Clause 3.—(RETURNS TO BE MADE BY PROMOTERS.) (Hansard, 13 April 1956)

§ Mr. Mulley
I beg to move, in page 4, line 41, to leave out "month of January next" and insert "third month".
I have been asked to move this Amendment on behalf of my hon. Friend the Member for Enfield, East (Mr. Ernest Davies). It is virtually a drafting Amendment, but has some substance in that, if it is carried, it will mean that returns will have to be made quarterly rather than on an annual basis. The reason for the Amendment is that the provisions of the law require prosecutions to be undertaken within six months of the offences being committed. If annual returns are made, it may be that it will be too late to undertake prosecutions after the offences are discovered. In order to regularise matters, therefore, I hope that the House will accept the Amendment.

§ Sir E. Errington
I beg to second the Amendment.

§ Mr. G. Thomas
I beg to move, in page 4, line 44, to leave out "a" and insert "an audited".

§ Mr. Deputy-Speaker (Sir Charles MacAndrew)
I think that the next Amendment, in the name of the hon. Member for Paddington, North (Mr. Parkin), might be considered with this one.

§ Mr. Thomas
This is not an unreasonable Amendment, as a return has to be made of these very large lotteries which could amount to £750, and as the character of the Bill has been altered by the substitution of £750 for £500, I think that the House would be right to ask that the accounts should be audited.

Mr. Watkins
I beg to second the Amendment.

§ Mr. Ede
In Committee, I moved an Amendment on the lines of that standing in the names of my hon. Friend the Member for Paddington, North (Mr. Parkin) and of myself, and since then the Home Office has been very helpful to us in getting it properly drafted. It is desirable, I think, to specify in what form the audit should take place. This Amendment ensures that it shall be an audit in respect of which responsible people will make themselves liable to a penalty if they do not carry it out in a proper manner. It is not desired that for some of the very smallest lotteries a chartered accountant or a person who might charge a substantial fee should be employed, but it is desirable that the public should have every assurance of good faith in the way in which their money is being handled.

§ Mr. Black
So far as I sense the feeling of the House, I do not think that there is any difference of opinion here as to the object which we want to achieve. The only point that may arise is what is the best and most convenient means of achieving that object. This matter was considered at some little length when a somewhat similar Amendment was moved in Committee. On that occasion, both 602 the right hon. Member for South Shields (Mr. Ede) and I very strongly supported the idea that there should be an audit.
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Probably the only question that is likely to arise in hon. Members' minds is as to what form the audit should take and by whom it should be done. I think that we were agreed in Committee that it would have been unreasonable to stipulate that it should be a professional auditor because a professional audit would involve the employment of qualified chartered accountants who would obviously have to be paid for the services they rendered. In the case of the small lotteries, I think that we felt that that would have been an unreasonable burden to impose. Whether the Committee would have taken the same view had the total permitted value been £750 when the matter was considered in Committee is, of course, another matter because the more we increase the total amount for which the lottery may be held the stronger becomes the case for having an audit of a qualified character by some one who is experienced in these matters.
I do not want to develop that paint at any length, because I do not think that, even with a figure of £750, to insist on a professional auditor would in all circumstances be reasonable. On the other hand, I am a little interested at the proposal that the audit must be carried out by two other members of the society. I see no objection to the audit being conducted by two individuals in preference to one. I think that there is good reason for that, which is quite a normal procedure, but why is it necessary that they should be members of the society which is to benefit from the lottery?
If, for instance, two perfectly experienced and competent individuals can be found who are willing to act as auditors but who do not happen to be members of the society, I cannot understand why we should put upon the society the obligation to find two individuals from its own membership and willing to undertake the duty when there may be two other individuals far more competent to do it but who do not happen to be members.
I do not know whether any information can be given to us for the exact reasons 603 for confining the auditors to the membership of the society which is to benefit from the lottery.

§ Mr. Ernest Davies
I think that the answer to the hon. Member for Wimbledon (Mr. Black) is contained in the Reports of the Standing Committee's proceedings. He will recall that there we had a discussion on this matter, and it was agreed not to press the Amendments which had been moved in order that there should be another examination of the problem and proposals brought forward.
The proposals contained in the Amendments in the names of my hon. Friend the Member for Paddington, North (Mr. Parkin) and my right hon. Friend the Member for South Shields (Mr. Ede) are a result of discussions which have taken place in order to try to devise a way whereby the accounts are presented in a form which can be accepted and considered as accurate. It is thought that to insist on a full audit will be unduly onerous on the many small voluntary societies which wish to take advantage of the Bill. The inclusion of the word "audit" rather implies that there is to be a full audit which would, in our view, be too onerous on the small societies.
As we have frequently stated during our debates on the Bill, the main purpose of the Measure is to assist the small voluntary societies. Many of these are very small indeed. If they are put to the trouble of having a full audit for every one of their lotteries, or periodically even for their lotteries, then they will be put to considerable expense, inconvenience and administrative cost, and I suggest that the proposals which are in the Amendment in the name of my right hon. Friend are adequate to meet the case. Perhaps the Home Office would be so good as to give us its advice on this matter, and an indication of whether it does not consider that the Amendments in the name of my right hon. Friend are adequate. I think that it would be helpful to the House if the Parliamentary Secretary could give us his advice.

§ Mr. Deedes
I am very glad to give the advice asked for by the hon. Member for Enfield, East (Mr. Ernest Davies). In our opinion, the necessity of a full audit in the manner proposed by one 604 Amendment would be unduly onerous on many small—and I stress small—voluntary societies which wish to take advantage of the Bill. There will be many small societies to which the Bill will become applicable. In our opinion, the Amendment in the name of the right hon. Gentleman the Member for South Shields (Mr. Ede) very adequately meets the situation which we require to cover. That is the Amendment which we would recommend hon. Members favourably to consider.