HC Deb 28 May 1952 vol 501 cc1489-97
Section fifteen of the Finance Act, 1948 (which imposes a licence duty on bookmakers operating at a dog race meeting, at which a totalisator is operated), shall have effect as if for the Table in subsection (1), there were substituted the following Table: —
TABLE
For a course where the public is admitted to A licence authorizing the bookmaker to carry on bookmaking in Amount of duty on the licence
1. 2. 3. 4.
A single enclosure The enclosures … £6 Where there are to be more races than eight at the meeting an additional amount of one-eighth of the amount in the third column for each race in excess of eight.
Two enclosures and no more. The cheaper enclosure … … £3
The dearer enclosure … … £12
More than two enclosures The cheapest enclosure … £3
The cheapest but one enclosure … £9
Any other enclosure … … £24

Brought up, and read the First time.

Captain M. Hewitson (Hull, Central)

I beg to move, "That the Clause be read a Second time."

I think that today is a very appropriate day for the discussion of this new Clause. This afternoon we had the greatest event that takes place in a line of sport which is sometimes called the sport of kings, but tonight I am attempting to move the heart of the Chancellor in the hope that he will give some concession to a sport that I would call the sport of the common man.

Each year, since this duty was imposed, I have consistently opposed it during the Committee stage of the Finance Bill, so that my intervention tonight is nothing new, but is merely carrying on a battle which was started when the duty was imposed.

For many years, bookmakers have been subjected to unjust criticism and Governmental action, and the duty that was imposed upon bookmakers' licences in 1948, or on certain sections of them operating on dog tracks, has been very heavy, and has put out of business very many bookmakers. Their numbers have been reduced from approximately 3,500 to fewer than 2,000—operating on dog tracks.

When that duty was imposed, my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall), who, at that time, was Financial Secretary to the Treasury, said: …it is quite wrong for the bookmakers to assume that the Tax is to come out of their present profits. The Duty is directed at the Betting Public and designed to ensure that Bookmakers operating on Greyhound courses shorten their odds by the 10 per cent., which has already been imposed on the Tote. The level of the Tax has been calculated very carefully with this end in view, and we think that the sums laid down are just about right fey the purpose which we have in mind."—[OFFICIAL REPORT, 6th May, 1948; Vol. 450, c. 1469.] 9.45 p.m.

The purpose which the Chancellor had in mind at that time was that the duty upon the totalisator would bring in about £10 million per annum, and, by imposing a duty worked out on a 50 per cent. basis, it would bring in from dog track bookmakers somewhere in the neighbourhood of £5 million per annum. The whole of that assumption has proved wrong. Never at any time has the duty imposed brought in anything like the figure that was estimated, and, as my right hon. Friend has suggested that the odds could be shortened, I would suggest that we ought to look for a moment at the mechanics of betting on dog tracks.

On a dog track, there are six boxes and six dogs. Three of the dogs are within the betting range with the public money going on them either to one or two dogs out of the three selections. How could a bookmaker start calculating how to cut the odds to fit in with the public mind on betting? I would refer hon. Members to their own ideas on betting in the last few days and to the result this afternoon, and would recommend them to reckon up their losses and profits.

The bookmaker, in cases like this, has to make a gamble, and, although my right hon. Friend suggested a levy on betting, can one visualise for a moment the case of a man making a bet with a bookmaker? Let us suppose that he has won £1 at the odds given, and that he goes to see his bookmaker, who tells him, "The kind Government has placed a 20 per cent. tax on this, so that your winnings are not £1, but 18s., and the Government gets the other 2s."What would happen to the bookmaker? The people who go to dog tracks are probably not so gentle as the people who patronise the sport of kings, and the bookmaker would promptly be knocked off his box.

The whole idea of collecting the tax from the general public by the bookmaker by some means or other was wrong. The bookmaker himself has to pay taxes, and when one looks at the range of the taxation on his licence from £5 to £48 per meeting, one can see that the taxation imposed here is very unjust and is out of proportion to all other ranges of taxation.

The argument that was used by my right hon. Friend at that time that this tax was to give equity with the Tote prompts me to ask that some measure should be used to give equity with the Tote. Tote taxation has dropped more than 40 per cent., and, to keep the thing on some level, if some concession was made on the previous argument of equity with the Tote, I think that would meet our case.

This taxation has been very harsh, and I should like to read to the Committee a letter from a man who has been put out of business. Bookmakers, like other people have to work for their living. [Laughter.] Hon. Members may laugh, but even we Members of Parliament say we work. Bookmakers have a trade union, and, to be members of that union, certain guarantees have to be given of integrity and honesty. Any man who becomes a member of that union is entitled to wear a badge, which will show immediately to the betting public that he has been accepted by this trade union or bookmakers' organisation, and that, by betting with him, their money is safe; and that counts for a lot with the betting public.

Let me read the letter to which I have referred. This man had gone out of business and they were asking him to return his badge. He wrote: Enclosed badge as requested. 1 had intended forwarding my last year's subscriptions before now but as you will be aware 90 per cent, of my betting has been on the dog tracks and I cannot stand this crippling betting tax the late Government imposed. At Wakefield I have paid £1,150 tax to earn myself £7 10s. and at Parkside I have paid over a thousand pounds tax to earn forty pounds. The bookmakers stop no tax from the punter on either of these tracks. One or two of us have had meetings to try and get the tax stopped from the public but to no purpose. Thanking you for past favours"— [Laughter.] He is not writing to me. He is writing to the secretary of his trade union. Although my own organisation caters for all types of working people from archbishops to grave diggers, we do not yet cater for bookmakers— Thanking you for past favours and I know how you opposed the tax as an association in every way that you could but the odds were too heavy. I remain, yours truly. That letter, although it causes some hilarity, embodies a tragedy, for this is a man who is going out of business, whose living has been taken away. [Interruption.] I think some hon. Member said "Good." I suppose that. must be the reaction of a Non-conformist mentality.

As to the mathematics of this tax, in the £48 ring—that is a man who has to pay £48 before he takes a penny bet—taking the ordinary run of dog meetings—six a week—that man has to pay over £4,000 per annum in tax before he takes a penny. That tax is unjust and requires some adjustment. We are not asking for the abolition of the tax. It may be argued that we have had a Betting Commission. that that Commission has made certain findings, and that at some time a White Paper or some form of legislation will be introduced covering the whole question of betting.

But I suggest it is wrong to wait until then. All we are asking for is common British justice, to remove something that was not really intended and which has been proved to be a failure from the very beginning. Tonight we ask that the Financial Secretary will give to dog track bookmakers the same taxation level as is imposed upon the totalisator.

Wing Commander Eric Bullus (Wembley, North)

The effect of this new Clause would be to halve the existing duty, and while I am sure that in all parts of the Committee there is sympathy with the case of the hon. and gallant Member for Hull, Central (Captain Hewitson), against discriminatory taxation, I feel that if the Chancellor does consider this proposal to amend the Finance Act, 1948, he should consider at the same time the 10 per cent. Pool Betting Duty which is peculiar to greyhound totalisators.

This new Clause was conceived after the 10 per cent. Betting Duty, and therefore I maintain that the 10 per cent. Betting Duty has an equal claim to be considered with this new Clause. I trust, therefore, that the Financial Secretary will consider the 10 per cent. duty.

Mr. Boyd-Carpenter

As the hon. and gallant Member for Hull, Central (Captain Hewitson) said, this is a very appropriate day on which to discuss a topic of this sort. As my hon. and gallant Friend the Member for Wembley, North (Wing Commander Bullus) has pointed out, this new Clause has the merit of complete simplicity. It aims at halving the various rates of licence duty upon bookmakers at dog tracks. I have had an opportunity of meeting a deputation on this subject, and that and the hon. and gallant Gentleman's speech have given us the fullest opportunity to go carefully into this matter. It is our desire, in imposing the very burden of taxation which generally has to be imposed upon the community today, to ensure that that burden falls as fairly as possible between one section of the community and another.

I think the only point that arises is whether this burden of licence duty is so out of line with other taxation as to justify giving it reconsideration. As the Committee has been reminded, this duty was imposed by the late Government in the Finance Act, 1948, as a deliberate counter-balance to the duty placed upon the totalisator at the dog tracks. Indeed, that is evidently the case, because bookmakers only pay this duty in respect of their operations on tracks where there is a totalisator. In the case of those small tracks where there is no totalisator, there is no duty imposed upon the book- maker who practices his profession there. Therefore, I think it is a fair inference that what was intended was to give fair betting so that neither the totalisator nor the bookmaker should gain because of the tax imposed upon the other.

That was a perfectly fair and reasonable approach to the problem, but of course it inevitably involves the factor which my hon. and gallant Friend the Member for Wembley, North mentioned —that it is very difficult to consider one at this stage without considering the other, because the aim undoubtedly was that these two rates should balance, and I have no doubt that considerable care was taken in making the calculation. Of course, it is a difficult calculation, because we are weighing on the one hand a tax on turnover, which is the way the tax falls upon the totalisator, with a lump sum licence duty for each evening's work, which is the way the tax falls upon the bookmaker.

In view of what the hon. and gallant Member for Hull, Central has said as to the decline in betting and the fact that the yield of the tax has not justified the anticipation which were held when it was introduced, I think it is material to look at what has happened to both sides of the tax—that is to say both aspects of betting upon dog tracks—because it is only in that way that one can satisfy oneself whether or not the two taxes are keeping roughly in parallel.

10.0 p.m.

It is undoubtedly the fact that the yield of both taxes—the yield on the totalisator and the yield on the bookmakers' licence duty—has disappointed the expectations of the late administration when they introduced them. It is the fact that in both cases the yield of the tax has tended to fall, but what is, I think, important in this connection is to note the way in which the fall in the yield of the tax has kept very substantially in parallel.

For example, in the year 1949-50 the yield from this tax, the bookmakers' licence duty, was £2,620,000, against a yield from the tote of £8,223,000; in the year 1950-51 the bookmakers' licence duty fell to £2,103,000, whereas the yield from the tote fell to £6,770,000; in the year 1951-52 the bookmakers' licence duty fell to just under £2 million, while that on the tote fell to just above £6,500,000. So the Committee will appreciate that the fall has been very much in parallel, and that the proportions have remained substantially the same.

That, I would submit to the Committee, indicates that there is not any real disparity in the way the tax has operated, and that its diminishing yield in both cases is probably attributable to the general fall in surplus spending which, in fact, has affected all forms of betting in recent years, with the curious exception of the football pools, which had a slight revival towards the end of last year. That does seem to indicate, I am bound to say, that the tax was originally assessed fairly as between the two forms of betting on dog tracks, and we should, therefore, 1 think, be very careful in considering any suggestion of altering the relationship of the one with the other.

Of course, I entirely agree with the hon. and gallant Gentleman the Member for Hull, Central that it is a very serious thing that any man should lose his job, and I certainly would not join in any laughter in hearing of any incident of that sort, and it is the fact—and the hon. and gallant Gentleman is perfectly entitled to take advantage of it—that the number of bookmakers on dog tracks has diminished—substantially, I think, to the degree which the hon. and gallant Gentleman indicated. However, there are, of course, one or two things we must bear in mind.

I think it is the case that most of the reduction has been in the case of part time or casual bookmakers, and I think it is also the case that some of them have not given up bookmaking as an occupation, but have practised that trade in connection with some other sort; and, therefor, though I do not underrate the importance of these men's jobs—I am far from doing that—I think we must have a certain sense of proportion in looking also at that aspect of the matter.

As to the cost of the proposal, the cost of this new Clause as it stands would be almost exactly £1 million a year. That is a substantial item, but the further complication inevitably arises, to which I have already referred, that if we were to do as the hon. and gallant Gentleman suggests, and halve the rate of this duty, there would be a very strong case for making something of a similar reduction in the duty upon the Tote. If that were done there would be a further additional cost to the Exchequer of, so far as we can calculate, something between £3 million and £4 million a year.

Captain Hewitson

The new Clause relates to bookmakers on dog tracks and has nothing to do with the Tote.

Mr. Boyd-Carpenter

The hon. and gallant Gentleman is quite right—there is nothing on the Order Paper on that point, but the fact that there is nothing on the Order Paper on that point really does not entitle hon. Members to dismiss from their minds what would be the logical consequences of taking this step which the hon. and gallant Gentleman is asking.

Here we have a case of two duties deliberately assessed so as to keep a fair balance between the one and the other. If we are going, as the hon. and gallant Gentleman suggests, to halve one, it really is a little unrealistic to dismiss from our minds the possibility—the probability—that we should be faced with a strong and not unjustifiable demand for taking the same action with respect to the other duty. Governments in the past have gone out of their way to link the two, and, indeed, it is a matter of obvious common sense.

Hon. Members cannot dismiss from their minds the effect upon the tote duty of taking this step with regard to the licence duty. If we are looking at this as a responsible Committee we are forced to look at it from the point of view that we are talking of a possible loss to the Exchequer of between £4 and £5 million a year, and I am afraid that in the present state of our economy that is the kind of figure which it is really not possible to contemplate.

I shall not enter into a controversy as to whether, if the money were available, it would be best given in respect of a reduction in duties upon betting—that is a matter on which hon. Members may have legitimate doubts—but it seems quite impossible in our present state of affairs to make a concession of this size with respect to the Betting Duty. Therefore, persuasively as the hon. and gallant Gentleman has put his case—I can assure him that he has said everything that can be said on the point—I am afraid that it is not possible for us to yield to his request.

Captain Hewitson

I beg to ask leave to withdraw the Motion.