Crossman, Rt. Hn. Richard Freeson, Reginald
Anderson, Donald Dalyell, Tam Galpern, Sir Myer
Archer, Peter Davidson, Arthur (Accrington) Gardner, Tony
Armstrong, Ernest Davidson, James (Aberdeenshire, W.) Gray, Dr. Hugh (Yarmouth)
Ashley, Jack Davies, Ednyfed Hudson (Conway) Gregory, Arnold
Atkins, Ronald (Preston, N.) Davies, G. Elfed (Rhondda, E.) Griffiths, David (Rother Valley)
Atkinson, Norman (Tottenham) Davies, Dr. Ernest (Stretford) Griffiths, Eddie (Brightside)
Barnett, Joel Davies, Rt. Hn. Harold (Leek) Griffiths, Will (Exchange)
Baxter, William Davies, Ifor (Gower) Hamilton, William (Fife, W.)
Beaney, Alan de Freitas, Rt. Hn. Sir Geoffrey Hannan, William
Bence, Cyril Delargy, Hugh Harper, Joseph
Benn, Rt. Hn. Anthony Wedgwood Dell, Edmund Harrison, Walter (Wakefield)
Bessell, Peter Dempsey, James Haseldine, Norman
Bidwell, Sydney Dewar, Donald Hazell, Bert
Binns, John Diamond, Rt. Hn. John Healey, Rt. Hn. Denis
Bishop, G. S. Dickens, James Heffer, Eric S.
Blackburn, F. Dobson, Ray Henig, Stanley
Blenkinsop, Arthur Doig, Peter Hobden, Dennis
Boardman, H. (Leigh) Driberg, Tom Hooley, Frank
Booth, Albert Dunn, James A. Houghton, Rt. Hn. Douglas
Boston, Terence Dunnett, Jack Howarth, Robert (Bolton, E.)
Boyden, James Dunwoody, Mrs. Gwyneth (Exeter) Howell, Denis (Small Heath)
Bradley, Tom Dunwoody, Dr. John (F'th & C'b'e) Hoy, Rt. Hn. James
Bray, Dr. Jeremy Eadie, Alex Hughes, Rt. Hn. Cledwyn (Anglesey)
Brooks, Edwin Edelman, Maurice Hughes, Hector (Aberdeen, N.)
Brown, Hugh D. (G'gow, Provan) Edwards, Robert (Bilston) Hughes, Roy (Newport)
Brown, Bob (N'c'tle-upon-Tyne, W.) Edwards, William (Merioneth) Hunter, Adam
Brown, R. W. (Shoreditch & F'bury) Ellis, John Irvine, Sir Arthur (Edge Hill)
Buchan, Norman English, Michael Jackson, Colin (B'h'se & Spenb'gh)
Buchanan, Richard (G'gow, Sp'burn) Ennals, David Jay, Rt. Hn. Douglas
Butler, Herbert (Hackney, C.) Ensor, David Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)
Callaghan, Rt. Hn. James Evans, Fred (Caerphilly) Jenkins, Rt. Hn. Roy (Stechford)
Carmichael, Neil Evans, Ioan L. (Birm'h'm, Yardley) Johnson, Carol (Lewisham, S.)
Carter-Jones, Lewis Finch, Harold Johnson, James (K'ston-on-Hull, W.)
Chapman, Donald Fitch, Alan (Wigan) Jones, Dan (Burnley)
Conlan, Bernard Fletcher, Ted (Darlington) Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Craddock, George (Bradford, S.) Foot, Michael (Ebbw Vale) Jones, J. Idwal (Wrexham)
Crawshaw, Richard Ford, Ben Jones, T. Alec (Rhondda, West)
Judd, Frank
Kenyon, Clifford Mitchell, R. C. (S'th'pton, Test) Ryan, John
Kerr, Mrs. Anne (R'ter & Chatham) Molloy, William Shaw, Arnold (Ilford, S.)
Kerr, Russell (Feltham) Moonman, Eric Sheldon, Robert
Lawler, Wallace Morgan, Elystan (Cardiganshire) Shore, Rt. Hn. Peter (Stepney)
Lawson, George Morris, Alfred (Wythenshawe) Short, Mrs. Renée (W'hampton, N.E.)
Leadbitter, Ted Morris, Charles R. (Openshaw) Silkin, Rt. Hn. John (Deptford)
Lee, Rt. Hn. Jennie (Cannock) Morris, John (Aberavon) Silkin, Hn. S. C. (Dulwich)
Lee, John (Reading) Moyle, Roland Silverman, Julius
Lever, Rt. Hn. Harold (Cheetham) Murray, Albert Skeffington, Arthur
Lewis, Arthur (W. Ham, N.) Newens, Stan Slater, Joseph
Lewis, Ron (Carlisle) Noel-Baker, Rt. Hn. Philip Small, William
Lipton, Marcus Oakes, Gordon Spriggs, Leslie
Loughlin, Charles O'Malley, Brian Steel, David (Roxburgh)
Lyon, Alexander W. (York) Oram, Albert E. Steele, Thomas (Dunbartonshire, W.)
Mabon, Dr. J. Dickson Summerskill, Hn. Dr. Shirley
McBride, Neil Orbach, Maurice Taverne, Dick
McCann, John Orme, Stanley Tinn, James
MacColl, James Oswald, Thomas Tuck, Raphael
Macdonald, A. H. Owen, Dr. David (Plymouth, S'tn) Urwin, T. W.
McGuire, Michael Owen, Will (Morpeth) Varley, Eric G.
McKay, Mrs. Margaret Page, Derek (King's Lynn) Wainwright, Richard (Colne Valley)
Mackenzie, Alasdair (Ross & Crom'ty) Palmer, Arthur Wallace, George
Mackenzie Gregor (Rutherglen) Park, Trevor Watkins, David (Consett)
Mackie, John Parker, John (Dagenham) Watkins, Tudor (Brecon & Radnor)
Mackintosh, John P. Parkyn, Brian (Bedford) Wellbeloved, James
Maclennan, Robert Pearson, Arthur (Pontypridd) Whitaker, Ben
McMillan, Tom (Glasgow, C.) Peart, Rt. Hn. Fred Whitlock, William
McNamara, J. Kevin Pentland, Norman Wilkins, W. A.
Mahon, Peter (Preston, S.) Perry, Ernest G. (Battersea, S.) Willey, Rt. Hn. Frederick
Mahon, Simon (Bootle) Perry, George H. (Nottingham, S.) Williams, Alan (Swansea, W.)
Mallalieu, E. L. (Brigg) Price, Christopher (Perry Barr) Williams, Alan Lee (Hornchurch)
Mallalieu, J. P. W. (Huddersfield, E.) Price, Thomas (Westhoughton) Williams, Clifford (Abertillery)
Manuel, Archie Price, William (Rugby) Williams, Mrs. Shirley, (Hitchin)
Mapp, Charles Probert, Arthur Willis, Rt. Hn. George
Marks, Kenneth Rankin, John Wilson, William (Coventry, S.)
Marquand, David Rees, Merlyn Winstanley, Dr. M. P.
Marsh, Rt. Hn. Richard Roberts, Albert (Normanton) Woodburn, Rt. Hn. A.
Mason, Rt. Hn. Roy Roberts, Rt. Hn. Goronwy Woof, Robert
Maxwell, Robert Roberts, Gwilym (Bedfordshire, S.) Wyatt, Woodrow
Mellish, Rt. Hn. Robert Rodgers, William (Stockton)
Mendelson, John Roebuck, Roy TELLERS FOR THE NOES:
Mikardo, Ian Rogers, George (Kensington, N.) Mr. J. D. Concannon and Mr. Charles Grey.
Miller, Dr. M. S. Rose, Paul
Milne, Edward (Blyth) Ross, Rt. Hn. William

Amendments made: No. 13, in page 10, line 16, leave out 'a' and insert 'an ordinary'.

No. 14, in line 17, leave out 'a' and insert an ordinary'.

No. 15, in line 18, at end insert: (8) A holiday season licence shall be granted only for premises as to which the Commissioners are satisfied that they will, on the date on which the licence is first in force, have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of Schedule 11 to this Act; and—

  1. (a) the licence shall be one which authorises the provision only of penny machines up to a number specified in the licence; and
  2. (b) the duty on the licence shall be £15 multiplied by that number.—[Mr. Harold Lever.]

10.15 p.m.

Mr. Harold Lever

I beg to move Amendment No. 16, in page 10, line 23, leave out from beginning to 'machine' and insert:

  1. (a) in the case of a penny machine, shall be treated for the purposes of a holiday season licence as a number of penny machines equal to the number of persons who can play the machine simultaneously;
  2. (b) in the case of a penny machine or any other.

Mr. Speaker

It will be convenient if we also discuss with this the sub-Amendment to Amendment No. 16, after 'to', in paragraph (a), insert `one quarter of'.

Mr. Lever

It will also be convenient if we take Government Amendments Nos. 17 and 18.

This Amendment deals with multiple penny machines and it makes consequential changes in the subsection dealing with multiple machines generally. For the purposes of the holiday season licence—[Interruption.]— multiple penny-play machines are treated as the number of penny machines equal to the number of playing positions.

Mr. Speaker

Order. Only one Member can be on his feet at once in the House.

Mr. Lever

For the purpose of a holiday season licence multiple penny play machines are treated as the number of penny play machines equal to the number of playing positions, while for the purpose of an ordinary licence they are treated as the number of "lower rate" machines equal to the number of playing positions.

Mr. Rees-Davies

I hope that the Minister will now take a little time to consider what he has to say about this, because it is of fundamental importance to the trade. It is the one remaining matter about which I have already seen him. We must have this explicit. The position is that the Government are asking the House to say with that where the penny machine is a multi-player, that is to say, a Derby racer or one of those machines upon which a great many people may be invited to participate, we shall multiply what is received by way of tax by the number of those persons who can play the machine simultaneously.

The Amendment we have proposed after considerable discussion with all those engaged in the trade suggests that it would be reasonable to apply a tax based on a ratio of one-quarter of the total positions for play. It would be one-quarter of the total number of positions for play.

Let me explain what this means. There were one or two misconceptions in Committee. May I tell the Financial Secretary that only four machines were ever made which could take 40 players? None of those is now in use, so that we can get rid of that. In Committee the right hon. Gentleman was saying, understandably, that he thought that if there could be 40 players in a place there must be a good measure of profit and he was no doubt thinking that there would be some expensive machines. I produced one or two, the Derby racer, the vintage car and others.

We have to get the full picture. At the seaside these are put in because they are extremely attractive. They are there largely so that people can move in and watch them. In most cases they have a small area for play. A Vintage Racer machine might have 15 official positions but the number of people playing at any one time is normally between four and six. Therefore, only a small proportion of machines which have 15 or 20 positions for play are operated at any one time. It is wholly inequitable to charge 20 times the amount merely because there are 20 position for play.

I illustrated the matter in this way. In this House there are a number of positions for play. There are not enough positions for 600 Members to play at one and the same time. The House of Commons is designed to give sympathetic consideration to the fact that when there are 100 to 150 Members present it looks full. The whole idea of this type of machine is to encourage this sense of ambience or fulfilment of many people standing around, but they are not playing. Therefore, we do not get the number of players which the machine prescribes.

I have had the opportunity to show the Financial Secretary some of the attractive drawings of vintage car machines. I shall refer briefly to one, namely, the vintage car race, similar to the Derby racer. It is a 20 player machine. It has a length of only 9 ft. 9 in. One would be far from cosy if more than 10 people were playing. The duty, if this proposal goes through, will be £300 per annum. The price is £2,780, and it has been estimated that more than one-third of the takings of the machine would go straight to the Government. Some figures which I have extracted from one company show that the takings on their machines, which they loan, were only £46 per machine.

As the figures are not generally known, the Government may like to have the number of multi-player machines with which they are substantially concerned. There are about 1,000 machines with an average of eight player positions per machine. The Government say that they want to take £120,000 tax on these multi-player machines alone. We say that £30,000 would be more than sufficient if the machines are to continue. They are entirely harmless. Children use them every day. They return tiny prizes. People put in their pennies purely as a harmless flutter for fun. Nobody thought that they would be taxed. If the tax is based on the number of players—15 or 20 players, £15 per player, about £300 tax—they will cease.

These machines are made in this country, which is an import saving. They are exported in large numbers. Purchase tax of 36⅔ per cent. is paid on them. Surely it is unwise to deprive the Government of the revenue and people of the pleasure of them. All that we have to do is to find the right multiple. We have suggested dividing by four. The Government must divide by something, otherwise they will divide their own revenue.

Dame Irene Ward

It would be helpful to have a definition by the Financial Secretary of what he means by "holiday seasons". Who is talking about holidays—

Mr. Speaker

Order. With respect, the hon. Lady is on the wrong Amendment. We have disposed of Amendment No. 15, and we are now discussing the tax on the multi-player machine.

Dame Irene Ward

The Financial Secretary talked about the holiday season multiple player, or whatever it is called, so I think that it would be helpful if he were to tell us for how long the multiple players are played. My part of the world has a much shorter holiday season for the operation of these machines than, perhaps, is the case in the constituency of my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). This provision could be even more unfair to a part of the world with a short holiday season than the one with a longer season. That being the case, perhaps we may know what we mean when we talk of the "holiday season".

Sir S. McAdden

It is very clear from the Government Amendment that the season about which my hon. Friend the Member for Tynemouth (Dame Irene Ward) asks is the period from 1st March to 31st October. Though that may not seem to be a holiday time, it is to that period that the provision refers.

I can understand the kind of thinking going on behind the Government's action. They say, "If we tax a machine with one slot at a rate of £15, the tax on a machine with 20 slots should be 20 times as much". That reasoning is based on the assumption that a machine of 20 slots will take 20 times as much money as will a machine with one slot only, but that, if I may say so without offence, shows a lamentable ignorance of what goes on in amusement arcades. It just is not true that the machine with 20 slots takes as much money as the machine with one slot. The machine operators would be delighted if it were so, but such is not the case.

Very largely, these are what are described as "flash" machines. They occupy a certain amount of space, and they attract people. A machine with 20 slots will often have no more than six to ten people playing at one time. That is why our Amendment is designed to reduce the Government's figure by some number or other. We do not say that ours is necessarily the right figure, but we certainly say that 100 per cent. tax on every single slot is not the right way to go about things. We therefore hope that the right hon. Gentleman will bend his mind to forming some different kind of judgment. If the proper tax is not one-quarter of that proposed, it might be one levied on half of the available position. At any rate, let us not tax these people on every playing position, because to do so is grossly unjust.

Mr. A. P. Costain (Folkestone and Hythe)

Our seaside resorts find some sort of wet weather entertainment necessary to encourage people to visit them, and these arcades make some contribution of that kind. Multi-slot machines give amusement to more people than those who play. They are an attraction and a useful adjunct. If the Chancellor of the Exchequer goes ahead with his present proposal these machines will not be viable, and will have to be removed. The figures involved are not very great, and I appeal to the right hon. Gentleman to see whether he cannot make some contribution to keeping the machines in operation.

Mr. Robert Cooke

I have seen a large number of these multi-slot machines in operation in holiday resorts and in my constituency. I have never seen all the slots in play at the same time.

Mr. Harold Lever

I am deeply indebted to the fund of experience contributed by different hon. Members to this debate. I am sure that it will be very helpful, although I must confess that the relation of the functions of the multi-provision machine to hon. Member's positions in the Chambers by the hon. Gentleman the Member for the Isle of Thanet (Mr. Rees-Davies) did not seem to be altogether compelling. At all events, he must explain it to me in greater detail outside the Chamber.

Mr. Robert Cooke

Only one slot works at once.

Mr. Lever

No fiscal arrangements of the players have yet been evolved by the Chancellor to keep the number of players to a practical minimum at appropriate times.

10.30 p.m.

I hope that the hon. Lady the Member for Tynemouth (Dame Irene Ward) is now satisfied with the holiday season definition.

Dame Irene Ward

I think it a silly one.

Mr. Lever

I can only try to please the hon. Lady and her constituents by making the holiday season cover a period from March to the end of October, which I thought would cover the whole range of Whitley Bay excitements and possibilities. If I have not gone far enough I regret it.

I say this reassuringly on the multi-player position. We are not imposing the duty on the number of penny slots but on the number of playing positions. I assure hon. Members that the Customs and Excise will look at machines literally individually to assess fairly what are the number of playing positions so that we get a realistic approximation in the duty paid to what the machine is expected to take.

Mr. Rees-Davies

The Department cannot do this horse-trading because the player positions are marked on the machines. Therefore presumably this will be tied to the number set out in the specification. This is the difficulty which Customs and Excise will find unless some criteria is laid down.

Mr. Lever

The hon. Member is underestimating the capabilities of the Customs. If positions are defined three inches apart, no 40 human beings could play. I am sure that the Customs will be able to decide the number of playing positions. That is more reasonable than having a hypothetical number of three, four or whatever is suggested. No one wants to tax these machines unfairly. They will be taxed on the number of playing positions, not the number of slots or necessarily on theoretical playing positions indicated by white lines. Each machine will be examined and assessed by the number of playing positions.

Mr. Rees-Davies

The right hon. Gentleman has not dealt with the other point. He recognises, I am sure, that not more than half the possible number will be playing at any one time simultaneously except in the rarest circumstances. It cannot be right to consider this on the number of possible players. That factor must be reduced.

Mr. Lever

That is true of all other machines. They are not in continuous operation all the time. They are intermittently employed and they are taxed at £15 for a holiday season licence even if used only intermittently.

Amendment agreed to.

Further Amendments made: No. 17, in page 10, line 26, after 'treated', insert: 'for the purposes of an ordinary licence'.

No. 18, in line 30, leave out from beginning to 'as' and insert: 'in a case not falling within paragraph (b) of this subsection, shall be treated for the purposes of an ordinary licence'.—[Mr. Harold Lever.]

Mr. Harold Lever

I beg to move Amendment No. 19, in line 39, at end insert: 'and for the temporary exemption of certain premises where only penny machines are provided'. This places a new provision in the Schedule exempting from gaming machines licence duty from October 1969 on premises which satisfy the conditions relating to holiday season licences.

Mr. Rees-Davies

Why not all the machines this year? It is to be October 1969. What are they to do in Blackpool and the Isle of Thanet throughout the month of October, 1969? What are they to do in the seaside resorts this year merely because the Government were so incompetent that they did not originally fix it at the end of October instead of at the beginning? Anybody who knows anything about the hotel industry must know that if a new tax is to be introduced it should not be done before the season is over. It is reasonable to say that the Government might have introduced this tax on 31st October instead of on 1st October. The Government are making a concession to the holiday season licence, but nobody will want a licence for one or two weeks in October. The occasional conference, with which the House is not infrequently concerned, takes place in some parts into the first few days of October.

I invite the Chancellor to do what Lord Butler, as he now is, used to do on these occasions—to go to the Box and say, "Surely we can make this concession". This should be started fair and square at the end of the season, at the end of October. It is not sufficient to apply this concession to some people only. Why cannot we wrap this paraphernalia up and start fair and square? It would help, not so much my constituency, but those in the North and elsewhere who have to bear in mind the position of continuing some sort of trade in October and who could not pay these heavy licence fees for a short period.

Mr. Harold Lever

I cannot grant this concession except to those enjoying the concession on the basis I have already outlined of the holiday licence.

Amendment agreed to.

Further Amendments made: No. 20, in page 11, line 4, leave out 'a gaming machine' and insert 'an ordinary'.

No. 21, in line 9, leave out 'and'.

No. 22, in line 10, leave out 'such a' and insert ' an ordinary'.—[Mr. Harold Lever.]

Mr. Harold Lever

I beg to move Amendment No. 23, in page 11, line 15, at end insert 'and (d) at any time when a holiday season licence is in force in respect of any such premises, gaming machines shall not be provided for gaming on those premises except penny machines up to the number specified in the licence'. This is to make the holiday season licence effective. It makes it an offence for gaming machines other than penny machines up to the number authorised by the licence to be provided for gaming on premises covered by a holiday season licence.

Amendment agreed to.

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