More than 70 MPs could force government to bring forward cut in maximum stake to April

This article is more than 1 year old

This article is more than 1 year old

Theresa May’s government faces becoming the first to suffer a defeat on its own budget bill in 40 years after Tory MPs including Jacob Rees-Mogg, Boris Johnson and David Davis joined a rebellion over fixed-odds betting terminals (FOBTs).

More than 70 MPs from both sides of the House of Commons have signed two amendments designed to force the government to bring forward the timing of the planned cut in FOBT maximum stakes to April 2019.

Tracey Crouch resigned as sports minister this month after the chancellor, Philip Hammond, revealed in the budget that the policy would not take effect until October 2019.

Government's FOBT decision influenced by 'discredited' report Read more

Crouch has joined dozens of party colleagues in putting her name to amendments that will pile pressure on the Treasury to revert to the earlier date, understood to have been included in an early draft of the budget.

The rebels include the Treasury committee chair, Nicky Morgan, Johnny Mercer, Priti Patel, Justine Greening and Zac Goldsmith, while MPs from Labour, the Liberal Democrats, DUP, SNP and Plaid Cymru have also signed.

The former Tory leader Iain Duncan Smith, the Labour MP Carolyn Harris and the SNP’s Ronnie Cowan laid the amendments, which are expected to be put to a vote on Wednesday 21 November.

“Enough is enough, MPs on all sides of the House are calling on the government to see sense and bring forward the stake cut for FOBTs to April 2019,” Harris said.

“The government’s position is indefensible. They can either accept our amendments or expect to be defeated in the finance bill next week. It is a great shame for all concerned that it has come to this.”

Duncan Smith said: “Everyone who has signed this is deadly serious about voting for these amendments unless the government have an alternative which is acceptable to everybody.

The shadow chancellor, John McDonnell, said Labour would support the amendment, after the Guardian revealed that a “discredited” report commissioned by bookmakers had influenced the Treasury’s decision on the timing of FOBT stake reduction.

“The chancellor’s position on this issue is now completely untenable and he must now back the cross-party amendment to the finance bill, which Labour will be supporting,” he said.

Backing from Labour, coupled with dozens of signatures from all sides of the House of Commons, mean the proposals are all but certain to pass if the government does not back down.

The proposals have been designed to box the government into a corner.

Because the FOBT stake cut is not included in the budget, the date on which it is due to be implemented, 1 October 2019, cannot be changed via an amendment to the finance bill.

However, the budget does include a rise in online casino tax from 15% to 21%, scheduled to take effect at the same time, to make up for lost FOBT tax revenue.

It is this element that the budget rebels are targeting. Their amendment effectively prevents the government from moving forward with the increase in online casino taxes unless it agrees to reduce FOBT stakes in April 2019.

The Treasury could abandon the rise altogether but this would see it lose its counterweight to the revenue loss from FOBT stake reduction, blowing a hole in spending plans.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

It is politically impossible for the government to reverse planned curbs to FOBTs, which it has called a “social blight”.

That leaves it with little alternative but to bring forward the date rather than be outvoted on an amendment that would kill off the policy designed to pay for FOBT stake reduction.

Duncan Smith, Harris and Cowan also laid a separate amendment that calls on the Treasury to launch a review, based on “independent advice”, into the effect of both policies going ahead in April 2019.

No government has been defeated on its own finance bill since Jim Callaghan’s minority administration was voted down on income tax rates in 1978. Labour defeated a planned rise in VAT on fuel under John Major in 1994 but the measure was actually included in the previous year’s “ticking timebomb” budget, when Norman Lamont was chancellor.