The chancellor, Philip Hammond, will be branded “morally reprehensible” by MPs who accuse him of propping up government finances with gambling addicts’ losses by delaying curbs on £100-per-spin fixed-odds betting terminals (FOBTs).
MPs including Hammond’s former cabinet colleague Iain Duncan Smith will say on Wednesday they are astounded by reports that the Treasury struck a deal with bookmakers to postpone a new £2 maximum FOBT stake until 2020.
The letter, seen by the Guardian, criticises the Treasury for prioritising the duty collected from the machines, worth more than £600m a year, over problem gambling.
“On the losses from taxation revenue: firstly it is morally reprehensible that the government is propping up its finances through taking revenue from FOBTs,” said members of the cross-party group on FOBTs, led by Labour’s Carolyn Harris.
They pointed out that the Treasury already expects to make up any tax shortfall by increasing duty on online gambling from April 2019.
“It is not therefore justifiable to continue to gain revenue from FOBTs for a further year when an alternative revenue stream will have been put in place,” says the letter, which is understood to have the support of more than 30 MPs and members of the House of Lords.
The Treasury claims bookmakers need time to make changes to the machines, but industry sources have told the Guardian it would take just weeks to adjust FOBT software.
Members of the group are preparing an early-day motion calling for Hammond to scrap the bookies’ grace period, during which time gamblers will lose an estimated £4bn on FOBTs.
Stockbroker Goodbody has estimated that the Treasury would lose £194m from FOBT stake cuts, but only if players don’t switch to other forms of taxed gambling.
The MPs urged Hammond to agree to a meeting with campaigners including “a group of people whose lives have been, and continue to be, irreparably damaged by FOBTs”.
Bookmakers, who collect £1.8bn a year from FOBTs, have previously said FOBT restrictions would cost thousands of jobs as high street shops are forced to close.
A report by the Centre for Economic and Business Research (Cebr) has said the impact is likely to be much smaller.
A Treasury spokesperson said: “We are changing the rules so they balance the needs of vulnerable people, those who gamble responsibly and people who work in this sector.
“But we must get this right, and are engaging with the industry to ensure it has sufficient time to implement these technological changes.”
