HC Deb 26 April 1926 vol 194 cc1706-8

I am very reluctant to add to the existng burdens of compulsory taxation. I have, therefore, caused an examination to be made of various methods of optional, or luxury, taxation. I prefer the word "optional" to "luxury." By optional taxation I mean taxation which all persons can avoid, perfectly legitimately, if they choose, without depriving themselves of anything required for their health, comfort, morals or business. Many suggestions on this subject have reached me and many plans have been explored. I will not weary the Committee by enumerating, still less arguing, those alternatives, on which at present I have no proposal to make, but there is one form of optional taxation which has been so much debated in the last few months that the Committee will be aware of it before the words are out of my mouth. We have decided to impose a tax on betting. Betting is certainly a luxury and it is certainly optional. No one need pay a tax on betting unless he, or I must add, she, wants to do so. I shall have plenty of opportunities of arguing the question later on

Let me this afternoon explain what we propose to do. The law and practice of this country in regard, to betting are curious. Credit betting is legal everywhere. Cash betting is legal on a race course. Everywhere else cash betting is illegal, and the police are charged with the duty of repressing it. As always happens when prohibitions are imposed which do not carry public opinion with them, there is both wholesale evasion and occasional connivance, and the law is brought into disrepute. There is one law for the rich and another for the poor, but in one way or another everyone and anyone who wants to make a bet in this country can do so with impunity.

Such is, I hope, a succinct account of the existing position of the law and practice of betting as it is known to everyone. We do not propose to alter that position in any way. I am not looking for trouble, I am looking for revenue. I am not trying at this particular moment, or on this particular point, to set the world to rights. I am trying to balance future Budgets. I do not, therefore, propose to change the law. We do not propose to make anything legal which is not now legal and we do not propose to invest a wager with any recognition, sanction or recoverability which it does not now possess. I propose to leave the anomalies, the inequalities and the prohibitions where they are. My object is to tax legal betting only and to leave illegal betting in the same position as it is at present. That is the proposal, and I need scarcely say it is a proposal which has been very long and carefully examined. The ground on which it stands has been very carefully considered and tested, and it is the only proposal I have to put before the House on this subject.

All estimates are necessarily highly speculative. I am advised that legal betting, although involving a smaller number of persons than illegal betting, covers more than nine-tenths of all the money that passes. I propose to put a tax of 5 per cent. on every stake made upon a racecourse or through a credit bookmaker. As I have already told the Committee, I do not intend to argue this case to-day. I shall no doubt have plenty of opportunities later on. There is one point, however, to which I must refer forthwith. I shall be told, "Granted that you are not making legal anything that Os now illegal, are you not making money for the State out of what, however legal, is an evil thing?"


Hear, hear!


I reply that the Treasury is already making money out of the evil thing. I am afraid this will shock the hon. Lady the Member for East Middlesbrough (Miss Wilkinson). Every Chancellor of the Exchequer, of every Party, for many years past, has unhesitatingly done so. About £250,000 a year is gathered in Income Tax and Super-tax from the profits of bookmakers. Moreover—I am afraid the Committee must brace itself for a shock—a certain amount has been collected in every year by the vigilance of the Revenue officials from the profits, not of legal, but of illegal bookmaking. Money is, therefore, already being made by the State out of the evil thing, and not out of the legal evil thing only, but out of the illegal evil thing. This has been done as a matter of course without exciting public censure, or even public comment, by everyone who has occupied the post of Chancellor of the Exchequer, even by so rigorous a social reformer as the right hon. Gentleman the Member for Colne Valley.

The machinery of the tax is not more difficult than that of other taxes which we are successfully collecting. Nearly the whole will be collected on returns furnished by credit bookmakers. It will be collected as easily as Income Tax is collected on their profits, or on the profits of stockbrokers or business men. Cash betting on race courses will be taxed by a system of tickets, to which we believe the race-going public and the ring will readily accommodate themselves. The tax will in all cases be based on the amount of the stake. The bookmaker will be the person immediately responsible, and he will no doubt recover the tax from his clients by a certain shortening of the odds. This tax cannot, I regret to say, come into operation till the flat-racing season this year is ending. Therefore, it will not be imposed before 1st November. A great deal of work has to be done. The yield in the first year will, therefore, not exceed £1,500,000. In a full year it is estimated to produce £6,000,000.