HC Deb 02 December 1947 vol 445 cc286-305
Mr. John Lewis

I beg to move, in page 3, line 29, at the end, to insert: Provided that no duty shall be payable on such stake money which is returned by the totalisator without deduction by the promoter of the percentage of the stake money in accordance with paragraph 3 of the First Schedule to the Betting and Lotteries Act, 1934. As the Clause now stands, it would appear that on all bets that are made on dog racecourse totalisators there will be deducted a sum equal to 10 per cent., which would be Excise Duty. I understand that it is now the practice, in respect of all sums staked on the totalisator, for the promoters to deduct, in accordance with Paragraph 3 of the First Schedule to the Betting and Lotteries Act, 1934, a sum of 6 per cent., which they are entitled to do. There are cases when no race takes place, due to inclement weather conditions, which may develop rapidly between the time the stakes are invested on the totalisator and the time the race is to be run. In this and other circumstances it is the practice to return all the stake money to the bettors without a deduction of any of the 6 per cent. to which the promoters are entitled. The purpose of this Amendment is to ensure that in the event of these circumstances occurring, the money will be returned, not only without the deduction of the 6 per cent. but also without the deduction of the 10 per cent. to which the Revenue would be entitled by way of Excise Duty in accordance with this Clause. I should be obliged if my hon. and learned Friend would clarify the position.

The Solicitor-General

I think I am in a position wholly to reassure my hon. Friend about the question which he has raised by his Amendment. The tax only impinges upon a bet, and if the circumstances are such that the bet is off owing to inclement weather, or for whatever other reason, a bet does not take place within the meaning of the Clause, and in consequence the Betting Duty would not be imposed. I think that is the question, and I can give my hon. Friend that categorical assurance.

Mr. Lewis

I thank my hon. and learned Friend, and, in the circumstances, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. H. Hynd (Hackney, Central)

I wish to draw attention to the tax which is proposed by this Clause, particularly on the grounds of equity, which I think should make a special appeal to my right hon. and learned Friend. I must remind him again of the words spoken by his predecessor in introducing the Budget in April last, when he said: … the Labour Party stand for justice; and to tax 'totes' and pools alone, and let the bookmakers go free, would be wrong; it would be unjust; it would be repudiated by all right thinking men and women."—[OFFICIAL REPORT, 15th April, 1947: Vol. 436, c. 78.] I am afraid that the whole Committee must agree that this tax, as it is now proposed, is definitely unjust. I think there can be no doubt about that. Look at what it proposes—that in addition to the 6 per cent. now deducted by the greyhound totalisators for management expenses, there shall be this additional to per cent., making a total deduction of 16 per cent.

8.0 p.m.

Nobody can object to that as a matter of principle if it is applied fairly, but it does not apply to totalisators on horse tracks, nor does it even apply to the bookmakers on the greyhound tracks. There are other anomalies in addition, but there are those two glaring anomalies in particular as it now stands. I do not propose to deal with the anomaly regarding differentiation between the dogs and horses, because at least one of my hon. Friends knows far more about that than I do. However, in regard to the anomaly between the totalisator and the bookmaker on the greyhound track, I suggest very seriously to my right hon. and learned Friend that here is a discrimination that he can clean up quite easily. I do not think he could dispute that.

Whilst we may have to accept what he said on 25th November, that this is not an occasion when anybody will expect us to review the whole law of betting and that it would not have been an appropriate subject for an interim Budget, there is no reason why he should impose the tax in the form now proposed, thus leaving these glaring anomalies. It means simply that there is a subsidy of 16 per cent. given to the bookmakers on the greyhound tracks, with the very natural consequence that people will be tempted to put their money with the bookmakers instead of the totalisators. If my appeal for equity should fall on deaf ears, I must appeal to the Chancellor's more sordid instincts. For it is obvious that in doing this he is losing revenue, because he is diverting money from the totalisator, which is taxable, to the bookmaker who is not taxable. That is not very businesslike.

I may be asked in what way he can apply this tax to the bookmaker. I believe that the Chancellor has had a document from the National Greyhound Racing Society pointing out in great detail how he could apply this without any cost to the Exchequer by way of a licence fee for the bookmaker. A licence fee could be charged to the bookmaker on his arrival at a track. There is every safeguard. There is all the machinery for carrying it out, and I ask him whether he cannot accept this scheme and thus remove the discrimination which is now proposed. A few moments ago, in reference to another Amendment, the Chancellor said— and I wrote the words at the time—"If I am convinced, I shall have no hesitation in altering my views." I suggest that on this occasion he cannot be other than convinced by the arguments which have been advanced not only by me but by many others. I do not press him at this stage to deal with the main issue covering the whole field of betting, but on this particular point there is such an easy way out that I shall be very surprised if he does not adopt it.

Sir Alan Herbert (Oxford University)

I do not propose tonight to repeat all the things that I and others said on the Second Reading of the Finance Bill or to elaborate the case so very well made by the hon. Member for Central Hackney (Mr. H. Hynd). I want to try once more to get from my right hon. and learned Friend the Chancellor the assurance which I did not quite get on the Second Reading. I do not think that we need elaborate all the illogicalities and injustices; they are now generally accepted. I am quite sure, now that the Chancellor of the Exchequer has had the opportunity to study this affair rather more closely than was possible on the Second Reading, that his logical and just mind will substantially agree with ours.

On the Second Reading he used some expressions to which I gave a little cheer of goodwill, but, having read them I must say they do not really satisfy me. He said, for example: This is not an occasion when anybody would expect us to review the whole law of betting. I quite agree. Nobody is asking him to do that. What we ask him to say is that, as time and opportunity permits, he will go to the Cabinet and say, "Can I have an instruction to some Minister or Committee to go into the laws of betting and to study the report of the Royal Commission of 1932?" He also said: It may be that one day someone will undertake that task. I think they may have rather a stormy passage when they try it out. In the past I agree that that would have been true. At present, such is the general opinion of the House, that I do not think the passage would be stormy at all. Even if it was, is that a reason for this great tiger of a man who fears nothing to hold back? Finally, he said: But we shall certainly watch the bookies.… then followed a genial jest to me— … and if it proves in the event that the tax ought to be extended to them, we shall, no doubt, take our courage in both hands and see what we can do about it."—[OFFICIAL REPORT, 25th November, 5947; Vol. 444, C. 1924.] That is something, but really that is not the right sort of language, if I may respectfully say so. He said: … if it proves in the event that the tax ought to be extended. We all know now that by all the ordinary rules of justice and logic—

The Temporary Chairman (Colonel Sir Charles MaeAndrew)

I must remind the hon. Member that he should confine his remarks to what is in the Clause.

Sir A. Herbert

That is all I have to say. I do not want to delay the Committee. All the points have been made. I am really asking the right hon. and learned Gentleman to do what I think must be in his logical and just mind, and to give us some rather stronger assurance than we have had that he proposes to tackle the thing more thoroughly.

Lieut.-Commander Braithwaite

I say at once that I am in favour of the principle of this Clause, but I feel that, before we part with it, it would be valuable if we could probe a little further into the mental processes of the Government in introducing it. It was only on 15th April last that the right hon. Member for Bishop Auckland (Mr. Dalton), in presenting his Budget, used these resounding words with all the emphasis at his command: … the Labour Party stands for justice; and to tax 'totes' and pools alone, and let the bookmakers go free, would be wrong, it would be unjust, it would be repudiated by all right-thinking men and women."—[OFFICIAL REPORT, 55th April, 1947; Vol. 436, C. 78.] Hon. Members say that we have had that before. It is just as well to repeat it from this side of the Committee so that there should be unanimity on these matters. I want to probe the mind of the Government very gently on this matter. I presume that the primary object of this Clause is to stop inflation. It is an anti-inflationary Measure. If that is so, I suggest to the Government that that point of view is not quite logical, because what they are going to do is to penalise the totalisator and to transfer the stakes, probably, to the bookmaker so that the anti-inflationary apparatus is destroyed Even if all forms of betting were stopped the inflationary position would not be helped because the money would go somewhere else, presumably in pursuit of goods of one kind or another.

Is it revenue that the right hon. and learned Gentleman is after? If so, I think we ought to be told. Or is it another motive in clamping down on betting on dog race tracks? I think the Committee is entitled to know. The argument which I want to address to the Committee, however, has particular reference to the machinery of the tax. We had some rather heated Debates in 1933, when proposals were introduced for the taxation of Co-operative societies.

The Temporary Chairman

The hon. and gallant Gentleman knows perfectly well that he is going outside the rules of Order in discussing that matter.

Lieut.-Commander Braithwaite

Do I understand your Ruling, Sir Charles, to mean that I must not speak about the Co-operative societies?

The Temporary Chairman

The hon. and gallant Member knows that, on the Question "That the Clause stand part," he must confine himself to what is contained in the Clause. It is a very narrow field.

Lieut.-Commander Braithwaite

I understand that I cannot ask the Government about the machinery of this Clause. Perhaps there may be an opportunity in a later stage of the Bill, because there is an extremely interesting parallel here. If you tell me, Sir Charles, that I cannot proceed on this occasion, I will try to make the point at a later stage.

Mr. Paget (Northampton)

There is only one point which I want to make. It has been suggested that this Clause is making a favourite of horse racing at the expense of dog racing. Really, that is not so. The dog tote and the horse tote are entirely different businesses. I do not want to make very much of this point, but I want to say that the Race-course Betting Control Board, which manages the racecourse tote, is a public corporation, and that none of the profits or dividends go directly to any individual—

Lieut.-Commander Braithwaite

On a point of Order. In view of the Ruling which you have just given, Sir Charles, may I ask you if the hon. and learned Gentleman is in Order in discussing betting on horses on racecourses?

Mr. J. Lewis

Further to that point of Order. May I point out that Clause 6 states: There shall be charged on all bets made by way of pool betting, other than bets made by means of a totalisator set up on an approved horse racecourse by or under the authority of the Racecourse Betting Control Board, a duty of excise, to be known as the pool betting duty, equal to ten per cent. of the amount of the stake money paid. Perhaps, Sir Charles, you will permit discussion of a comparison between the two forms of tote.

Mr. Paget

I was only trying to make it clear that there are two forms of totalisators, which are entirely different and which are doing different business, and that, if that is so, it is right to treat one in one way and another in another, which is what this Clause does. It is perfectly true that some of the proceeds from the horse tote, which is a public corporation, go to the racecourses and that others go to the Ministry of Agriculture for the maintenance of horse breeding, but that is not the point. The point is that they are two entirely different businesses. The racecourse tote is almost entirely immediately competitive with the bookmakers, and the punter goes from the one to the other to get the best price. On the whole, I think the tote showed the best prices on 51 occasions as against 40 occasions. If we take 10 per cent., or any other percentage, of the tote odds on horse racing, then immediately we make the tote uncompetitive with the bookmakers and put it straight out of business. If we are to take a percentage from the totalisator on horse racing, we cannot do it without a similar tax on the bookmakers. The greyhound tote runs three pools, the first of which is the forecast pool, which is for the purpose of placing the first and second in the race. The forecast pool represents something like 65 per cent. of the greyhound track's tote business. That is not competitive with the bookmaker, because he does not bet on forecasts.

8.15 p.m.

The Temporary Chairman

I think we must stick more closely to the Clause.

Mr. Paget

I am just pointing out the difference between the two. Of the remaining 35 per cent. profit, one part is placed, and the bookmaker does not bet on places. He only bets on wins, so that only about 20 per cent. of the busines of the tote on a dog track, as against horse racing, is going immediately to the bookies. I am not saying that, in the long run, more people will not go to the bookmakers to bet on wins, and fewer people will go to the clipped odds on the forecasts and the place. There will gradually be a movement from the tote to the bookmaker which will injure the revenue of this tax and will be unfair to the tote in relation to the bookmaker. It will not be an immediate process, as it would be on the racecourse; it will be, more or less, a gradual process, although I entirely agree with what was said by my hon. Friend that, if this tax is to go on, a method must be found to tax the greyhound bookmaker. The two things—the racecourse and the racecourse totes—are not comparable businesses at all.

Mr. George Wigg (Dudley)

I want to follow my hon. and learned Friend the Member for Northampton (Mr. Paget) and point out that there is a further difference between dog tracks and horse racecourses which makes it imperative, in my judgment, that the Chancellor should face the social consequences of this Clause. I have been to a greyhound racetrack on a few occasions, and I am convinced that greyhound racing is absolutely straight. One is reasonably sure that the dog one backs is at least trying.

The Temporary Chairman

I think we should keep off the morality of betting.

Mr. Wigg

If you will bear with me just a moment, Sir Charles, I think I can show that I am not discussing the morality of one form of betting as against another; I am making what is a very important point indeed. It is a fact that the majority of the betting which takes place on the dog track is conducted in a completely impersonal way. The totalisator takes its cut of 6 per cent., and does not mind who wins. But, on horse racecourses, the money handled by the tote is comparatively small compared with the volume of money handled by the human element. As a result, the human element takes very good care, on occasion, that it wins. When one goes to a racecourse and backs a horse, what one wants to know is whether the horse is trying or not. The percentage of non-tryers among horses is very high because of the volume of money that passes through the hands of the bookmakers.

Mr. J. Lewis

Will my hon. Friend allow me to interrupt him for a moment?

Mr. Wigg

Not for the moment. Therefore, if the Chancellor persists in retaining this Clause, and forces an increased volume of money into the hands of the bookmakers on the dog track, he is opening up an avenue of temptation which, before very long, will tend to bring dog track racing, which is a popular pastime, down to the same level of morality as that on horse racecourses. I think that betting is a human frailty. Nevertheless, we must do the best we can to keep it as clean and as straight as possible. The standard of morality in horseracing would be considerably increased if the bookmakers were wiped out altogether. Short of doing that, I hope that some time in the future the Chancellor will set about doing that job—

The Temporary Chairman

This is quite beyond the Clause.

Mr. Wigg

At the risk of incurring your wrath again, Sir Charles, I want to plead with the Chancellor to recognise that in this Clause he is going to give a premium to the bookmaker at the dog track. I hope very much that he will have second thoughts on this before the Report stage, and that he will say he is going to institute a method of taxing the bookmaker.

Captain Marsden (Chertsey)

I think the hon. Member for Central Hackney (Mr. H. Hynd) put the case very fairly and very well. My chief objection to this Clause is the absolute unfairness to the person who wants to make a bet on the totalisator at the dogs. That is all such a person goes for. On every £100 the totalisator will take, the first £16 are removed before the unfortunate hacker gets anything at all. That is most unreasonable. I think the Chancellor should estimate the value he will get from the tax in other directions. The position now is very different from what it was many years ago. All these bookmakers have got their places. I see there is a case in the High Court now where a bookmaker is claiming his right to his pitch. All these men can be found. They have all got their licences, and it would merely mean that they would pay a little extra for the licences. Where horse races are concerned the bookmakers in Tattersall's ring have a higher standard of commercial morality than anybody else in the country—

Dr. Morgan (Rochdale)

What has Tattersall's ring got to do with this Clause?

The Temporary Chairman

I was just about to stop the hon. and gallant Gentleman.

Captain Marsden

I thought as the matter had arisen I should be right in touching on it. The hon. and learned Member for Northampton (Mr. Paget) pointed out that profit from the totalisator at horse races was distributed for the benefit of the country. The National Greyhound Racing Society has just contributed £70,000 for canine research. Why should not dogs get as good a look in as horses? Racing greyhounds have been sold abroad. That is a form of export which brings in dollars, so the money is not being wasted in that respect. The hon. and learned Member for Northampton went on to give a quite wrong idea of how the relationship between the bookmaker and the totalisator would mean that there was no competition between the two. All the bookmakers I know would be there making bets when there was money being paid in and if they did not get it in one form they would get it from another by altering their routine.

One cannot help feeling so far as the probabilities are concerned that if there is taxation the totalisator people will gravitate to the bookmaker and he will bet place money, first, second, or anything else you like. He may not at the moment, but he will very soon change his tune, and when you get the big advantage of £16 in every £100, look at the start the bookie gets. I have no doubt he will increase his odds just enough to keep ahead of the tote all the time. I do think if the Chancellor expects us to support any way of getting in money from betting, he must think of something better and fairer than this.

Sir S. Cripps

Perhaps it would assist if I were to intervene at this stage in the Debate. I think this is a very difficult subject. I would emphasise again that this is an emergency Budget, in which we cannot expect to go completely into all the details of a new tax such as this one. The object of the tax is to make an immediate collection of money, which does not need a very complicated machinery in order to attain it.

It is quite true that, in the competition between bookmakers and the totalisator—I speak as a child in these matters, having no experience of them—there may be some extra inducement for people to bet with the bookmaker as a result of this tax. There is, however, one feature which, it seems to me, most hon. Members have forgotten when speaking about that competition, and that is that the bookmaker has to live. He takes something out of the 100 per cent. as well; but when we come to try to find out what it is that he takes out of the 100 per cent., as I have been trying to do over the last few days, we find that it is extremely difficult to ascertain. I understand that the sort of overall figure fairly generally accepted is 15 per cent., which is not very different from the 16 per cent. from the totalisator under this scheme of taxation.

Nevertheless, I can appreciate that it would be most unfortunate, both from the point of view of the bookmaker and, I think, probably from the point of view of the public, too, if the result of this was to drive people from betting on the totalisator to betting with bookmakers which, judging from the remarks of hon. Members, seems to be, on the whole, the least desirable way of investing one's money. I take the view, therefore, that we must certainly go into the question of whether or not, and if so how, we can equalise this tax over the bookmakers as well as over the "tote." I have made a good many inquiries in the course of the last few days on that matter, and I can assure hon. Members that it is not quite so simple as some people would think. All bookmakers are not equally wealthy, nor do they take an equal amount on every course; all courses are not the same; the people who frequent them are different and the conditions are different. If we make a sort of flat, overall licence fee, I do not think it would have the effect hon. Members would wish, nor would it be more equitable than that which they have themselves described as inequitable. It is a matter that requires consideration. If I were sure that this taxation was going to cause a sudden avalanche away from the totalisator, then it might be necessary to do something in order to stop that, even though it were not the best thing to do. Personally, I do not think it is going to cause any such avalanche at all. If it is going to cause a change, it will be a seeping off which will not have gone very far by April next. I hope by that time, as we see how things develop, we shall, if necessary, be able to introduce some measures of taxing the bookmakers which will be practical and also equitable, both compared with the totalisator and as between the bookmakers themselves.

I hope, therefore, that the Committee will take the view that we had better leave this Clause as it is, as the beginnings of an emergency tax upon this subject matter. We had better think really carefully, and try to get it into a form which will not lead us into the condition that the last betting tax got, after a very short period of time. It is a matter which requires study, and I am sure that, with all the hon. Members on this side of the Committee who are obviously so expert in this matter—and on the other side of the Committee as well—we shall get a lot of assistance as to how We can best apply this taxation. That, I believe, is the wisest thing for the Committee to do in the circumstances. Therefore, I would ask the Committee, in view of what I have been able to say about the matter, to let us have this Clause as the initiation of a new type of taxation for an emergency purpose, and to give us time to work out the sequel in the light of what happens, so that we can get a sound method to apply to the bookmakers.

8.30 p.m.

Mr. Stanley

I am afraid I have not heard the whole of this discussion, but what I have heard has convinced me that on this topic there is a greater wealth of practical experience among hon. Members of both sides of the Committee than on almost any other topic I have heard discussed during the Debate. I certainly would not try to follow hon. Members into their moral excursions as between horse racing and dog racing, and as between bookmakers and totalisators.

The hon. Member for Dudley (Mr. Wigg) paid a great tribute to the morality of dogs, whereas I gather he thought less than nothing of the honesty of horses, but into those respective merits I would not presume to enter.

I rise to make only two points. The first is that, when we think of the burdens which are today being put upon people—with the assent of all of us—in order to stop the still greater evil of inflation, and when we think of some of the kinds of taxation which we have already discussed this evening, I cannot feel that those who take their pleasures through gambling rather than through drinking beer, or smoking cigarettes, or visiting the cinema, can complain if they are called upon to bear some portion of that taxation. Therefore, I could not oppose a fair attempt to subject them to some of the special burdens which all sections of the community are called upon to bear today.

On the other hand, I must confess I was a little shocked by the fact that the right hon. Member for Bishop Auckland (Mr. Dalton), when Chancellor of the Exchequer, introduced this tax in November, in view of what he said about it only last April. If in April he had said, "This tax is impracticable," I could quite well understand that within six months he might find that, in fact, there was a way of doing it. Had he said, "This tax is unnecessary," I could understand that in six months the financial situation might so change as to render necessary what had hitherto been unnecessary. But he did not use those arguments. What he said was, "This tax on greyhound totalisators by itself is unjust. It is against the Labour Party's conception of justice." I confess, I was rather shocked that within six months he should introduce a tax which he himself had condemned, quite gratuitously—because he had gone out of his way to explain to us that he had considered and rejected this tax because it was unjust. I shared his first but not his second thought.

I think there is a considerable element of injustice in the present tax, and I hope that in April we shall be able to take a more general view of the whole subject, and to see that whatever contribution is to be called for from those who indulge in gambling, should be taken in the fairest and most equitable way. I cannot oppose the tax in this interim Budget, because we need the money. There is no reason why gamblers should not pay, but those who are called upon now to pay this tax have every right to expect that the general equity of the whole proposal will be looked at as soon as possible, in order to make sure that they are not called upon to bear a burden from which others are excused.

Mr. Goodrich (Hackney, North)

I want to refer to the point made by the right hon. Member for West Bristol (Mr. Stanley) concerning the man who bets on the totalisator, as compared with the cinema goer, the beer drinker, or the smoker. In my view, the punter is as good a sportsman as any one. He has no real objection to paying this 10 per cent tax, but he objects to the equity of the tax. He asks why he should pay a 10 per cent. tax on dog racing as a working man, while the rich man who goes to the racecourse is not taxed. It was with great pleasure I heard the Chancellor of the Exchequer say that he was prepared to look into this matter from the equity point of view.

I should like a further assurance from him that when he taxes bookmakers, he taxes them in the broadest sense, so that the man on the racecourse is dealt with in exactly the same way as anyone else. I hope that he will also take it a stage further, and put a tax on the totalisator on the racecourse. We have been told where this money from the totalisator goes, but that does not matter. What matters is that any tax on betting should be imposed on all betting. I am satisfied that the working man is a good sportsman, and that he will not mind a 10 per cent. tax, provided it is an equitable tax.

Sir R. Glyn

The whole of this Debate has, so far, concerned betting on the course, and not betting off the course. Perhaps the Committee will forgive me for pointing out that I was responsible for introducing the Racecourse (Betting Control) Act in 1928. We had great trouble in getting that Measure through, but having got it passed, all the fears expressed by the bookmaking fraternity proved not to be justified. That Act is now probably accepted by all honest bookmakers, who use the totalisator to assist them in making up their books. The Chancellor of the Exchequer may have overlooked the fact that it was illegal for a bookmaker to be on the racecourse until that Act was passed. One of the provisions of that Act makes it legal for a bookmaker to have a place on the course. During the discussion on that Bill it was suggested that bookmakers should be asked to pay for their places. By having different enclosures that does happen. The most important thing is this: I am sure that nobody in this Committee, or in the country, would resent a tax being levied on something which is, after all, non-essential. I believe that it is only right and proper that this tax should be levied, but it must be fairly levied. I believe that it is possible, because of the attitude of this House, which has changed so much since 1928, for a scheme to be devised which is fair and just.

One of the things which must be considered is that the tax does not allow for credit betting. Half the damage which has been done to people by gambling has been because they have overstaked their means. The real grounds for the establishment of the tote was cash, and not credit, betting. The Chancellor must remember the damage done by street betting, and the fact that betting offices or outside offices for the tote, are not allowed. It is useless to believe that the tax can be confined either to racecourses or dog tracks. It must have a general application, and be fair. If that is done I believe that, through the medium of the tote, both on racecourse and dog tracks, it will be possible, with the connivance of the bookmaking fraternity, to establish a tax which is fair and just.

Mr. Ronald Chamberlain (Norwood)

I must say that the Chancellor has left the situation more obscure than it was hitherto. I do not want to repeat the quotation we have heard many times from the ex-Chancellor, but I rather pinned my faith on what he said earlier this year, and I was considerably shaken when my right hon. Friend, for no apparent reason, departed from what he had laid down when he introduced this Budget. What I hoped the present Chancellor would have done, and which he has not done, would be to make it clear why he is introduicng this tax in this very hurried way. I would have thought, especially in view of what he himself said tonight—that he intended to consider the whole question of bookmakers, and that this was only a partial proposal—that he would have withdrawn the tax, and introduced something which was fair, equitable, and properly balanced in the April Budget.

Several hon. Members have indicated the way in which they think the present proposal is unfair and unbalanced. I would like to know from my right hon. and learned Friend what is the purpose of this tax? Is it to raise revenue? I cannot think it is that, because the whole purpose of the Budget was not to raise revenue. It was to combat inflationary tendencies——

Dr. Morgan

On a point of Order. Is my hon. Friend in Order in going into this matter on this Clause?

The Chairman

If the Committee will forgive me I think the hon. Gentleman is much more in Order in discussing the purpose of this Clause than some of the discussion we have had up to now. It is not proper to discuss the merits or demerits of some other form of tax on bookmakers or otherwise; the question is whether the Clause as it is set out in the Bill shall be approved or not. It is competent to give reasons for or against that course but not to go into other forms of betting.

Mr. Chamberlain

I was saying that we ought to know the real purpose of this tax. Is it to raise revenue? I do not think there is any shortage of internal revenue in this country. The purpose of the Budget was clearly stated to be anti-inflationary. Is this tax to curtail betting and betting tendencies? That might well have been the intention of the present Chancellor, but this move originated with his predecessor, and I cannot think that that was his purpose. In any case, thin proposal does not do that. It cannot be to reduce any kind of consumption, which was the purpose of many Budgets and proposals such as, for instance, the raising of the Tobacco Duty. This can only be an anti-inflationary proposal, and I fail to see how a small and only partially restrictive measure of this kind, even in embryo, can be an anti-inflationary measure. I should be glad if the Chancellor would state quite clearly what is the intention. I think that many of us would then, perhaps, appreciate his point of view. I reiterate that I think that the proposal is one-sided and out of perspective; and the only proper way would be to withdraw it and have a proper and adequate measure, which I would fully support in April. I cannot see the force of rushing this in, in the one-sided way in which he has done it.

8.45 p.m.

Mr. Molson (The High Peak)

The right hon. and learned Gentleman has undertaken to go into the matter carefully before the next Budget. I invite his attention to one particular issue which, I think, should be considered before the next Budget is introduced. When the Racecourse Betting Control Board was set up, there was no general tax on betting. Therefore, it was natural that the profits when they arose—which they did not for a number of years—from the totalisators controlled by the Board, should be used for a special purpose. The purpose was to encourage the breeding of horses and matters connected therewith. It was, in a certain sense, like the origin of the Road Fund which was levied on motorists, when something in the nature of a pledge was given to motorists that the Fund would be used for the roads. Similarly, the profits of the Racecourse Betting Control Board were to be used in matters especially connected with horses. Since other forms of betting are now being required to make their contribution to the general revenue of the State, I hope that, before the next Budget, the Chancellor of the Exchequer will give consideration to altering the law under which the Racecourse Betting Control Board is now operating. I think the general purposes were admirable, but they were narrowly restricted to horses, and unless he intends to bring, which would be quite logical, the totalisators under the Racecourse Betting Control Board into the general fund of the Exchequer, I hope that he will consider extending the purpose for which that money may be used to veterinary purposes of all kinds.

Mr. J. Lewis

I have not the slightest hesitation in saying to the Chancellor of the Exchequer that every Member of this Committee is satisfied about two things. Firstly, that, if it is possible, bookmakers should be taxed, and, secondly, some Measure should be introduced to tax bookmakers at the first possible moment.

We have a certain amount of sympathy with the Chancellor who has come into this matter at a very late stage, and taken over where the former Chancellor left off. I feel that it is very unsatisfactory for him to tell us that on 4th January this new Measure is to be introduced for taxing dog racing totalisators, but until such time as he introduces his Budget in April, the bookmakers will go scot free. It seems to me that the promoters of racecourse totalisators, who are reputable bodies, are being penalised, and the bookmakers are "getting away with it," because it is said that they cannot be taxed.

There have been proposals which were referred to by the hon. Member for Central Hackney (Mr. H. Hynd), which have been placed before the Chancellor in the last 24 hours. I agree that he has not had much time to give them consideration. These proposals are, I think, from a body known as the Greyhound Racing Association, who undertake to collect the tax for the Chancellor and return it for revenue in the same way as the deductions of the 10 per cent. Excise Duty on the totalisators. The proposal rests on the assumption that they shall charge bookmakers so much for the pitches they occupy, and the money shall be returned to the Revenue.

I ask the Chancellor of the Exchequer to give these proposals further consideration, because I have been through them, and, with my limited knowledge, and without that expert knowledge to which he referred, I am quite incapable of deciding whether or not they are operative in their present form. Together with his officials who will be able to advise him, he should be able to decide this matter, and I hope he will give it immediate consideration with a view to seeing if it is possible to introduce some form of taxation on bookmakers on 4th January, the date on which the totalisators are to be taxed by the 10 per cent. duty.

The other matter to which I wish to refer is this matter concerning horse race totalisators. I am ready to give my right hon. and learned Friend the benefit of the doubt after hearing him speak a little earlier because I thought he was going to propose that there should be some benevolent fund for the starving bookmakers in this country, but what he should realise is that their expenses are negligible as compared with the totalisator. The totalisator is a very expensive instrument to run, and bookmakers who have not the same overhead expenses get away with quite a lot and would get away with more if they were not equally penalised by this Measure.

But the matter to which I wish to draw attention is the Chancellor's assumption which he made apparent in this Chamber during the Second Reading that the horse race totalisators are not run for private profit, the main object being the provision of funds for horse breeding and the provision of amenities for the public to enjoy. Since then I am shocked to find, in point of fact, that that is not the case. For instance, I find that a firm of bookmakers, or shall I call them credit system bookmakers, known as Tote Investors, Ltd. are responsible for one-third of the sums of money which are invested on the tote by virtue of an arrangement which exists between the promoters of the totalisators, the Racecourse Betting Control Board and this company. I find that during the year ending 1946 there was a commission paid by the Betting Control Board to Tote Investors, Ltd., of a sum of no less than £176,274.

I ask my right hon. and learned Friend, if he claims that this is not run for private profit and is a benevolent organisation whose objects are desirable, if he can justify the assumption that the payment of commission to a private firm of bookmakers should be the object of a nonprofit making organisation. I might add that this private firm of credit bookmakers has amongst its directors two members of the Jockey Club. It is a highly reputable organisation with branches all over the country; and the fact that two stewards of the Jockey Club are members of it adds to its standing. Those people are responsible for the administration of horse racing and I believe they try their best to keep it on proper lines.

When we look still further into this matter and investigate the claim of my right hon. and learned Friend that these totalisators are not run for individual gain, we find another remarkable thing. The amount paid towards the reduction of travelling costs of horses to meetings totalled £41,000. In other words, £41,000 were taken out of this fund and paid to private owners of racehorses by way of subsidy to reduce the travelling cost of bringing their horses to races. It seems to me that there is a very strong case in the present circumstances for bringing in horse race totalisators into the general ambit of taxation having regard to what my right hon. and learned Friend has in his mind.

I appreciate that this is a matter which could not possibly be considered prior to the April Budget of next year, but I seriously contend that it is very essential in these matters to be very accurate when it is suggested that horse race totalisators do not operate for private gain. It is essential to ensure that that statement is absolutely correct. There is another matter in relation to the manner of expenditure of this money, and it is the fact that quite a large sum is paid for the upkeep of racecourses, which in 1946 amounted to £75,453. Many racecourses are private shareholders' companies and——

Mr. McKinlay (Dumbartonshire)

On a point, of Order. Some of us would like to take part in the Debate. Is not my hon. Friend the Member for Bolton (Mr. J. Lewis) travelling miles away from the point at issue in this Clause?

The Chairman

I am obliged to the right hon. Member. The hon. Member (Mr. Lewis) was doubtfully in Order, so far as he had gone, but in any event was going into the subject in too much detail. His arguments were in danger of going too wide.

Mr. Lewis

I appreciate your Ruling, Major Milner. The only way of introducing the matters I have in mind was in the terms of the Amendment as any other Amendment would have had the effect of increasing taxation and would have been out of order. I hope that my right hon. and learned Friend will reconsider the position, and in April will endeavour to bring all bookmakers into a general licensing scheme and will see what he can do about the horse racecourse totalisator at the same time.

Clause ordered to stand part of the Bill.