SMF draft shows director questioned machine tax jobs claim

The Social Market Foundation faces uncomfortable questions after a draft of its flagship report appeared online with senior staff's internal remarks still visible. Guido Fawkes, the Westminster gossip site founded by blogger Paul Staines, put the draft out on Tuesday and said it had gone up by accident with the comments attached. The timing is poor for the think tank: the Chancellor, John Healey, sets out his Budget on Wednesday 28 October, when an increase in MGD is broadly anticipated. iGB had received no reply from the SMF when the story was published.

Addressing the harm, which came out in June, proposes doubling the duty on Category B machines from 20% to 40%, a change it estimates would bring in between £275million and £458 million annually. In one margin note, SMF director Theo Bertram questioned the basis for confidence that displaced workers would find jobs elsewhere. Chief economist Gideon Salutin answered, per the draft, that no guarantee existed for any individual, though national employment would rise, and he felt the wording was right. Bertram also cautioned against overstating causality on crime; Salutin said the causal link was “unclear, so I’ve changed it to correlation.” The chief economist further conceded that bingo halls and seaside arcades would be affected, while rejecting concerns about black market displacement.

The published report contains the same wording on closures and job losses that Guido highlights from the draft, and its final text says machines correlate with gambling-related crime. The report as released already accepts that closures may cost sector jobs, so the draft reveals a causal claim being toned down, not a concession that there was no evidence. What the leaked comments do show is claims being questioned and rephrased; they do not show any numbers being fabricated.

The dispute unfolds as the sector prepares for a second Budget hit in a row, following April's increase of Remote Gaming Duty to 40%. According to the BGC, as many as 3,800 casino jobs could be lost under a 40% MGD rate, and Regulus Partners modelling indicates roughly 1,500 betting shops might shut straight away. The British Horseracing Authority estimates racing could lose £92 million annually. Healey is reported to be considering 25% instead of 40%.