Did a failure to clarify gambling costs influence the Autumn Budget?

Reports modelling the impact of UK gambling tax rises were nitpicked and defended tooth and nail during the extended lead-in to the Chancellor's Autumn Budget. So it's unsurprising that the Office for Statistical Regulation (OSR), chief nitpicking referee, was called to adjudicate on certain data points, namely those published by The Office for Health Improvement and Disparities (OHID) on the cost of gambling related harms, which were then disseminated by the Social Market Foundation (SMF).

That was back in August, but a week after the budget announcement, Ed Humpherson, Director General of the OSR, publicly called out OHID for its lack of engagement with the refereeing process. A freedom of information request from Global Gaming Insider revealed a second wave of complaints about OHID's data and a fuller picture of the frustrations within the statistical regulator.

What was the first complaint?

Raising tax rates does not equal a directly proportionate rise in tax take and, to be fair, not many involved in the debate on gambling taxes suggested that it did. Fundamentally, it was disagreement over the extent to which tax rises would alter behaviour and affect industry in tangential ways that made the issue politically complex.

The Office of Budget Responsibility (OBR) shared its own working when the Autumn Budget was released. More conservative than the think tanks, it estimated that the gambling duty reforms would bring in an extra £1.1bn ($1.48bn) a year by 2029-30, taking into account the shrinking effect that the taxes may impart upon the industry.

Back in the summer, when the debate kicked off, the SMF and the Institute for Public Policy Research (IPPR) both made contested claims somewhere along the line. The OSR did informally meet with and advise the SMF after an official complaint was lodged against its 'Duty to Differentiate' report, but internal communications show that the OSR considered the matter outside its "usual area of focus."

The SMF's report features the following passage: "The Office for Health Improvement and Disparities has estimated that the direct financial cost to government due to harmful gambling was £413 million in 2022 and that, when combining the annual societal value of health impacts, the total annual cost of harmful gambling was between £1.05bn and £1.77bn."

The protestations communicated to and ratified by the OSR were that this goes too far, implying direct causality, rather than association. On 22 September, Ed Humpherson published a letter to the report's author, Dr James Noyes, saying: "We are pleased that prior to our meeting, you published a correction to the report that explains the SMF report mistakenly referred to 'due to' rather than 'associated with' when discussing gambling related harm and that the drafting was not intended to imply a causal relationship. This correction is clear and accessible in line with best practice, and we consider the matter closed."

The correction in question took the form of an asterisk at the bottom of the page from which you can navigate to the report proper. Indeed, when a reader opens the document itself, the original wording remains. OHID, being a Government department, sits more clearly within the OSR's remit. And despite recommendations from the OSR, the original OHID report referenced by the SMF is also unchanged and unclarified.

On 4 December, a week after the budget, Humpherson saw fit to write a second public letter. This time, it was addressed to Chris Mullin, Chief Economist at the UK Department of Health and Social Care (of which OHID is a part). In this letter, Humpherson laments the lack of engagement from OHID. Internal OSR messages show that the remedial action taken, and not taken, failed to stem the tide of complaint. A second wave arrived at the OSR's door across September and October.

What were the new complaints?

More than a month on from the correction three further issues were raised with the regulator.

The first was a Liberal Democrat policy motion named: "Freedom from Harm: Gambling as a Public Health Issue." This was under scrutiny for its use of those same '£1.05bn to £1.77bn' figures.

Ben Coleman, Labour MP, was also cited for his reference to OHID's gambling related suicide figures. In a House of Commons debate he said: "Does my hon. Friend agree that we should also look at the impact on people's mental health of online gambling, which is responsible for between 117 and 496 suicides a year - figures repeated in our Health and Social Care Committee report?"

And the third complaint was made, again, about the SMF's Duty to Differentiate report. The same section was referenced again, along with a later passage that also refers to the OHID report. This second contested statement reads: "'That may represent an upper bound, but it would substantially increase the estimated fiscal cost of gambling, to £7.2bn using the OHID method and £5.0bn using the NIESR method."

OSR email conversations reveal that, despite being contacted about the potential misunderstanding in the report, OHID failed to respond to OSR emails on the matter. The health body had been asked to include a "clear caveat in the publication, advising users that the estimated costs are associated with gambling, rather than solely attributable to it."

On the three complaints, the OSR casework notes that party-political and independent think tanks are out of its usual area of focus, and therefore, intervention will always be informal and advisory.

Ben Coleman's statements in the Commons, however, were taken more seriously, with the MP contacted with a recommendation he correct the record. According to Hansard, Ben Coleman has to date made no such correction.

As of 17 October, it appears OHID had still not been in contact with the OSR. Ed Humpherson's letter to Chris Mullins was published on 4 December, and at time of writing, there is no clear clarification on the OHID report of the sort recommended by the OSR.

The lack of coordination and collaboration between two Government-related organisations on a matter germane to the nation's fiscal plan is not an encouraging revelation. It will, however, pour fuel on the fire of those who claim the Treasury's plan for gambling taxes was founded on unsubstantiated, faulty data and political expedience.

The Government Department of Health and Social Care has not responded to Global Gaming Insider's request for comment.