AS foreign secretary David Miliband called the numbers at the South Shields Mecca bingo hall nine days ago, executives at the club’s owner, Rank, might have thought they had finally got the ear of government.

Those illusions were shattered last week when Miliband’s cabinet colleague Alistair Darling announced surprise changes to the tax regime for bingo and poker that will end up costing the company an extra £9m next year.

The move was a shock to Rank. Along with other leading operators, it has mounted a sustained campaign to persuade the government that the “double taxation” of bingo, which pays Vat and gross profits tax, is unfair. No other form of gaming faces such a regime.

The industry has warned that, without a change, many clubs face closure. It has invited MPs, of whom Miliband was the most recent, to its clubs to see bingo at first hand and grasp the integral role it plays in local communities.

None of this seems to have cut any mustard with the Treasury. Last week, Darling announced the much desired repeal of Vat on bingo games, a welcome change, but simultaneously delivered an entirely unwelcome increase in bingo duty from 15% to 22%.

The industry estimates that far from the net benefit to the sector the Treasury may think it has delivered, the changes will end up costing bingo operators millions. As a quoted company, Rank was forced to issue a statement to the market warning of the impact the changes would have on its profits.

Ian Burke, Rank’s chief executive, said: “If they really wanted to be on our side and had listened to our arguments, they would have eliminated Vat and kept bingo duty at 15%.”

His disappointment was echoed by Neil Goulden, chairman of Gala, Britain’s other big bingo operator. “The bingo industry has been quite badly hit. It’s nonsense [for the government] to portray this as a giveaway to bingo.”

Burke and Goulden could be forgiven for experiencing a sense of déjà vu. Two years ago, in his final budget as chancellor, Gordon Brown announced a shock rise in casino duty that was criticised by the two bosses at the time. Last week’s bolt from the blue provoked a similarly unhappy reaction.

The bad news did not stop there. Bingo, along with any business that runs gaming machines, was dismayed at Darling’s announcement of a 9% increase in the tax, known as ALMD, relating to amusement machines.

Executives were especially galled by the scale of the increase when alcohol duty was pushed up by a paltry 2%. “It does feel like social policy is being dictated by the Treasury,” said the boss of one gaming company.

The move was especially surprising given that the House of Lords had backed an increase in the stakes and prizes certain machines are able to offer, a decision seen as a boost for operators. Neil Chinn, president of Bacta, the trade body that represents amusement arcades, said: “Our members will be asking why the government is giving with one hand and taking away with the other.”

The duty rise on gaming machines will affect anyone who has such equipment installed, not just bingo halls. Russell Hoyle, chairman of Inspired Gaming, a distributor of amusement machines, said the rise was “unsatisfactory” and “counter-productive”.

More worrying still is the prospect of a government consultation on whether to change the way fixed-odds gaming terminals are taxed. Such machines make big profits for bookmakers and, if the proposals were implemented, bookies would lose tens of millions.

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