Is there a Treasury mission to weaken the Prime Minister?

Posted On: 
9th August 2017

The Campaign for Fairer Gambling writes that a recent Daily Mail story on fixed odds betting terminals (FOBTs) provides grounds to question the Chancellor, Philip Hammond.

"The Treasury must understand that FOBTs are a cause of harm to the economy as whole, as substantiated by Landman Economics and reported by The Times, even without adding the social costs of FOBT addiction" - The Campaign for Fairer Gambling
Credit: 
PA

Former Chancellor George Osborne did his best to advance libertarian capitalism and destroy social cohesion by screwing employees under the guise of austerity. He knew that imposing a requirement to pay an Employment Tribunal Fee of up to £1,200 would deter claimants.

Of course, it was an immoral and unethical cutback of worker rights, to people who might be Labour voters, to help protect corporate interests and capital assets of potential Tory donors. After some time, the Supreme Court has now determined the measure was also illegal.

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Mr Osborne also blocked a review into FOBTs when he was Chancellor. Now, according to the Daily Mail, Chancellor Philip Hammond is also trying to prevent DCMS from doing the right thing - reducing FOBT maximum stakes to £2 per spin.

As soon as Tom Watson responded for Labour, Tracey Crouch at DCMS tweeted that this was “fake news”. Regardless, the Treasury has spent too much time listening to the bookies and those lobbying on their behalf. It agreed that betting shops should be excluded from money-laundering (ML) regulations, despite the Gambling Commission regarding them as high-risk.

The Treasury claims that betting shops are “proven low-risk” as staff will be trained to have adequate controls in place based on representations from the bookies’ trade body the ABB, despite staff often working alone. But the bookies have a track record of misleading representations.

As the Gambling Commission advised (in point 9) the ABB Responsible Gambling Code adds virtually nothing new that the bookies should not have already been doing to comply with the conditions of their license. On top of that, the bookies’ remote sites are being investigated by the CMA for breaches of Consumer Protection Law. This is despite their Remote Gambling Association (RGA) supporting a Gambling Industry Code for Socially Responsible Advertising since 2007. The bookie-funded self-regulator, the Senet group, never finds anything wrong with bookie ads, but was itself found in breach by the ASA.

Expectations are that the RGA and the Senet Group will be trying to cobble together more political spin to make-believe that everything will be better in 2018, after the CMA decisions due in December 2017.

The Treasury must understand that FOBTs are a cause of harm to the economy as whole, as substantiated by Landman Economics and reported by The Times, even without adding the social costs of FOBT addiction. Furthermore, the Landman Economics analysis shows that FOBTs are not a net contributor to higher tax revenues.

If taxes are the priority, the Chancellor could easily raise taxes on the remote gambling sector. These predators went offshore to avoid UK taxes and are still fighting against the 2014 UK point-of-consumption tax. With this tax at only 15% and bricks-and-mortar casinos taxed at up to 50%, there is no justification for this discrepancy.

There is currently a proposal to tax free plays, but it would be far better to eliminate them altogether as they are part of the problem that the CMA is looking into and to increase the remote gambling tax rate to 50%.

One added twist is the rumour that the story was a government leak to the Daily Mail to gauge reaction. Over a few days the story was picked up by The Times, the Daily Record, the Racing Post, local news outlets, social media, Labour and the Lib Dems. A strong reaction.

The Treasury might have thought that because their refusal to include bookies in the ML regulations got minor attention that a pushback on FOBT controls might go un-noticed. If so, it’s time for the Chancellor to think again.

The ML regulations avoided Parliamentary scrutiny as the Statutory Instrument rule of a three-week period was constricted based on the excuse of the General Election. It is certain that Treasury will face questions on both ML and FOBTs after the recess.

Theresa May still wants to deliver her agenda of supporting those “just about managing” and protecting society against abusive corporate interests. If the Chancellor is actually behind the story, whether it is real or a “test the water” leak, is this an attempt to weaken the Prime Minister?