PEPPIATT REPORT

HC Deb 23 May 1960 vol 624 cc38-107

3.34 p.m.

Mr. Eric Johnson (Manchester, Blackley)

I beg to move, That this House takes note of the Report of the Departmental Committee on a Levy on Betting on Horse Races. I think that it would be right for me to begin by thanking the Government for appointing this Departmental Committee, generally known as the Peppiatt Committee, and by congratulating Sir Leslie Peppiatt and his colleagues on the speedy way in which they completed their task. Before referring to the Report of the Committee, it might be as well to try to answer in advance a question which may be in the minds of hon. Members and people outside, namely, why should there be a levy on betting to help racing, or—as it is sometimes quite erroneously put—why should bookmakers be called on to subsidise owners?

Racing is a traditional feature of our national life and provides entertainment for millions of people. As the Report points out: interest in horse racing is not confined to one section of the community The same could be said of cricket and football, but it costs very much more for the public to go racing than it does to go to those games. It costs£3 to go to Tattersalls at Epsom, on Derby Day, but to get similar accommodation at a Test Match at Lords would probably cost£1 and a similar seat at the Cup Final at Wembley would cost 25s.

Up to 1939, racing was financed by people who were able to do so as a hobby. Today those people have largely disappeared. Owning racehorses is, and no doubt always will be, an expensive amusement. No sensible person would ever go into it in the hope of making money, but owners in this country are at a very big disadvantage compared with owners in countries like France, Ireland and the United States.

It is not only owners who are at a disadvantage. The amenities for the general public at most of our racecourses leave a very great deal to be desired. The accommodation is worse and the admission charges are much higher than in France, for example, where there is about the same amount of racing. That is not the fault of the racecourse companies. Few of them can afford to make the improvements which are so badly needed. The explanation is that the amount of money ploughed back into racing from betting in this country is negligible compared with the revenue derived from the Totalisator, or the PariMutuel, as it is called in France and the United States.

The answer to the question, why should the bookmakers be called on to subsidise owners, is that they are not asked to do anything of the kind. Off-the-course bookmakers are simply asked to make a reasonable contribution to racing and thus to make it possible for more people to go in greater comfort to watch the sport which provides a living for thousands of bookmakers, most of whom pay nothing at all towards it.

Last year, bookmakers on the course paid about£450,000 to the racecourses. I understand that they also gave£12,000 to the Jockey Club to defray the cost of ring officials, but the course bookmakers are only a small proportion of the total number of bookmakers. Off-the-course bookmakers do the greater part of the business, but all that they were able to contribute was about£60,000 to the Racecourse Amenities Fund. According to the Churches' Committee on Gambling, it is estimated that last year£365 million was staked on racing in this country. The Tote turnover came to£28½million, from which it would appear that bookmakers have a turnover of£336½million. The Peppiatt Committee puts the figure at£200 million, based on figures given in the Report of the Royal Commission ten years ago. I am certain that the turnover has increased since then very largely because of the many races which are televised.

I want to make it quite clear that I am not setting out to attack the bookmakers. I should be very sorry indeed to see them disappear from the racecourses. But I do not think that off-the-course bookmakers should be able to make an income from an industry to whose costs they contribute virtually nothing. It is only fair to say that any bookmaker which whom I have discussed the matter believes that it is perfectly right that a contribution should be made. They are quite willing to make a contribution.

To anyone who disagrees with that idea I should like to point out that bookmakers cannot continue to operate in horse racing unless there are people who are willing to own race horses. The owners can get on perfectly well without the bookmakers; indeed, they get on a great deal better without them in such countries as France and the United States, where there is a Tote monopoly. So, for that matter, does the punter. It costs three times as much to go racing in England as it does in France. The admission charge to the Grand Prix at Longchamps, in the equivalent of Tatter-sails, is 8s. and, as I have said, it costs£3 to go into Tattersalls on Derby Day.

The unfavourable position of the owners in this country can readily be seen by looking at the amount of prize money given, seeing who puts that money up and comparing that with France and the United States. I do not want to give a great many figures. It is enough to say that the average value of a race in the United States is£920, in France£800 and in this country£720. The percentage of the stake money provided by the owners is about 5 per cent. in France and the United States and about 35 per cent. in this country. In racing, under National Hunt Rules, it is over 50 per cent.

May I say, once again, that owning racehorses is a hobby and that owners do not expect to make racing pay, but, for all that, in France an owner can expect to recover about two-thirds of his racing expenses in prize money, while here the best he can hope for is between a fifth and a quarter.

Before I leave the question of the need for a levy, I should like to say something about the trainers' position. In paragraph 13 of the Committee's Report we read: Some trainers were said to be losing money. I should not be far wrong in saying that nearly every trainer is losing money from the point of view of the training fees which he receives for the horses in his stables. It is the normal practice for a trainer to receive so much a week for each horse he trains and also to receive 10 per cent. of the stake money won. It is roughly correct to say that a trainer's costs have risen by about three times since before the war and his training fees have about doubled.

There are very few trainers who get enough out of the 10 per cent. to make their stables a paying proposition. They have to rely more and more on betting and hoping to be successful, and on dealing, to make both ends meet, and that is most undesirable. Owners can rarely pay more, because the stakes they can hope to win are so low. If a trainer puts up his fees he runs the risk of the owners reducing the number of horses they have in training. The recent increase in stablemen's wages has made the position worse, and yet I do not believe even now that the wages are high enough to attract the best type of boys into racing, and that is most certainly not the trainers' fault.

Paragraphs 7 to 11 of the Report refer to the position of the breeders. I do not want to say much about that, but I would add that during the last fifteen years an increasing number of our best races have been won by foreign horses, which is largely due to the fact that more and more of our best stallions and mares are being exported. These are the horses which ought to be kept at home if we are to be able to breed the winners of our own best races and thereby to maintain the position of British bloodstock.

Mr. Marcus Lipton (Brixton)

There are no figures to support that.

Mr. Johnson

I could give the hon. member a great many figures. We are exporting too many of our best horses, and I can tell the hon. Member afterwards the names of the horses. The breeders cannot keep those horses at home unless racing is much more prosperous than it is, and racing will not be prosperous until more money is ploughed back from betting.

As I have been trying to show that there is a need for a levy, I need hardly say how much I welcome the Committee's conclusion that a levy is desirable. Coming to paragraph 23 of the Report, however, I am by no means convinced of the Committee's arguments against a levy being based on turnover. The Committee points out that after the Betting and Gaming Bill becomes law the position will be very different from that in 1926, when there was a tax on turnover which met little success. In point of fact, the bookmakers succeeded in sabotaging it. But there was no Totalisator in 1926, and any attempt to do the same thing today would, I think, be dealt with in very short order.

There is another argument against a levy on turnover. The Report says that because of the nature of betting transactions, opportunities for evasion of the levy on stakes would be widespread. Surely similar considerations apply to a levy on profits. I do not see how profits can be calculated without knowing the amount which is staked. Be that as it may, the fact remains that a levy on turnover works perfectly well in Ireland in the case of both on and off-course bookmakers and of the Tote. In any case, I think that, in this connection particularly, a levy on profits will be very difficult indeed to define.

It may well be that when the figures of the profits for the classification of bookmakers are received, it will then appear that, so far from being the avaricious and opulent people that they are generally supposed to be, we shall find by their small profits that bookmakers are simply philanthropists who seek no reward to themselves but who are just providing opportunities for backers to lose their money. If a tax on turnover is found to be unacceptable, it would, in my view, be very much better to base the levy on the number of a bookmaker's employees rather than to try to make these very difficult calculations about profits.

Although, on the question of the tax on turnover, I am only very dubious about the Committee's proposals that the tax should be on profits, I disagree absolutely and entirely with the first sentence of paragraph 29 of the Report, which reads: We were not satisfied that£3 million is a realistic assessment of what is needed or, for that matter, of what bookmakers can reasonably be required to provide. I was very disappointed when my right hon. Friend the Under-Secretary of State, in answer to the hon. Lady the Member for Leeds, South-East (Miss Bacon), on 3rd May, said something which appeared to indicate that the Government were disposed to accept the Committee's figure of£1 million to£1¼million as being about right for the bookmakers' levy.

As regards what is needed, I believe that the figure of£3 million given by the Jockey Club is an absolute minimum. As regards the amount bookmakers can be reasonably required to pay, I draw the attention of the House to the position in Ireland. In Ireland, in 1958—these are the last figures I have available—the bookmakers' turnover was£14,684,000. On that turnover they paid£1,024,000 to the State and to the Racing Board.

Yet we are told by the Committee that it is unreasonable to expect bookmakers in this country to contribute£3 million when their turnover is estimated at£300 million. Also, I find it very hard to believe the Committee's figure that 87 per cent. of all bookmakers make less than£3,000 a year. That is the information the Committee obtained from the Bookmakers' Protection Association. I am certain that the big firms at the top end of the scale would be getting off very lightly indeed with a levy of£2,250. The bookmakers should contribute very much more than the Report proposes. The only bookmaker with whom I have had an opportunity to discuss this agreed at once not only that bookmakers should contribute more, but that they could very easily afford to do so.

The Report says nothing about taxation. That is probably due to the terms of reference. It is not clear whether the figures in paragraph 40 refer to gross profits or net profits. Perhaps my right hon. Friend will tell us. It will be generally agreed that the Tote and bookmakers should be treated alike as regards taxation. Last year it was decided on an appeal to the House of Lords that payments by the Racecourse Betting Control Board to help horse racing, horse breeding, veterinary science and education under the terms of the 1928 Act were subject to tax. If bookmakers are allowed to charge the levy paid as a business expense—it seems to be generally thought that that will be the case—it would be quite wrong to say that the Tote has to pay tax on the amount distributed from that source.

Paragraph 51 of the Report says, I think very rightly: We suggest that it would be necessary by Statute to impose the levy in general terms and to set up the Central Board and the Bookmakers' Levy Board. The Tote Board exists already. To treat the Tote Board in the same way as bookmakers, it would seem that a statutory levy based on Tote turnover should also be imposed on the Tote Board, which would, in turn, have the duty of passing this on to the Central Board for distribution, as suggested in paragraph 50.

That levy then would be chargeable in arriving at the taxable surplus of the Totalisator Board, just as the bookmakers' levy would be a deduction in the assessable income of each bookmaker. The Central Board, which would receive the levy paid by bookmakers and the Tote, would not be carrying on a taxable trade, but would be acting as trustees for the distribution of the money received, so it would not have to pay tax on the levy. Whether the ultimate beneficiaries paid tax would depend on circumstances in each separate case.

What I believe is essential is that the Tote Board should be made quite independent of the Central Board, just as the Bookmakers' Levy Board is independent. If it is not made absolutely clear that the Tote Board is not just an executive wing of the Central Board, there will be a danger, because of the Central Board's association with the Tote Board, of it being looked on as carrying on a taxable trade, which is not the intention of the Report.

The Report suggests in paragraph 45 that the Central Board should consist of a chairman appointed by the Home Secretary, representatives of the Jockey Club and the National Hunt Committee, the chairman of the Bookmakers' Levy Board and the chairman of the Totalisator Board. There has been some criticism of this proposal on the ground that, if the donors are represented, as they are, the beneficiaries should also be represented. That would mean that the Racehorse Owners' Association Ltd., the Thoroughbred Breeders' Association, and the Racecourse Association Ltd. should all provide a member of the Board.

I agree with the principle that if either donors or beneficiaries are represented both should be, but there is a very great deal to be said for keeping the Central Board small and unbiased. As I believe that it will have a task to perform which is very similar to that carried out successfully by the Totalisator Board for over thirty years, it might well be modelled on the lines of the Totalisator Board, though perhaps reduced in number.

The composition of the Tote Board is as follows: chairman and another member appointed by the Home Secretary, three members by the Jockey Club, two by the National Hunt Committee, and one each by the Secretary of State for Scotland, the Minister of Agriculture, the Racecourse Association Ltd. and the Committee of Tattersalls. In forming the new Central Board, I would start with that composition. I should strike out at once the representative of the Racecourse Association Ltd., as that body is a beneficiary.

I cannot see that it is in the least necessary for the Committee of Tattersalls to be represented. Is there any need for four members as well as the chairman to be appointed by Ministers? It might be enough if the Home Secretary appointed the chairman and gave up his right to appoint another member. I do not mean any disrespect to Scotland, but I do not think that a member appointed by the Secretary of State for Scotland is altogether essential. I believe that the chairman certainly should be full-time and paid.

Paragraph 55 of the Report seems to need clarification. I hope that when legislation is introduced to implement the Committee's proposals it will be made quite clear, in the first place, that the Central Board alone will be responsible for making proposals to the Home Secretary as a result of the yearly review and, before doing so, the Levy Board will have had the opportunity to express its views to the Central Board. Secondly, it should be made equally clear that the Home Secretary will have the power to vary the amount of the levy as circumstances require.

My final point, which is very important, concerns the Committee's timetable. My right hon. Friend the Joint Under-Secretary told the House recently that the Government intended to give legislative effect to the Committee's proposals at an early opportunity and in sufficient time to enable the Committee's timetable to be followed." —[OFFICIAL REPORT, 3rd May, 1960; Vol. 622, c. 885.] The timetable is Appendix II to the Report. I hope that my right hon. Friend's statement does not mean that it is intended to stick to the timetable exactly as it is set out by the Committee. I cannot understand, and no one with whom I have discussed this matter can understand, why it is necessary to wait until 1962 for the first payment of the levy. Why should not the amount to be paid be worked out on auditor's certificates based on the profits for the year ending 31st March, 1961, instead of waiting for another year? That is quite unnecessary.

Our thanks are due to Sir Leslie Peppiatt and his colleagues for producing what I believe to be at least the framework of a very reasonable plan for a contribution from betting to help racing. I hope that my right hon. Friend will give serious consideration to the levy being based on turnover rather than on profits —or, perhaps, on the number of the bookmaker's employees. Even more, I hope that he will not feel bound to accept the quite inadequate figure of£1 million to£l¼million as a reasonable amount for bookmakers to provide.

If my right hon. Friend does accept that figure, those who, like myself, feel that it is quite inadequate must console ourselves, I suppose, with the thought that it is subject to annual review; that, at any rate, a start is being made; and with the hope that my right hon. Friend will agree that there is no need to wait until 1962 before acting.

I hope that there will be no delay in bringing forward the necessary legislation, but I would emphasise that although Parliament can give legal force to a plan for a levy on betting, whether or not it works will depend to a very large extent on the good will and cooperation of the off-the-course bookmakers. If they are not willing to help, there is a perfectly good alternative, but I hope that they will realise that it is in their best interests, as it is in the interests of everyone connected with racing, that this plan should succeed.

4.2 p.m.

Mr. Marcus Lipton (Brixton)

Those who are interested in racing will be indebted to the hon. Member for Manchester, Blackley (Mr. E. Johnson) for choosing this subject, following his luck in the gamble for Private Members' Motions. I interjected during his speech to comment on the lack of information relating to the export of an excessive number of top-class horses. He said that he had figures to prove that to be a fact.

It is clear from the Report of the Peppiatt Committee that, despite all the resources it had at its disposal, it did not have that information. In paragraph 9 of its Report it refers to the fact that it was told that top-class horses, valuable for breeding, are being exported in too great a number. We attempted to estimate the volume of exports of thoroughbred horses but it is not nossible to do so with any accuracy. The Committee goes on to say that the official statistics do not differentiate between thoroughbreds and other horses and ponies, or between bloodstock of the highest quality and horses sent to the Continent for slaughter. It was, therefore, not possible for the Committee, on the information available to it, to say whether or not bloostock is being exported in excessive quantity—

Mr. E. Johnson

Perhaps I can help the hon. Gentleman. Nasrullah was sold for£132,000, and Royal Charger for£90,000—both to the United States; Tulyar was sold to Ireland for£250,000. Kerkeb was sold to the United States for£20,000. Blenheim, Mahmoud and Bahram, all Derby winners, went to the United States, and Fair Trial Respite, a yearling, also went to America, for£18,000. I could give the hon. Gentleman details of a lot of other sales of this type.

Mr. Lipton

But that is over a fairly long period of years. I agree that if all those exports took place in one year it would be a very disastrous prospect—

Mr. George Wigg (Dudley)

I must tell my hon. Friend the Member for Brixton (Mr. Lipton) that there is only one Derby winner a year.

Mr. Lipton

But the hon. Member for Blackley referred to other horses besides Derby winners. In any event, that is still no proof of the assertion that top-class horses are being exported in too great numbers. If there was any such evidence, why did not the Peppiatt Committee have it placed before it? If the evidence was placed before it, why did the Committee not come to the conclusion to which the hon. Member for Blackley and my hon. Friend the Member for Dudley (Mr. Wigg) seem to have come already on the basis, presumably, of better information? They must have better information than the Peppiatt Committee had.

If that is so, it is a great pity that that Committee was not provided with the required information on this very important subject. As a consequence, it came to the conclusion, in paragraph 18: We do not feel that we are justified in expressing a general opinion whether there has been any deterioration in British bloodstock. Whether or not the exports to which the hon. Member for Blackley has referred are excessive, the Peppiatt Committee remains unconvinced that there has been a consequent deterioration in British bloodstock.

The hon. Member did not mention a very important matter put forward to the Committee. He did not refer to the increasing tendency to syndicate stallions, and the suggestion made to the Committee that the most likely way in which to retain stallions for British racing was through the National Stud. Why cannot the National Stud exert itself a little more in this direction, if further exertions are required?

It has been pointed out that it has not hitherto been possible for the National Stud to build up a reserve fund that could be used when a top-class stallion came on the market, but if it is necessary to retain top-class British stallions in this country there is no reason at all why the National Stud should not be provided with the necessary facilities to enable that to be done, and to prevent British bloodstock being exported to such an extent as to result in the deterioration of the bloodstock left here.

The hon. Member then referred to the plight of the racehorse owners. I cannot say that my heart bleeds very profusely for them. The hon. Gentleman said more than once that racehorse owning is a hobby. I wonder whether the Inland Revenue authorities regard it exclusively as a hobby. How many racehorse owners submit returns to the Inland Revenue showing that they incur a loss on their owning activities? The available figures do not, of course, provide any indication of the incomes of British owners, but I should guess that most of them have an income of at least£5,000 a year. If anyone tries to be a racehorse owner on less, he will find things a little difficult.

Assuming that the owner has an income of just over£5,000 a year and incurs a loss on his owning, what does it mean? The man with an income of between£5,000 and£6,000 pays tax at the rate of 5s. 6d., and when, to that, is added the standard rate of tax he pays 13s. 3d. That means that two-thirds of what he loses in maintaining a horse throughout the year is paid for by the Exchequer. It is, therefore, not true to say, as was argued by the Racehorse Owners' Association, that it costs the owner an average of£638 a year. That may be the gross expenditure—I do not challenge it—but if two-thirds of that loss is set off against the racehorse owner's tax liability, the net cost to him of his so-called hobby is about£200 a year.

Mr. E. Johnson

The hon. Gentleman cannot get away with that one. Does he not recall the case before the war, of the late Lord Glanely, who was not even allowed to charge the cost of his racehorses against the cost of his stud farm?

Mr. Lipton

There we have another example in which the most up-to-date case that can be produced by the hon. Member for Blackley is something that happened before the war. I should like to know what is the current practice of the Inland Revenue, and someone who owns a racehorse, and who is not allowed to set off his racehorse owning losses against his other taxable income, to provide evidence of it. If that is done, I shall gladly withdraw my statement.

Mr. John Farr (Harborough)

May I give the hon. Gentleman some fairly up-to-date information? I have owned racehorses for some time. I have regularly made an annual loss. The actual annual cost of keeping a racehorse in training today is nearer£1,000 and at no time have I ever been permitted to place any of my losses against Income Tax.

Mr. Lipton

Then I withdraw the statement because of the up-to-date evidence provided by the hon. Member —the unfortunate hon. Member opposite —who has been having such a rough time. He must from now on be regarded as a public benefactor as well as a private Member.

The other point to which the hon. Member for Blackley kept referring was this. He said that the bookmaker ought to pay this, that, or the other. I shall not argue with him about the amount which he thinks the bookmaker or the bookmaking fraternity ought to pay towards the maintenance of racing, but surely it would be more frank to admit that the bookmaker, whatever scheme the Government devise on the basis of the Peppiatt Committee's recommendation, will not bear the cost of these extra charges which he will have to pay by way of levy. They will be charged to the punter, who will, as usual, have to pay for the lot. Therefore, we do not need to waste very much time on that aspect, because the fact remains that the punter, the general public, will pay, in the long run, for all the fun and games.

I suggest, therefore, that in considering the method of allocating the money to be raised by this levy it is the general public who ought to be given the primary benefit. If, for example, it is decided that£1 million, or thereabouts, should be raised from the bookmaking fraternity, who will act as collectors for the racing industry from the general public, it is hardly worth while to divert£250,000 of that money to the racehorse owners. According to figures that have been provided by the Racehorse Owners' Association, the total deficit, including the National Hunt figures, is about£4 million a year.

The hon. Member for Harborough (Mr. Farr) and those who share with him the dubious honour of being racehorse owners are, between them, bearing a loss of£4 million a year. Even if the Peppiatt Committee's recommendation on this aspect is accepted, we shall be giving to this section of the community which is losing£4 million a year a paltry£250,000 a year, which will not make all that difference to them. I would ask the hon. Member, who has had an unfortunate experience as a result of owning racehorses, whether that small percentage will make any difference, whether it will induce him to give it up as a bad job or to carry on. The sum of£250,000 towards a total loss of£4 million will not influence the attitude of racehorse owners very much one way or the other.

The hon. Member for Blackley left me in doubt as to how trainers continue to carry on at all, except by some form of betting and other activities which he did not very clearly specify. Of course, that is an unsatisfactory state of affairs and, therefore, if racehorse trainers and their staffs are to be allowed to earn a living wage in a respectable sort of way, perhaps something ought to be done to help them.

The fundamental point of the Peppiatt Committee's Report is referred to in paragraph 19. That paragraph is, in my view, the crux of the whole matter. Without it we could not really come to a proper decision. It says: It is not our view, however, that without a subsidy horse racing will rapidly decline or die. That is clearly not so. If the Peppiatt Committee has come to that conclusion, I shall not dispute it. It is in the light of that very important conclusion that we should decide what, if anything, ought to be done about the Report. May I say, once again—

Major W. Hicks Beach (Cheltenham)

The hon. Gentleman has referred to paragraph 19. If he wants to be fair will he read the concluding sentence?

Mr. Lipton

It does not upset me to read the last sentence. It says: Weighing the evidence as a whole, we consider that a levy is desirable.

Hon. Members

Read on.

Mr. Lipton

I have read the last sentence. How much more do hon. Members want me to read? I will read the whole Report if that is the wish of hon. Members who have not read the Report themselves. I am entitled to be as selective in my approach as the hon. Member for Blackley was in moving the Motion, and as, no doubt, other hon. Members will be in the course of their arguments. Whether the levy is desirable or not, the fact remains that there is no evidence that without a subsidy horse racing will rapidly decline or die. It is in the light of that overriding consideration that I would ask the House to consider the subject matter of the Motion.

4.20 p.m.

Mr. James Dance (Bromsgrove)

I congratulate my hon. Friend the Member for Manchester, Blackley (Mr. E. Johnson) on bringing this very important subject before us today, and also on the very clear and lucid way in which he took us through the Peppiatt Report and explained why this money is required for racing.

I do not wish to detain the House for long, but I should like to refer to this matter as it relates to a racecourse. I must declare my interest in that I am a director of a racecourse. I feel that the executives of racecourses have three duties to perform. The first is to provide the finest racing that they can; the second is to see that the public are given the best amenities and are able to go racing at a reasonable cost; and the third is that when those two requirements have been satisfied they must see that the shareholders are allowed a reasonable return on their money.

To have the best racing, we want a good many runners, and to attract the runners one has to offer an inducement to owners to run their horses, through good stake money, good prize money and travelling allowances. Next, one must ensure that there is good going. Last summer, many races were carved up because the going became so hard. In Birmingham we are today going into the whole business of how we can water the course. It is not a simple matter. One cannot just water the course. One has to find the water in the first place. We may have to sink a very expensive borehole, and we may, possibly, have to put in a purification plant to be able to use water from a very murky river called the Thame which, at present, would certainly kill the grass if we used the water direct.

Finally, one must ensure that racing is fair. For some time there has been in use in America a new system employing two cameras, one straight down the course and one at an angle, covering the last three furlongs of a race. If there is any trouble, the stewards can, within three minutes of the end of the race, I think, call for the film. I am told that this has done a tremendous amount in ensuring that there is cleaner race riding in America than before the system was introduced. We wish to use this system in Birmingham. In fact, we shall use it at three of our major meetings this summer. But it will cost£150 a day—a lot of money on top of everything else. We are charging the general public far too much for admission. We have to do it. I am sorry to say. For example, to enter the Tattersalls ring, at Birmingham, the punter has to pay 22s. 6d., whereas to enter a similar ring in France he pays only the equivalent of 7s. 6d. Moreover, our amenities are not all that good. We have spent£105,000 on improving stands and other amenities since the war, but this has really been no more than nibbling at the problem. We want a great deal more money, because I think that the public are entitled to have these things done. They will, I think, go racing much more if the amenities are improved.

There are 72 racecourses in the country, only nine of which make a profit of over£10,000 per annum, which represents only 8 per cent. on the capital employed. The remaining 63 courses average only 2½per cent. of the capital employed, so the average earning is 4 per cent.—ridiculously low when one considers it in comparison with other industries and enterprises.

I should like the House to have a few figures actually from Birmingham. I refer to Birmingham because I know it, although I appreciate very well that the same problems and situations arise at most racecourses throughout the country. Those who are not well acquainted with the subject may be rather surprised to know that we spend£15,000 on maintenance, just keeping the course going each year. That is quite a lot of money. It costs£1,500 to stage a day's racing, that is to say, before one person has been through the turnstiles and, of course, before any prize money is paid out.

That sounds a lot of money, too, but when one considers, for instance, that we pay£150 for police on every day of racing, one soon realises why the figure is so great. If, as so frequently happens in the winter, a day's racing is stopped by fog or frost, that£1,500 goes straight down the drain, unless one insures, as we do; but the premium is very high indeed to cover that risk.

It might be convenient to the House if I give the breakdown to show how£1 of takings is distributed. The£1 goes in this way: 7s. towards prize money; 7s. 1d. to the meeting expenses; 3s. to overheads; 1s. 6d. to taxation; 10½d. to dividend; 4d to reserve; 2d. to directors' fees and expenses. It can be seen that we are not greatly extravagant in the way we attempt to run our course. I hope that those figures are of value to hon. Members in considering this matter.

I feel that the off-course punter and the off-course bookmaker should contribute towards racing. The first point I made, improving the quality of racing, surely affects them just as much as it affects the man who goes along and pays through the turnstile. The off-course people want a good fair day's sport. They get it, but they pay nothing or very little towards it at the moment.

I pay tribute to the on-course bookmaker, however, who pays quite a large contribution towards racing inasmuch as he pays five times the normal admission charge for whichever ring he works in, and, of course, he pays for his staff in addition. The on-course bookmaker makes a good contribution towards racing. I pay tribute, also, to the Tote, the Racecourse Betting Control Board, which helps us a lot. Last year, it contributed£7,500 towards racing at Birmingham. Without that money we could not have met our balance. In addition to a direct contribution of that kind, of course, the Racecourse Betting Control Board pays charges for its staff who go to race meetings.

I welcome the Report because I believe that it will give extra support to racing. I hope that the "Peppiatt Racing Contribution Stakes" will be run at a much earlier date than is envisaged today.

4.26 p.m.

Mr. R. J. Mellish (Bermondsey)

I do not propose to detain the House very long. I recognise that those who wish to speak on this subject, particularly my hon. Friend the Member for Dudley (Mr. Wigg) and some hon. Members opposite, are experts in this matter, but I must say, quite frankly, that the view I wish to put may well be different from the view which will be expressed generally.

When the Peppiatt Committee was first set up, as we know, the Betting and Gaming Bill was going through the House, and many of us thought that final decisions on the Bill should not be taken until we knew what the Peppiatt Committee had in mind. I hold the view—it is a personal one—that there is a tendency on the part of some hon. Members in the House and outside to wish to destroy the bookmaker.

The hon. Member for Bromsgrove (Mr. Dance), speaking as someone concerned with a racecourse, gave the example of prices of admission in this country and in France. When such examples are given, I think that it should be mentioned—I suspect that it was deliberately not mentioned—that in France the Totalisator has a complete monopoly and there are no such people as bookmakers according to the general understanding of the name in this House.

It would be a very tragic day for British racing if the bookmaker were to be dismissed from the racing scene. I go racing very rarely for the simple reason, as I have said before, that I cannot afford it. I wish I could afford it; I should go far more often if I could. In my view, the greatest thing about racing, apart from finding out what the horses are and watching them running, is the animation of the bookmaking, the great excitement one has in going round and trying to see whether one can get a better price from one bookmaker as opposed to another. I think that I speak for many ordinary people who go racing when I say that the real excitement and pleasure of a meeting is had not from a cold-blooded Tote, but from going round and trying to get the best value for the particular horse which one fancies.

I understand that it has now been decided that, at long last, the bookmaker is to bear his share of a contribution towards the sport which provides him with his living. This was the idea behind the setting up of the Peppiatt Committee. I wish to put it on record that I myself am very glad indeed that we have had an indication from the Government that the Report of the Peppiatt Committee as it now stands will represent the conclusions of the Government. I should certainly oppose any higher contribution being made by the bookmaker.

Turnover figures have been mentioned. A total of£200 million was given by the hon. Member for Manchester, Blackley (Mr. E. Johnson). I am not in a position to give figures, but I believe it to be right that bookmakers, after receiving bets, do sometimes lose. Believe it or not, the punter sometimes wins and, therefore, when we talk about total turnover, we must remember that some of it must go back to the punter. Otherwise, he could not carry on betting. I appre- ciate that there are prosperous bookmakers—probably most of them are; I would not deny it—but we ought to make it quite clear, whenever we give these figures in the House, that we are talking about figures of net profit.

I should like to make this suggestion. I have read about it a lot and I think, on consideration, that it is practicable. I entirely support the hon. Member for Bromsgrove. Racecourses are entitled to more money than they are getting. They are entitled to provide better amenities for the public and better prizes for winning owners. I accept all that. My view —I do not know whether it is generally shared—is that there is a great deal to be said for the suggestion that the racecourse of which he is a director should be allowed to run its own tote.

The Racecourse Betting Act, 1928, is not something which we must never look at and discuss again. I do not deny that the Board has done a great job, but I believe that there must be more racing in this country. Racecourses must be given the chance to earn more money. They should be given the opportunity to operate their own totalisators, with certain moneys paid direct to the Jockey Club, and, if necessary, certain money paid to a charities fund.

Mr. Dance

We in Birmingham have gone into the question of running our own tote. We were absolutely dead against it. The Betting and Gaming Bill will make off-course cash betting legal. For the life of me, I do not see how a racecourse can run an off-course Tote. It would not have the facilities. We think that it is better that the matter should be left in present hands, but on a modified basis.

Mr. Mellish

We do not want to get confused. The Tote at Birmingham could be operated by a staff controlled by but loaned to the Birmingham racecourse authorities. It could be a hand-operated Tote. The Birmingham authorities could make a profit, which they are not making at the moment because they do not run the Tote, which could be used for the benefit of racing.

Mr. Dance

Is the hon. Member talking about an off-course Tote?

Mr. Mellish

I am talking about a Tote on the racecourse itself run by the owners of the racecourse.

Mr. Arthur Lewis (West Ham, North)

What my hon. Friend the Member for Bermondsey (Mr. Mellish) is suggesting happens in greyhound racing.

Mr. Mellish

I do not want to get tangled up with greyhound racing. I have enough to contend with as it is.

I believe that my suggestion is practicable. I was told that one great argument against it, however, was that the small track would find it very difficult to operate its own tote. I do not know whether the Government have considered this point. It may be an amateurish point of view, but if we are mainly concerned, as the Peppiatt Committee was concerned, with the future well-being of racing, we have seriously to ask ourselves what other means there are of getting more money for running racecourses. This is a principle with which I agree.

I do not believe that£1½million will be any hardship on bookmakers, but it is a beginning of what, in a few years' time, might be a rather sad story for British racing. If there is a genuine attempt—and I think that there is—to drive the bookmaker out of racing, I believe that Britain will regret it very much. During discussion of the Betting and Gaming Bill there was an attempt to destroy the bookmaker in the street. The right hon. Gentleman the Joint Under-Secretary of State knows my view about that. I hope that it will go out from this House that, unless we are careful, we will have seen the last of the bookmaker on British racecourses.

4.34 p.m.

Sir Hendrie Oakshott (Bebington)

I am sorry that the hon. Member for Brixton (Mr. Lipton) has left the Chamber, because there are one or two things which I should have liked to say to him. Perhaps he will return during my speech.

On the Second Reading of the Betting and Gaming Bill, I said that I would regard it as a very incomplete Measure unless provision were included in it for the attraction of money from betting into racing. By the time of Second Reading, my right hon. Friend the Home Secretary had already set up the Committee under Sir Leslie Peppiatt, and it must, I suppose, have quickly become clear that the apparently simple terms of reference of that Committee masked a problem of very great complexity.

Having read and studied the Report, it is only fair that I should say that I fully accept that it has raised matters which require a great deal of thought and consideration and, I imagine, very considerable drafting difficulties. This has made it virtually impossible to include provision to give effect to the findings of the Committee in the Betting and Gaming Bill in the present Session of Parliament. It is right that I should have said that in view of what I said on Second Reading. It is a pity, but I do not think that it can be helped.

I express my gratitude to my right hon. Friend, first, for setting up the Committee, secondly, for accepting the basis of its findings, and, thirdly, for the undertaking which he has given to give legislative effect to the Report within the period necessary to fit in with the suggested timetable in the Report. Of course, one would wish to see it come into effect rather more quickly than has been suggested. I am not sure whether my hon. Friend the Member for Manchester, Blackley (Mr. E. Johnson) is right in suggesting that this could so easily be done a year sooner than is suggested in the Report. I imagine that my right hon. Friend and the Joint Under-Secretary of State must have received representations from all sorts of bodies, which have to be given due weight, and the matter is bound to take a long time. I do not think that I can quarrel with the timetable.

I should like to add my tribute to that of my hon. Friend the Member for Blackley to the work of Sir Leslie Peppiatt and his colleagues and for the speed and thoroughness with which they discharged their task. It is a Report which offers a good deal of hope that something which many of us have wanted done in racing for a long time will be done. It is satisfactory to know that the members of the Committee, who were drawn both from outside and inside racing and, in the case of those inside, from both sides of the rails, appear to have succeeded in arriving at a unanimous finding that it is desirable and practicable that betting on horse races should contribute to horse racing.

The hon. Member for Brixton must have enjoyed himself in his speech. He had a good deal to say about breeding which was rather far removed from the facts. It is not a question of the amount of money involved in the export of thoroughbreds and of not having figures at one's fingertips. What the hon. Member overlooked is the lasting effect of loss that the export of even one or two of the well-known sires mentioned by my hon. Friend the Member for Blackley will have on United Kingdom breeding for years to come. Some of this money should be diverted to breeders' prizes, some to bigger prizes for owners and, above all, as my hon. Friend the Member for Bromsgrove (Mr. Dance) said, and about which he knows so much, better amenities for the customer and, I would hope, cheaper prices of admission.

Horse racing is far from being a pastime for rich men. If it were, it would not last very long. I do not seem to have time these days to go racing as often as I would like, but occasionally I get to some small meetings in the winter. One has only to see the great crowds from every walk of life at these meetings to know the great enjoyment which is derived from this sport. I should like to say how much I agree with the Jockey Club and the National Hunt Committee about the importance of trying to keep smaller meetings going. They need help just as much as the big meetings.

The Report is convincing in its finding that racing ought to have the contribution which the Committee suggests. The hon. Member for Brixton made much in his speech of paragraph 19 of the Report, and, in particular, the famous sentence: It is not our view, however, that without a subsidy horse racing will rapidly decline or die". I accept that sentence only because it includes the word "rapidly". I am sure that unless something is done it will die a slow death. I am also sure that it is a good thing that racing should receive this infusion, not only to keep it alive, but also, as the Committee rightly pointed out in the same paragraph, to improve it.

In the absence of the hon. Member for Brixton, who has now returned to the Chamber, I tried to say something about his remarks concerning breeding. I am sure that he enjoyed his speech. I certainly did, although it contained inaccuracies and a great deal of it was just about as relevant as another speech I once heard him make at about 5 o'clock in the morning on the Army Estimates, when he entertained the Committee for nearly an hour on military bands. The hon. Member's speech today was neither well-informed nor particularly relevant.

There are two or three points of detail which I should like to mention. The first concerns the categories into which the bookmakers are to be divided. The Peppiatt Committee said, in paragraph 40, that it might be found desirable to add new categories to those suggested". I consider that to be right. In the case of Category B, for example, it may be extremely unfair for a bookmaker whose profits are, say,£12,600 to pay precisely the same levy as a man whose profits are£39,900. The bracket is too wide. We should try, if we can, without making it too complicated, to aim at something nearer a sliding scale.

My second point concerns the certification of bookmakers and how to decide into which category they fall. Paragraph 41 of the Peppiatt Report suggests that bookmakers should provide a statement signed by a qualified auditor. It is of first importance that the scheme should command the confidence of those who are affected by it, and that they should be able to feel that everybody will be treated in the same way and fairly. Therefore, I should like the independent auditor, who is visualised by the Peppiatt Committee as coming in at a later stage if the Levy Board is not satisfied with the original return, to be brought in at the first stage to certify. I hope that it will not be unduly difficult to do this. It would be a good thing, for it would engender greater confidence than there will be under the present arrangements.

Then, in regard to the functions and composition of the Central Board, I am sure that the Peppiatt Committee is right in suggesting, in paragraph 50, that the Central Board should collect the money both from the Totalisator Board and from the Bookmakers' Levy Board. There should be only one channel through which the money is ultimately disbursed to its final destination. That being so, I disagree with my hon. Friend the Member for Blackley, because I think that it would be better if the Board were somewhat larger. It has important business to do in disbursing these moneys, and in its other duties. Therefore, it would be better and more satisfactory if it had a bigger independent element. I throw that out as a suggestion; there are precedents for it. It certainly should be a powerful Board which would command respect.

My last point is, again, a matter of detail concerning the interim arrangement for 1961–62. It is suggested in the Committee's Report that every bookmaker should pay£10 to get the scheme floated. I am not very happy about this. I agree that money is necessary, but the collection and the working of this idea simply for one year might present difficulties out of proportion to what would be gained. Perhaps my right hon. Friend the Home Secretary may consider it worth while to see whether there is not some other way of finding the money which, we agree, is needed.

My hon. Friend the Member for Blackley, who initiated the debate and to whom I am grateful for taking his opportunity in the way that he did—I would have done the same had my number come out of the hat—told the House something of what other countries do for racing. Indeed, this is referred to in the Peppiatt Committee's Report. I believe it to be true that in France between 8 and 9 per cent. of the Tote turnover goes directly to racing. That must amount to a good many millions of pounds, certainly a great deal more than is in question here. I, too, should like to see a bigger figure than£1¼ million, but we should be thankful for small mercies. I am satisfied that we should go ahead with the scheme. I repeat my appreciation of the work of the Peppiatt Committee and my thanks to my right hon. Friend the Home Secretary for his undertaking to give effect to its findings. Perhaps he will be grateful to me, too, if I refrain from trying to give him the Derby winner for next week, because I should almost certainly be wrong.

4.15 p.m.

Mr. George Wigg (Dudley)

I should like to add my voice to the congratulations already tendered to the hon. Member for Manchester, Blackley (Mr. E. Johnson) on having the good fortune to draw first place in the Ballot and making this debate possible and also to con- gratulate him on the good use to which he has put the time available to him. It would be churlish if I did not take the opportunity of tendering my thanks, for what they are worth, to Sir Leslie Peppiatt and the members of his Committee for taking on a difficult job and doing it as well as they have done it. I ought also to thank the Home Secretary for setting up the Peppiatt Committee. We take the right hon. Gentleman's good work so much for granted that one tends to forget the author of all these works.

As I am a member of the Racecourse Betting Control Board, as everybody in the House knows, I should make it clear that I am voicing my own opinions and not those of the Board. Having struck those agreeable and non-controversial notes, I should like to turn to the speech of my hon. Friend the Member for Brixton (Mr. Lipton). He was a little unfairly dealt with by the hon. Member for Bebington (Sir H. Oakshott). When my hon. Friend spoke on the debate on the Army Estimates, it was not at 5 o'clock in the morning. It was a 7 o'clock. He spoke not for an hour, but for an hour and twenty minutes. It was not quite as bad as the hon. Member pointed out, because on that occasion my hon. Friend had the advantage of my advice and, therefore, some parts of his speech were quite sensible.

Today, deprived of that privilege, my hon. Friend did not do quite as well. He directed his attention, however, quite accidentally, to the central points of what we are discussing. We have heard about owners, trainers, breeders, the public and the racecourses, but what about the poor old horse? The horse is the central piece. It was on this point that my hon. Friend, was, curiously, misinformed, because, having seized on one point in the Report of the Peppiatt Committee which he could understand, he then proceeded to make the most of it and to suggest that British racing has not been impoverished over the years as the result of foreigners coming into our market to buy our bloodstock. That is an excellent thing if it is a two-way business. It is excellent that the horses that do well here should go abroad. This traffic carries with it prestige and also has a cash nexus. Therefore, it is not altogether a loss. There has, however, been a great impoverishment.

If my hon. Friend wants the figures, perhaps I may remind him that, of the 10 top sires in America for each of the 15 years since 1945, 55 have been British horses. I assure my hon. Friend the Member for Brixton that a considerable number of his constituents in Brixton who know a great deal about racing will be shocked to know that he has failed to notice that the departure of Mahmoud, Royal Charger and Nasrullah, to mention only three, has had a profound and permanent effect upon British racing.

Mr. Lipton

My constituents are probably well informed about these lamented departures. They have borne these departures, as others, with their customary fortitude.

Mr. Wigg

I quite agree that they have borne them with their customary fortitude, but not with the same degree of ignorance as is shown by their Member. They will go in their thousands to the Derby next week and they will find that the Derby favourite is a French horse. They will not mind very much that a French horse wins as long as they back the winner. They will also be struck, particularly if the going is hard, that the other five races at Epsom will not be worth going to watch, because there will be a shortage of runners. If this process goes on for many more years, horse racing in this country will descend to the level of what one comes to expect at the smaller meetings. That is a fact which we have to recognise.

My hon. Friend touched on an important point when he tried to make it appear that all racehorse owners are rich men. I am sure that those enthusiasts who go racing in the winter will be astonished to hear that the owners must have an income of£5,000 a year before they start. My hon. Friend completely overlooks that those who sustain National Hunt meetings are small farmers who have one horse each and probably ride them themselves and take them to the meetings themselves. Very often those horses start in the hunting field and go back to the hunting field without any reward at all to the owners.

It would be a great loss if this enthusiasm tended to die, because racing is part of the English scene, and ought to be seen from that angle. It is a very pleasant way of spending time, if one so desires; one does not have to go if one does not want to. It seems a little odd to me that any hon. Member who sits on these benches should have put the arguments my hon. Friend did, apparently regardless of the needs of his constituents, because when they go racing what they want is straightness.

They want straight racing at reasonable entrance fees and they want the very best racing they can get. They can get it anywhere on the Continent, and increasingly so, but they get it less and less in England. That seems to me wholly undesirable. It seems to me that racing is part of the national habit, and those who like to go will go, and those who do not like to go will not go. However, if we are to have it, it ought to be as good as it possibly can be and it is in our national interest that it should be straight.

One of the things that has happened is that there is a falling of in public morals which poses problems for successive Home Secretaries. The social pattern is set by people who are held up as examples, and if it becomes, as, I am sorry to say, one sometimes is forced to think it has increasingly become, a habit to "ready" horses particularly in the bigger handicaps it can have only a very bad effect. This is something which ought not to be.

If the Home Secretary went for a day to Epsom and talked to people there it would not be long, particularly after a tricky handicap, before he found that the subject of discussion would not be the merits of the horses and the attributes of the horses for that race but whether such and such a horse was trying.

Of course, all sorts of nonsense is talked about this by all sorts of people, because if a man backs a loser he is always likely to put the blame on the jockey and to say that someone has done him down, and so on. I am very much afraid that this has become a habit of mind, which has effects far beyond horse racing, that it is rather clever to fix a horse to bring about a desired result.

What we must never forget is that the person nearest to the horse is the trainer, and if the trainer is not making a living out of training his horses in the return from the fees he gets, what he has got to do is to make up for it by betting, and once he has to do that he has to get the best price he can for the winner. And this means that horses are readied. The public know that.

I think that that is wholly regrettable on grounds of public policy. It was the basis of my approach to the Betting and Gaming Bill as it is to the Report of the Peppiatt Committee.

Of course, as the hon. Gentleman the Member for Bromsgrove (Mr. Dance) has said, the roving camera ought to be standard in this country, and, of course, the watering of courses ought to be universal.

As I have said, I have had the privilege to serve for a short time on the Betting Control Board and I am sure that I speak for my colleagues when I say that its approach to these problems is from the point of view of what is best in the public interest and what is best for racing. I think, therefore, that a Central Board composed, rather like the present Board, of men who take an interest in the sport of racing but who also hold positions in public life which will lead them to take into account the public needs, is the right method of approach to the problem.

I think one of the most important recommendations of the Peppiatt Committee is contained in paragraph 55 of its Report. Hon. Members who served on the Standing Committee on the Betting and Gaming Bill will not be surprised to hear me say that, because there I expressed the view that we are going into uncharted waters. The recommendation in paragraph 55 is to give the Board the power to keep its problems under annual review. I think that is the right method of approach.

I turn for a moment to the speech my hon. Friend the Member for Bermondsey (Mr. Mellish) made. He has had to leave the Chamber but he will not mind my referring to him. This suggestion of each racecourse having its own Tote has been discussed, and was discussed in the Standing Committee. I am afraid my colleagues on the Committee got a bit bored with all the talk we had about that. The reason why Birmingham does not want it is that Birmingham is wise enough to see that the present set-up is economical and gives the public confidence in its operations and also enables Birmingham to take some advantage from the money which is bet off course. Of the£28 million turnover, some£14 million, roughly half, comes from off course. The other thing is a question of simple division. If all the racecourses in this country are to take their share out of it, and there is only so much to share out, it means that the weaker courses will get less and the richer ones will get more, and if that were to happen it would seem to me to be the death of National Hunt racing, particularly at the smaller meetings, and that, I think, would be wholly regrettable.

Mr. W. R. Rees-Davies (Isle of Thanet)

This is a very important point. Greyhound racing is sustained very largely, as the hon. Gentleman knows, by the Totalisator which is owned by the operators on course. That works extremely well there. Is it not right that in the long run it may be better in both greyhound racing and horse racing for the Tote to be operated by the racecourses themselves?

Mr. Wigg

I am sorry that that is quite impracticable. I am astonished that the hon. Gentleman—

Mr. Rees-Davies

I was not expressing a view. I was asking a question.

Mr. Wigg

Then I hope the hon. Member will forgive me. He has overlooked that racecourses like those near London have an average of twenty days' racing a year, whereas dog tracks often have a hundred. It would be very difficult indeed for racecourses to carry the security systems and overheads which the dog tracks are required, by Statute, to carry. On each course there has to be an independent engineer and independent accountant, so that the system is security-proof and the dividends cannot be altered after the results are known. While this is practicable in dog racing, it would be considerably more difficult and would not be practicable in the case of horse racing.

But the overwhelming argument against it is this question of off-course betting. I talked just now about a figure of£28 million. I was wrong. I have looked up the figures. They are£18 million off-course out of£28 million on, and Birmingham and other courses which now get their share would not do so unless the Tote is operated as at present. It seems to me, therefore, highly desirable that the Tote should continue as it now is.

There is a little more I want to say, because I know other hon. Gentlemen want to speak. I think myself that£1½million is a practical sum to start with. Like the hon. Gentleman the Member for Bebington, I am grateful for small mercies. This is a start. If it is possible for more to be given I think it is in the interests not only of racing but of the bookmakers that it should be given.

I certainly do not want to drive the bookmakers off the course. I think they do a very useful job, as my hon. Friend the Member for Bermondsey said, in lending colour to the racing scene. I do not think the general public would like them to be driven off, but neither do I think the bookmakers will mind this levy. I think it absolutely right in equity that the off-course bookmaker should make a contribution to the sport, which may be to him a business, the sport by which he lives.

I think the scheme put forward by the Peppiatt Committee is workable and the very fact that it will keep the matter under review will be good in the interests of public morality and will give the House and the Home Secretary confidence in any legislation which may be brought forward.

5.0 p.m.

The Secretary of State for the Home Department (Mr. R. A. Butler)

The fact that I intervene now in the debate is simply because I have one or two points which I wish to put before the House in a short speech. Perhaps some of my hon. Friends will be able to help me by commenting upon them, because one of the objects of the debate is to air this subject prior to legislation. Therefore, the shorter my speech and the more people can intervene the better.

I am grateful to the hon. Member for Dudley (Mr. Wigg) for referring to the horse, the central figure in our entertainment this afternoon. I am grateful also for his human remarks and for the support which he gave in general to the Peppiatt Report.

I am sure that we are also very grateful to my hon. Friend the Member for Manchester, Blackley (Mr. E. Johnson) for using his place in the Ballot. I hope that we are grateful, too, to the Leader of the House for having provided a certain number of private Members' days at this time of the year. If we had not had the four extra private Members' days we might not have had this debate. Other small tributes from the hon. Member for Dudley I also gladly welcome.

I had always thought that the Betting and Gaming Bill should be accompanied by proposals for a levy and that in tackling betting and gaming—a very difficult subject the burden of which has been taken by my right hon. Friend the Joint Under-Secretary—this might be a controversial aspect. I accordingly appointed a Committee, because I was not satisfied that we knew what sort of scheme to put into effect and what measures for it should be put into a Bill.

I am, therefore, greatly obliged to Sir Leslie Peppiatt and the members of his Committee for reporting. I asked them to report in good time and to try to report before the Betting and Gaming Bill became law. They have done that, and I am very much obliged to them. But with all due deference to their Report, I think that we have not yet solved all the problems. That is why I thought that it would be impossible to introduce these measures into the Bill as I had originally hoped. I do not know what will be done in another place, but I am certain that the Commons House of Parliament would desire to comment freely upon all the matters which will be discussed this afternoon. We have, therefore, to take a little more time on the matter and this debate is a preliminary discussion on it.

The fact that the Peppiatt Committee has left us a good many problems does not take away from the excellence and comprehensive nature of its efforts. It will be seen from the list of witnesses in the Appendix that the Committee worked hard and took a good deal of evidence. We have been enabled to have the debate today largely due to the speed with which the Committee has acted and I should like to repeat what my right hon. Friend the Joint Under-Secretary has said, namely, that the Government are disposed to accept the general recommendations of the Report. I should like, however, to have further reactions from hon. Members on several points.

As Byron put it about betting, …most men (till by losing rendered sager) Will back their own opinions by a wager. I am sure that that is the position of the hon. Member for Dudley. I had hoped up till now that it was the position of the hon. Member for Brixton (Mr. Lipton) but I am afraid that he has sadly disillusioned many of us by his speech and not least many of his constituents. Few of us become sager in the course of betting. Therefore it is profitable and proper that we should consider how our betting laws can be most properly fashioned.

My hon. Friend the Member for Blackley referred to the need to support racing and he brought forward certain statistics which I hope will have been noticed by the House. He has been supported by several other speakers who really know about the subject. I have absolutely no doubt that the words of my hon. Friend the Member for Bromsgrove (Mr. Dance) are correct. My figures do not exactly coincide with his, but my information is that out of a total of 70 racecourses only five have been rebuilt or refashioned since the 1914–18 war. I do not think there is anybody who would contest the proposition that amenities in general need improving drastically, particularly in the cheaper enclosures for ordinary people who wish to enjoy their day's racing.

1 have had an opportunity of discussing this not only with such distinguished people as the stewards of the Jockey Club but also in a modest way in the course of seeing for myself. I am convinced that a great deal can be done to improve racing and support it in general at present. The Peppiatt Committee referred to the manner in which prize money has lagged behind prize money abroad. My hon. Friend the Member for Harborough (Mr. Farr), who intervened briefly in the speech of the hon. Member for Brixton, indicated in a perfectly human way from his own experience statistics of which I have had examples in the course of my researches.

Keeping a racehorse today may appear to the public to be a luxury but it is invariably a loss. It is impossible, even in his most friendly mood, to get sufficient back from my right hon. Friend the Chancellor of the Exchequer to make it a profitable undertaking. Everybody who has tried it knows. If the sport is to go on, further prize money and further encouragement to the raising of bloodstock is vital for this old-fashioned and popular industry in this country. The level of prizes is well known. The Peppiatt Committee in page 10 of its Report talks about breeders' prizes, increasing prize money, improving amenities and subsequently reducing admission charges, a matter to which several hon. Members have referred, to which the proceeds of a levy like the one proposed might be turned. It is precisely these objectives which are so important at present.

Before the debate I could not help turning to my Surtees which is almost inevitable for those who speak on an occasion such as this. He makes one of his characters say that there are three things which, in order of merit, he would protect. The first, as would also the hon. Member for Dudley, is his horse. The second is his wife, and the third his name. The Peppiatt Committee and, I hope, the House have such a man in mind. If we agree with this proposal, his horse will be protected by providing higher prize money, his wife by improving the amenities, and his name by protecting the reputation of British horses and bloodstock throughout the world.

I hope, therefore, that generally the House will be with us in giving a blessing to the Report prior to more detailed legislation which will be necessary. It is important that it should go out to the outside world—and it has not been made clear in any speech so far—that the proposed levy is designed to benefit the general sport and industry of racing and the amenities of the public, and, through racing, the racing public and is not a subsidy in any sense to any individual owners.

I say that only to emphasise it for outside consumption, because I should not like anybody to think that we are adopting any proposal to transfer public money from one section of the public to another or that we are doing anything which is particularly unorthodox. In this connection, it is sometimes thought that it is wrong and unorthodox and contrary to our fiscal system to have a levy of this kind, but it will be seen from paragraph 22 of the Peppiatt Report that there are precedents.

The Report names, for example, …the levy on cinema takings for the benefit of British film production; the sugar surcharge mechanism; the levy on the cotton industry; and the levy payments under Agricultural Marketing Schemes. The Report goes on to say that None of these provides an exact analogy to what would be necessary…but they serve to establish precedents for a statutory levy within a particular industry.

Mr. Albert Roberts (Normanton)

What about the football pools?

Mr. Butler

I am dealing only with the precedents mentioned in the Report.

We are not taking any dramatic step or any step different from what has been done before, nor are we doing anything to subsidise individual cases. We are copying what happens already with the Tote, which pays what amounts to a levy by way of contributions from its surplus both to racecourses and otherwise for the benefit of racing.

I hope that many of those, like the hon. Member for Dudley and others in the House, like Mr. Tom Williams, who was a Member of the House, and Sir Thomas Dugdale, now Lord Crathorne, who took great interest in racing, will do their best on this occasion to help us to frame plans for a scheme on these lines.

After all, it is a bit according to our tradition, because I think Disraeli's greatest biography was about Lord William Bentinck. Lord William Bentinck was a very good leader of the Tory Party, but he got into great difficulty over the sugar tax and he had to be briefed by Disraeli, just like the hon. Member for Dudley has to brief the hon. Member for Brixton, whenever he spoke to any great effect. It is to be remembered that according to that immortal biography, possibly one of Disraeli's best bits of writing, Lord Bentinck used to enter the Division Lobby in a scarlet coat and top boots, and he very often voted in that peculiar condition.

We are therefore following up today in the sport of racing, what the hon. Member for Dudley referred to as "clean and straight racing", something that is vital to the English character and important to us today.

Those are the general remarks that I wanted to make and I now want to refer to one or two detailed points upon which I hope speakers in the remaining considerable time which we have for this debate will perhaps make one or two comments, that is, the precise method of collecting the levy or the machinery required. We must also, of course, before we take a decision, consider any views held by other than racing interests.

It is my present intention to go forward with a scheme for a levy. The first point that arises is what should be the basis of the levy. My hon. Friend the Member for Blackley said that he would prefer a levy on turnover rather than a levy on profits. Of course, before we appointed the Peppiatt Committee one thought that we might put something in the Betting and Gaming Bill. We had a very difficult choice before us. Should it be on turnover, on profits, on the number of telephones or on the number of staff employed, etc.? Were we to spread the impost over a man who bet on horses, a person who dealt with dogs, and there were other undefined difficulties.

Having appointed a Committee of experts, in so far as we were able to find them, I am inclined to accept their Report that this had better be levied on profits. I think that a levy on turnover would be more inexact. An alternative levy on backers or punters, of which this is an indirect example, would be found to be more difficult.

I am bound to say that I agree with the conclusion of the Committee and so I shall prepare the Bill, unless I am corrected in the course of this debate or in the weeks or months that lie ahead, on the basis of a levy on profits. Again, I am interested to hear what others have to say.

Now about the boards. One or two examples have been given. Those who have spoken have referred to the constitution of the boards, but under the Peppiatt Report there is to be a Central Board responsible for the proper functioning of the whole scheme. It is this Board which is going to administer the central fund. It is going to draw up proposals for the amount of the levy and to decide with the assistance of the Bookmakers' Levy Board how the levy is to be collected.

In this connection I should like to refer to the speech of my hon. Friend the Member for Blackley who asked whether we could not revert to the original figure of£3 million. That has been mentioned. The hon. Member for Bermondsey (Mr. Mellish), in his stout and loyal support of the bookmakers—which I should like to endorse, because without them where should we be?—thought that£1¼million was good enough to levy from the bookmakers. I am inclined to agree with him and to think that it is sufficient.

I should like to say to my hon. Friend the Member for Blackley and to others who raised the matter, including the hon. Member for Dudley, that this is essentially a matter which will, as far as I am advised at present, not be in the Bill. It will be a matter for the Central Board and the Bookmakers' Levy Board, and I do not think that in our debate today we need definitely decide what the final sum should be. I do not wish to lay down in the Statute what the exact amount of the levy will be.

Mr. Eric Fletcher (Islington, East)

Would not the right hon. Gentleman agree that the Bill must lay down some maximum as to what powers the Central Board should have?

Mr. Rees-Davies

I will, if I may, put this point to my right hon. Friend at the same time. Having regard to the future, in which the values of money, and indeed, money as a whole may change, and the consideration of what hon. Gentlemen have said with regard to the possibility of a larger sum at a later date, would it not be right to leave any question as to quantum not clearly defined in the Bill?

Mr. Butler

I have indicated my view that the Peppiatt Report proposes a reasonable system, and I think that the views of the hon. Member for Bermondsey should be borne in mind. I do not see how we could put a maximum in the Bill. As the object of this debate is to air these difficulties and as the hon. Member for Islington, East (Mr. Fletcher) may be taking part in the debate, perhaps he could then say what he has in mind. As far as the point raised by my hon. Friend the Member for the Isle of Thanet Mr. Rees-Davies) is concerned, I am more inclined to leave it to the boards, particularly the Central Board, owing to the variation, as he says, and owing to the importance of seeing that the levy is fair and is accepted as fair by the Bookmakers' Levy Board.

It will be for the Central Board—this was raised by the hon. Member for Dudley—to conduct a yearly review of the scheme and to distribute money from the central fund. In fact, the successful operation of the scheme depends on the Central Board and we must be careful to ensure that its constitution and composition are such as to enable it to carry out its duties properly.

There are two views on the composition of the Central Board. The first is that favoured by the Peppiatt Committee, namely, that the Board shall be small in number and composed of persons who, while generally concerned with racing, such as representatives of the Jockey Club and the National Hunt Committee, are not recipients of the levy. That is the first point, I think. This will, in effect, constitute a set of impartial intermediaries and it will be for the potential recipients, those people I referred to from page 10 of the Report, to appear before the Board and make their case for the appropriate grant. That is the conception of the small board.

The alternative view which has been pressed upon me by various racing interests derives from the present constitution of the Racecourse Betting Control Board. When that Board was set up in 1928 wide representation was given to the then racing interests, and it has been suggested to me that the new Central Board should also be widely representative of the possible recipients of the levy.

I have not come to a final conclusion on either, but I do not think I can give quite the same width of representation to the Central Board as was given to the Racecourse Betting Control Board in 1928. However, I shall be prepared to listen to other ideas put forward in the debate. Again, should the Central Board include an element, and if so how large an element, entirely independent of racing, that is, an element independent to judge like we would sometimes have in the Wages Board?

Another question is the composition of the new Tote Board. If the Peppiatt Committee proposals are accepted, the functions of distribution at present undertaken by the Racecourse Betting Control Board will pass to the new Central Board. This will mean that the Tote Board will merely be responsible for operating totalisators on the course and any off-the-course tote facilities which may be provided as a result of the provisions of the new Bill.

It seems to follow, therefore, that the widely representative composition of the Control Board is no longer appropriate and it is for consideration what its composition should now be. The idea that appeals to me at the moment is that the new Tote Board should be small in number. I think this will probably prevail in the first draft of the Bill. It should not be representative of particular interests, and should, if possible combine general business ability with knowledge of and interest in racing matters. I think that is easier to decide immediately than the Central Board.

There is also the problem of the relationship of the proposed Boards with each other. It is not sufficient merely to set them up. It is also necessary to define their relationship. For example, is each Board to be independent with separate functions; or should the Tote and Bookmakers' Levy Boards, proposed in the Peppiatt Report, be subordinate boards reporting to the Central Board on all matters of policy? Should the Chairmen of the Bookmakers' Levy Board and the Tote Board be members of the Central Board? On these matters I have not yet come to a final conclusion, except that I think some link-up may be necessary.

As I said earlier, to say that a final scheme has emerged is not so. There is a lot of work still to be done. That is why I am grateful to my hon. Friend for airing the subject. This is really the answer to the speech of my hon. Friend the Member for Bebington (Sir H. Oakshott), who took part in our debate and asked some very pertinent questions about the Boards, including the Central Board. I should value a further conversation with him before the final drafting of the Bill takes place. I have also noticed his questions about further narrowing the bands of bookmakers, which he raised in his speech.

So much for one or two of the questions. I have practically no more to say except on the question of tax and on that the following is my understanding of the position.

The Peppiatt Committee deliberately refrained from commenting on the tax position since this was a matter which was for the Government. It did not feel that it could properly attempt to anticipate the Government's decision. Broadly, however, after consulting my right hon. Friend the Chancellor, it appears that if such a scheme as that proposed in the Report were introduced, the levy on bookmakers would, I am advised, be allowable as an expense in computing a bookmaker's profit for tax purposes.

As for the Tote Board, a levy on amounts staked would similarly be allowable, and that creates an equality of treatment which before this was not likely, and I think that is an improvement. In both cases the levy would be made to fall before tax and not after.

The tax treatment in the hands of the recipients is also important—that is, recipients of grants from the central fund —and that would depend on the circumstances. In the hands of a person carrying on a trade, for example—that is, a racecourse owner—a grant earmarked for revenue expenditure would be brought in as a trading receipt; a grant earmarked for capital expenditure would not. That is how I am advised, and I thought that the House ought to know. In other words, the taxation position would depend upon the outlay which the grant was intended to meet. and I think that is fair.

Mr. Ronald Bell (Buckinghamshire, South)

Has my right hon. Friend made an estimate, on the basis of the levy being allowable for tax, of how much of this is, therefore, simply a Government grant financed out of diminution of the Revenue?

Mr. Butler

No, Sir; I have made no such calculation. It is a point which I expected to meet during the course of discussion in the House. I cannot give any such estimate today.

Those are the main points which I wanted to put before the House in the course of this airing debate, and in order that there shall be no ambiguity I need only repeat that it is my intention to proceed with legislation in time for the timetable in the Appendix.

Several hon. Members have asked—my hon. Friend the Member for Blackley first dealt with the point—whether the timetable need be so delayed. I am advised that the reason for the delays and the reference to the year 1962 arises from the delay in registering bookmakers, and that it may be difficult to bring in the scheme before then. However, I am advised that it would not be impossible—that is the result of my investigations since my hon. Friend spoke, and so I have not had time to go into it thoroughly—but all I can undertake today is that we shall have the least possible delay—I cannot go into more detail than that—subject, I hope, subject to the proper registration of bookmakers.

Mr. A. Roberts

The right hon. Gentleman made much of a quotation about a man protecting his horse, his wife and his good name. I would protect my dog. A moment ago the right hon. Gentleman said that he was trying to get more or less the opinions of the House about the Report. I think that in a spirit of equity and to clear up the whole issue he should take into consideration greyhound racing, and not leave it, when it may well be forgotten, because I regard greyhound racing as just as attractive as horse racing.

Mr. Butler

The hon. Gentleman has made a very astute intervention. I thought he said that he would protect his "job". I realise now that he said he would protect his dog. The Report does not deal with greyhound racing, and I should not like to make any observations on that subject today. However, if we could have a discussion on this matter I might either consider it as a separate matter or, at any rate, give it the benefit of my attention. I should be glad to be taught by the hon. Member for Normanton (Mr. A. Roberts) how to treat his dog in a proper way. Today we are dealing with horse racing and with a Report on horse racing, and the Report does not include—

Mr. Arthur Lewis (West Ham, North)

Perhaps the right hon. Gentleman would develop that point. There was a good deal of smiling and laughing behind him while he was making his remarks. I agree with my hon. Friend the Member for Normanton (Mr. A. Roberts). There are thousands of people who believe that greyhound racing should be treated on the same basis as horse racing. The right hon. Gentleman said that he would consider the matter. Would he be willing to meet a deputation of hon. Members who are interested in the subject so that they may discuss this with him to ascertain whether—

Mr. Deputy-Speaker (Sir Gordon Touche)

Order. I am afraid that that subject is not connected with the Motion which is before the House.

Mr. Lewis

No, Mr. Deputy-Speaker, but the right hon. Gentleman said that he would be prepared to discuss this subject and I am now asking him whether he would be prepared to go one step further and meet a deputation of hon. Members who are interested in the subject and discuss the matter further.

Mr. Butler

I think that that would be by far the most businesslike way of doing it. Then hon. Members who are interested in this aspect—it is obvious that there are a great many of them—would be able to put directly before me or my right hon. Friend or my hon. Friend what they feel on this matter.

Mr. Lewis

I thank the right hon. Gentleman.

Mr. Butler

I would conclude by saying that I do not know what will happen in another place, but perhaps I may take it that it is the mood of the House that, as there are so many points to consider, this is a matter which cannot be hurried and which cannot be inserted in the present Bill because of the complexity of the subject. Therefore, we shall have to find a special vehicle for it. That means a Bill of its own, and that Bill will have to be considered by both Houses in the normal way. That will give us an opportunity of getting the legislation satisfactorily bound up before we proceed with the matter.

In general, I hope that the debate will show the keenness of the House to support one of our most ancient and traditional occupations, one which gives a great deal of pleasure to many people and one which, if properly conducted and properly supported, enhances the name of this country.

5.28 p.m.

Mr. Ede (South Shields)

I am sure that hon. Members who have been present during the debate will agree that we must now add to the thanks that we offer to the hon. Member for Manchester, Blackley (Mr. E. Johnson) for originating the debate our thanks to the right hon. Gentleman the Home Secretary for having indicated the way in which his mind is beginning to work on this subject.

We must be quite certain that we are today discussing something which marks a very considerable departure from the general attitude of the House towards this subject in days gone by, and that the Home Secretary, in the line that he has taken, has been accepting on behalf of his office responsibilities which will be increasingly heavy as the years go on.

I think that on general lines the Peppiatt Committee was not very far out in the recommendations which it made with regard to the subjects with which it dealt, but the great thing remaining is the question of the machinery by which the Report is to be operated. It is clear that the right hon. Gentleman has not made up his own mind there, and when we get the Bill, as he has indicated, there will be a great many details that will need very considerable thought on the part of Members of the House who may take part in the discussions that emerge.

I suffered a domestic disaster on Friday evening. My television set broke down so I tuned in to the Home Service on the radio. The first question that I heard put in a programme called "Any Questions" was one that asked what the panel thought of the outbreak of violence which has been so noticeable in the country lately. The first person to give an answer was the hon. Member for Uxbridge (Mr. Curran), who I am glad to see in his place, because I have not been able to give him notice that I intended to allude to what he said. I hope that the right hon. Gentleman the Home Secretary will get a transcript of that answer, because, for the second time in the short period during which we have been associated as Members of this House, I found myself in agreement with what the hon. Member said. The first thing he said was that we must bear in mind the Street Offences Act, and the way in which shifting certain things off the streets has landed them somewhere else.

Let us be in no doubt that we are engaged in a similar dangerous course in this matter also, and during the Betting and Gaming Bill discussions in Committee we had many speeches—from two or three Members at the most, but many speeches—which indicated that they thought that this scheme should be operated by the bookmakers. I say frankly that I do not share the great admiration that my hon. Friend the Member for Bermondsey (Mr. Mellish) has for bookmakers.

I have had to see them in Epsom all my life. I have seen them change, from the time when they came down and spent the whole of Derby week in Epsom, to their appearance now in motor cars, bringing their clerks with them, returning to London or elsewhere for the evening, and coming back again next morning. We are making a very considerable social change in considering the Peppiatt Committee Report, and I hope that the right hon. Gentleman will see that the persons appointed to the various boards to deal with this subject are persons whose personal integrity and whose lack of risk of being made the objective of pressure from bookmakers will be the first concern that he will have.

If the Home Secretary and the State are to be brought into this matter, we must be quite certain that the whole of the machinery is operated by people who are above suspicion and against whom there can be no accusation that they have been animated by one particular interest or another. I regard that as being the first thing that must be secured, no matter how the details are worked out. On that point, I do not differ very much from what my hon. Friend the Member for Dudley (Mr. Wigg) said in his remarks.

Recently, one of my hon. Friends received a letter from the bookmakers in his constituency, and, not being a person who frequents their company very much, he handed the letter over to me and asked me to deal with it. I put them off as well as I could—I gather that that was what the job was given to me for—but on 18th May they wrote to me. Their letter was headed "The Peppiatt Committee Report," and went on: Having studied the above Report and its implications we should like to state our views. The terms of reference of the Committee were sound but the composition of this body appears to have had no regard for the small Bookmaker from whom the Committee suggest they will obtain 87 per cent. of their levy and who have no desire to become members of the National Bookmakers Protection Association and Associated Bodies. Thus the Committee have been deprived of the voice and knowledge of a large percentage of the Trade and we can only view the Report as being heavily biased in favour of the N.B.P.A. The principle of one section of a community or business subsidising a private profit making concern has yet to be established. This could create a precedent which if logically continued could lead to other businesses calling upon attendant trades to subsidise them. We do not think that this is the policy of this Government in general and would welcome your comments. Who am I to comment on the policies of this Government in general? If I sent my comments on that matter through the post and my letter were opened, the probable result would be that I would be prosecuted. Therefore, I do not propose to make any comments on that general principle. But I ask the right hon. Gentleman to bear in mind that the Betting and Gaming Bill, as it stands, imposes a very heavy disability on the kind of people who wrote that letter. He does not know what another place will do about the Peppiatt Committee's Report. I hope that this House would very much resent a proposal to set an impost on a section of the community, as the implementation of this Report would do, if that impost originated in another place, which some irreverent people think is an assembly that might almost be regarded as an extension of the Jockey Club.

If this impost is to be proposed at all, it should be proposed in this House and we should take the responsibility of formulating it here. I hope that the right hon. Gentleman will realise that in this matter, unless we are very careful, we shall set up a great vested interest which may be very difficult to control in future. We have seen that happen in the small matter—as it appeared years ago—of the legalisation of the football pools. No one imagined then that they would ever grow into being the great vested interest of today.

I know one social worker who investigated conditions on Tyneside during the period of depression. He said that the growth of the football pools there, and of their power, was due to the fact that at the time when most humble men had very few opportunities of making decisions of their own because of unemployment, and all their decisions were really made for them by the limited amount of unemployment pay, the pools grew because once a week men could make a decision on matters, and stake a very small sum on the possibility of their having made the right decision.

As my hon. Friend the Member for Dudley pointed out several times when we were in Committee on the Betting and Gaming Bill, that is one of the attractions of gambling on horses. People make a decision by which they are bound and, in a society in which humble people make fewer and fewer decisions, in making a bet they are left to take an initiative and that is an opportunity which they seize.

The right hon. Gentleman's policy in these social matters, which we understand to be now two-thirds of the way towards completion—there is to be another Bill next Session dealing with liquor licensing laws—is making great changes in the social set-up of this country. We have to be very careful that we do not see what I regard as the worst defects of the Street Offences Act being brought into those other things, with unscrupulous people just as willing to exploit those defects as they have been in those instances in which the right hon. Gentleman's decisions have already become law.

I join with the right hon. Gentleman in hoping that this Report will lead to the benefit of racing. My fear is that in trying to do that we may give a comparatively small section of the community opportunities for creating a new vested interest which will be inimical to the public interest unless the boards controlling this new venture are carefully chosen. For those reasons, I shall carefully study any proposals which the right hon. Gentleman makes in any Measure which he brings forward. I hope that he will be able to do what ought to be done, to secure money for the improvement of racing in the various aspects which have been discussed, without creating a new vested interest, which, whatever benefit may accrue to racing, might seriously injure the country's social structure.

5.44 p.m.

Mr. Richard Stanley (North Fylde)

I am very pleased to follow the right hon. Member for South Shields (Mr. Ede). It was nice to hear him say that he intended to support the idea of this levy if it is imposed solely to help the sport of racing. It appears that he and my right hon. Friend are looking in exactly the same direction, on this occasion anyhow, so it must be the right direction.

I very much agree with what the right hon. Gentleman said about the need for a strong chairman of the Central Board. To start with, at any rate, he should be a full-time chairman. It sounds as though all he will have to do is to distribute a little money, but in fact his work will consist of much more than that. It will be very far-reaching and he should be a full-time chairman to deal with it.

Both my right hon. Friend and the Member for Dudley (Mr. Wigg) went out of their way to say that they thought that a levy would help to keep racing honest. Many people say that dishonest things happen in racing. For my sins, I sometimes have to sit as a judge and sometimes act as a spy and try to find them out. However, when it comes down to the facts, I think that very few people cheat, although obviously, one or two do. If we can get more money into the sport. I am certain that cheating will be done away with.

I welcome the Report because it recommends that off-the-course bookmakers should make a contribution to the sport. All bookmakers make a good living out of the sport and off-the-course bookmakers put nothing back while their colleagues on the course contribute a reasonable sum. If we do not have a contribution from off-the-course bookmakers, English racing will become more and more expensive and more and more uncomfortable compared with the sport in other countries. The hon. Member for Brixton (Mr. Lipton) spoke of breeding and that said that it was not doing badly. My advice to him is to look at the first twelve fancied horses for this year's Derby. English racing must have gone down the slope a little quicker than we thought, because only two of those horses are English.

My right hon. Friend spoke about the set-up of the Central Board. The Board ought not to be very big. It should have a full-time chairman and four other members. I do not want a donor or a beneficiary of the levy to be on the Board, which should consist of a member of the Jockey Club and a member of the National Hunt Committee and two other members appointed by Government Departments. That would make the Board big enough to administer the levy and it could call in any expert advice required.

I am pleased that there is to be a yearly review. No one can possibly foretell what sort of money should go to racing. Those who gave evidence before the Peppiatt Committee made something of a cock-shy and made calculations which no one would dream of saying were accurate. If the Board feels that racing deserves more money, I hope that it will get it, but if the Board says that the amount contributed is sufficient, we will be able to keep it at that figure.

I am also pleased that the money is not to be taxed. One or two of my hon. Friends might have something to say about that proposal. However, if we have a contribution from bookmakers, it will be silly if part of it is given to the Treasury. That has happened with the old Tote Board. I gather that when it was set up, the contribution was meant not to incur tax, but the Tote lost its case in the House of Lords and for the last eighteen months has had to pay tax as it had done in the past.

I do not agree with the Peppiatt Committee's basis for levying the money. I agree with my hon. Friend the Member for Manchester, Blackley (Mr. E. Johnson) that the levy should not be based on profits. One well-known bookmaker was heard to say, "Of course I have profits, but they are never shown." Most of these people are very clever and their profits can be hidden in the profits of other businesses. I would prefer to see turnover used as the basis of the levy and I am sure that the set-up should be decided by the bookmakers themselves, because they would know of the artful dodges better than anyone, and even better than the Treasury. They should be told how much money is required, and then should be left to arrange how to raise it.

When my right hon. Friend sets up the new Board I hope that he will pay attention to some of the things that were said during the Second Reading of the Betting and Gaming Bill. There ought to be a full-time chairman. I dare say that there might be a smaller Board. If there is, I hope that it will not consist only of racing people. The Board ought to consist of equal numbers of racing people and people from outside, and there ought not to be a beneficiary of the racecourse on the Board, just as there ought not to be any breeders on it. A full-time chairman is essential if the Tote is to profit from having betting shops.

I gave evidence before the Peppiatt Committee on the question of breeding. At first sight it looks as though the Report has been generous and given us what we asked for, but I went into it in more detail. I discovered what the Tote used to give for improving bloodstock. That money will not now be paid. The Tote used to give about£35,000 for light horses and pony breeding. For heavy horses it gave£6,000. For veterinary science it gave£21,000, and for charities to do with horses another£10,000 was paid. If my mathematics are correct£73,850 was paid before the breeders received anything.

I hope that my right hon. Friend will pay attention to this, because it means that we shall not be able to give any money to the National Stud to stop animals going abroad, and certainly nothing to improve British bloodstock. British breeders maintain that we must produce horses that can go for a mile, a mile and a half, or two miles, and we must give prizes to encourage the breeding of horses capable of running such distances.

It will probably be asked why we should help breeders when exports from this country are pretty big. Inquiries from three leading agencies which export bloodstock show that their export figures cover horses for races of a mile and a quarter or more. Such horses make up 90 per cent. of their exports, particularly to the dollar areas. The total export of horses brings in about£2 million a year. It is therefore important that we should cater for this branch of the business.

Many hon. Members have said that it is important to install ciné-cameras to see if cheating occurs. I know that there is not a lot of cheating on English racecourses, but the installation of a ciné-camera would help everyone who placed a bet, and would help to produce fair results.

The installation of a photo-finish camera would also be of great assistance. We are about the only country which does not have a photo-finish camera on every racecourse, and there are few jumping courses that have one. One has to leave it to the human eye to decide whether hundreds of thousands of pounds shall change hands as a result of a race.

If racecourses are to have good new stands one hopes that more people will go to the races. The racecourse owners will therefore make bigger profits, and if they do so we must ensure that the money is returned to racing, and thus to the benefit of the sport.

It has become fashionable in the City of London for take-over bids to be made. Now the racecourses are suffering, sometimes by speculative dealers and sometimes by Ministry of Transport prospective buyers. We must ensure that any money lent to racecourse owners is paid back to the Board if the racecourse is taken over within, say, 10 to 15 years, otherwise the money will have been poured down the drain.

I am pleased that we are to have this levy to help racing. It is not just to help some rich racehorse owners; it is to help the sport of racing, and every one connected with it.

5.55 p.m.

Mr. Eric Fletcher (Islington, East)

The House will appreciate the fact that the Home Secretary intervened when he did and gave the House the benefit of his views, both in respect of those matters on which he had already reached some definite conclusion, and in respect of these matters on which he still had an open mind and on which he invited contributions from hon. Members on both sides of the House.

The Opposition regard this as a nonparty matter. Just as no Opposition Whips were put on at any stage of the Betting and Gaming Bill, so in regard to our discussions on the Peppiatt Report, and anything that may flow from it, the Opposition's view is that there should be a free vote by Members on this side of the House and, should there be a Division as a result of this Motion, hon. Members on this side of the House will be free to vote as they think fit.

We regard the debate and the proposal for a levy as part and parcel of the Betting and Gaming Bill, and I should like to make a few observations on three matters: first, the timetable, on which the Home Secretary invited comments; secondly, on the principle of this levy; and, thirdly, on the matters of detail on which the Home Secretary said that he still had an open mind.

I have said before that it is perhaps a little unfortunate that the Home Secretary did not set up the Peppiatt Committee earlier. I do not think that his timing of the matter has been particularly happy. A great deal of legislative time would have been saved if the Committee had been set up six months earlier and if its recommendations had been available when the House considered the Betting and Gaming Bill on Second Reading; and, perhaps more particularly, when it was considered in Committee upstairs. If that had been done we would have avoided considerable duplication of debate, and it would have enabled hon. Members to have seen the whole subject, both as regards the legislation of betting offices and the levy, in a better perspective.

It has become clear that a levy on bookmakers for the purpose of subsidising horse racing becomes a practical possibility only if one has a system of registering bookmakers and having effective control over them. Such a system of registration and control will be possible under the Betting and Gaming Bill. It is fair to point out that if the Peppiatt Committee had been set up earlier and if it had reported in the sense in which it has reported, before the Bill was introduced, it would have been apparent to every hon. Member, which was concealed until recently, that the most potent argument in persuading the House of Commons to legalise betting shops was in order to set up a system for the registration of bookmakers so that a levy could be raised on their takings for the benefit of racecourse owners and race horse owners.

It is no secret that the Home Secretary has been under considerable pressure on this subject from the Jockey Club and other vested interests. It is no secret because Lord Sefton, the senior steward of the Jockey Club, made it plain in a speech at the end of 1958—a year before the Betting and Gaming Bill was introduced—that the support of the stewards of the Jockey Club for a Betting and Gaming Bill would be forthcoming only if there was provision for a levy, because, he said, it was essential that money bet on horse racing should contribute to horse racing. We must remember that the price paid for the support of the Jockey Club for the proposal to license and legalise betting shops was the promise to introduce the levy.

I am not saying that the proposed levy is wrong merely because it was instigated by the Jockey Club, but it is essential that the House should consider whether the proposal for a levy corresponds with the public interest as well as with vested interests. Various hon. Members have pointed out that in certain sections of the Peppiatt Committee's proposals for a levy its enthusiasm is lukewarm, to say the least. Therefore, although on the balance of the arguments presented by the Peppiatt Committee I support its conclusion that there should be a levy, I would also say that the Home Secretary is right in deciding that the machinery for setting up the levy should be the subject matter of a separate Bill.

The Home Secretary was a little modest when he said that he could not tell what would happen in another place by way of Amendments to the Betting and Gaming Bill. It is obvious that he is in complete command of the position in that respect and can decide whether or not the machinery should be introduced in another place. But this debate has at any rate shown that the problems arising out of the introduction of the levy are so complex that they could not possibly be fitted into the framework of the Betting and Gaming Bill which has been passed by this House and is shortly to be considered in another place.

I have said that on balance, notwithstanding the rather hesitating remarks made in paragraph 19 of the Peppiatt Committee Report, and also its statement in paragraph 54 that it does not think that the needs of the industry are so pressing that the delay should have a serious effect", the conclusion is inevitable that, subject to a few safeguards which I shall indicate, a levy is desirable.

We must not exaggerate the arguments put forward by some hon. Members. There is no doubt that the levy will be of some value to the export trade, in the export of bloodstock, but the most optimistic estimates of the value of these exports is only£2½million a year, which is trifling when compared with the volume of our total exports. As to the amount of the levy, the Committee was correct in rejecting the argument of the Jockey Club that as much as£3 million was required. I would have thought that a figure of£1 million or£1¼million was much more appropriate.

I was a little startled to hear the Home Secretary suggest that the amount would probably be left completely at large in any legislation which the House is invited to pass. I would have thought it a most serious precedent to suggest that this House, by Statute, should give permission to a private body to impose an unlimited levy upon a section of the community. Surely that is not right. On reflection, the Home Secretary must realise that the House should be in complete control of any body of private individuals in the matter of the amount which that body can extract, by statutory levy, from any section of the community.

Although a levy is justified in the special circumstances of this case, the House must realise that it is contrary to our fiscal arrangements to levy a special tax on a special class of taxpayers for special purposes. It could well be argued that if any sport which is regarded as of such national importance as to justify a subsidy cannot support itself financially, that subsidy should be raised in the normal way. The House should always bear that principle in mind.

The Home Secretary has sought to tell us that the proposed levy is not creating a precedent. Some precedents are re- ferred to in paragraph 22 of the Report, but that paragraph points out that none of those precedents provides an exact analogy. The levy payments under the agricultural marketing schemes are of a totally different character, and perhaps the nearest analogy is the levy on cinema takings. But even that is not an exact analogy. If we eventually adopt the principle recommended by the Committee and sanction a statutory levy, we must realise that we are introducing a departure from all existing precedents, and that each new precedent must be carefully scrutinised by the House.

The danger is that if money taken from bookmakers is given to the horse racing and horse breeding industries, the organisers of other sports feeling financial pressure may well encourage or permit betting in relation to their sports and then ask for a contribution to be made from such betting. If football clubs run into financial difficulties, will they be entitled to approach Parliament with a view to obtaining a statutory contribution from the football pool promoters? Unless we are careful we shall find ourselves on a slippery slope.

There are certain advantages to be gained by the proposed levy. One is that it will enable the House and the public to obtain much-needed information about the volume of betting in this country. The Peppiatt Committee, in more than one part of its Report, indicates the absence of any reliable evidence on that score. This is a matter of special interest not merely to those concerned with betting and gambling but—from a social point of view—to the whole community, including those who never indulge in betting.

The Home Secretary has invited comments on certain details of the proposed levy, especially with regard to the method of collection, the constitution of boards, and the distribution of proceeds. Although I am conscious of the defects inherent in any scheme adopted, I would prefer the method suggested by the Peppiatt Committee, namely, that it should be a levy on profits rather than a levy calculated on turnover, the number of telephones operated, or the size of the staff. Difficulties are involved in any scheme. If there is to be any abuse it will arise whatever form the levy takes. I think we should accept the advice of the specialists on the Committee who investigated the various alternatives and recommended a levy on profits. I would have thought it desirable to have a provision in the scheme for the accounts of the bookmakers to be audited and also verified by an independent auditor.

It is essential and desirable that the two Boards and their functions should be quite separate and distinct. The Bookmakers' Levy Board should be responsible for its own domestic problems in the collection of the levy from its members and the Central Board, responsible for distributing the levy, should be a small, independent and powerful body. Certainly the Board should be divorced from the interests of those who will benefit from the levy. I do not think it equally essential that the donors should be represented on the Board, but the paramount consideration is that this Board, preferably under a full-time chairman of recognised stature, should be such as to inspire confidence in the racing community and in the general public.

I hope that further thought will be given to the precise powers to be given to the Board regarding the maximum amount it can decide should be claimed year by year. The Home Secretary acknowledged—other hon. Members have referred to it—that one of the merits of this scheme is that it provides for an annual review and therefore it will contain the maximum flexibility and elasticity. Nevertheless, I think control must be retained over the total volume of the levy which the Board should be authorised to collect year by year.

In the Report of the Peppiatt Committee it is suggested that the Home Secretary should have power to propound a scheme. I hope that it will be found possible to schedule the proposed scheme to the text of the Bill and not leave the matter completely vague so that a scheme may subsequently be introduced by a Statutory Instrument under the powers contained in the Bill. It would be much more satisfactory if, at the time when the Bill is introduced, we knew the kind of scheme which the Home Secretary has in mind. I support the suggestion that the chairman of the Bookmakers' Levy Board should be a member of the Central Board. That would provide just the right amount of liaison and cohesion between the two boards.

I appreciate and support the desirability of a large part of the levy being used for the improvement and the increasing of racecourse amenities and perhaps facilitating a reduction in the price of admission for the public. It is also desirable that a substantial part of the levy be devoted to increasing the prizes for races and thereby giving that amount of encouragment to race horse owners and relieving them, for the time being, of the contribution they make at present.

I observed that the Home Secretary failed to mention something which I wish to stress, that a substantial part of the proceeds of the levy be devoted to the cause of veterinary science and research. The Home Secretary did not mention that as one of the objectives, although it is one which prompted the Peppiatt Committee to recommend a levy. Veterinary science and research has been neglected and it is desirable that the importance of this should be recognised statutorily by the application of money in that way. I echo what the Home Secretary said in his speech. I hope that this debate will have served a useful purpose in enabling the right hon. Gentleman to frame proposals which will prove broadly acceptable to hon. Members on both sides of the House.

6.16 p.m.

Mr. J. Enoch Powell (Wolverhampton, South-West)

In the few minutes during which I shall detain the House I wish to refer to the manner and not to the matter of what is proposed in the Report of the Peppiatt Committee. Nevertheless, the manner of what is proposed could be of considerable importance, and I found myself sharing the anxieties on this score which were expressed by the hon. Member for Islington, East (Mr. Fletcher).

This House has decided that for reasons of public policy and good order no one shall be allowed to ply the trade of a bookmaker without a permit. The suggestion in the Peppiatt Report is that it should be a condition of obtaining or retaining a permit that the holder pays a substantial sum, far in excess of the cost of issuing and registering the permit. In effect, that is a tax imposed by the authority of this House. This will be seen very clearly if one takes the close analogy of the Motor Vehicle Licence Duty. No one is allowed to use a motor vehicle on the road unless the vehicle is licensed; but to obtain a licence an applicant has to pay a sum which brings in—and is intended to bring in—vastly more than the cost of administering the licensing system.

In this case, however, the tax is to be assessed and levied by a special body, the Levy Board, and is to be applied to a specific purpose by another special body, the Central Board. It is, therefore, an assigned revenue, that is, revenue designated in advance for a specific purpose or application; it is, moreover, a revenue which is both raised and applied otherwise than under the direct control and authority of this House. That is a departure from what I might call the principle of the Consolidated Fund, upon which the public control of finance by this House basically rests—the principle that all revenue which is raised by the authority of this House shall be paid into the Consolidated Fund and that all payments which are made by the authority of this House shall be made out of the Consolidated Fund.

It is no part of my purpose to consider whether bookmaking is a suitable subject for a duty, for a tax, nor is it any part of my purpose to consider whether it is justifiable that racing should be subsidised, that is, that all the various hobbies, sports and trades which are comprehended under the term "racing" should receive moneys which they cannot voluntarily attract—though I must say, in passing, that it seems to me it would be extraordinarily difficult to establish any logical case for such a subsidy.

If, however, those two questions—whether bookmaking is a suitable subject for taxation, and whether racing is a suitable subject for subsidy—are answered in the affirmative, then I say that the revenue ought to be raised in the proper way and in the ordinary fashion, as under the authority of this House, and that the payments ought to be made in the ordinary and proper way upon a Vote of this House year by year.

I know that there are precedents, of a kind, for what is proposed, although, when my right hon. Friend the Home Secretary reminded the House of the collection of precedents to be found in paragraph 22 of the Report, I thought them a rather grisly collection. But there are precedents for all the errors to which humanity is prone—of course there are —and the mere existence of a precedent for doing something of this kind is no argument in its favour.

Mr. R. A. Butler

What would the view of my hon. Friend be about the levy which the Tote Board exacts and then provides for the benefit of racing?

Mr. Powell

That seems to me basically different, although, even if it were the same, I should still be saying every word I am saying this afternoon.

It seems that what has happened there is that Parliament has authorised a kind of monopoly and has made it a condition of authorising it that the returns to that monopoly should be applied in a particular way. So I think that there is a big distinction there, although I do not believe that, even if there were a precedent, its existence justifies us in departing from the basic principle of the Consolidated Fund.

There is an extra reason why we should be particularly hesitant about doing so just now. This is a time when all sorts of private interests, trades and concerns—no doubt, each for the very best reasons in the world—are pressing their claims upon the revenues and moneys which this House raises, or allows to be raised. Therefore, at this time, above all others, I think that we should hold fast to the normal principles of public finance. If we are to tax bookmaking, we should tax it openly; if we are to subsidise racing, we should subsidise it openly; and we should do both in the proper way.

6.22 p.m.

Mr. R. Gresham Cooke (Twickenham)

I am rather surprised that, as the shades lengthen outside, the shades of doubt seem to be creeping in on this Report of the Peppiatt Committee and its proposals for a levy.

Of course, there are many precedents outside this country of levies to assist racing. They are not only in France, America, New Zealand and many other countries, but there are precedents in this country for the assistance of one type of industry by another. I have in mind the scrap levy which was in operation for many years, by which scrap merchants kept down the price of scrap. That was a case in which, before, during and after the war, one part of the steel industry assisted another.

If this House agrees that there should be some sort of assistance to racing, I should not like it to come out of the pockets of the taxpayer, but out of one part of the racing industry which is dependent on racing. I do not look at the matter from a specialist point of view, but I occasionally go to race meetings. On the borders of my constituency there are racecourses at Hurst Park and Kempton Park.

When I looked at the provisions of the Peppiatt Report I was very much struck to see how much assistance comes from betting to racing in other parts of the world. In New Zealand, there is the Totalisator Agency Board, which raises no less than£600,000 a year. It gives£52,000 to the Auckland Racing Club,£21,000 to the Auckland Trotting Club and£19,000 to the Hawke's Bay Racing Club, and so on. So here we are not doing anything at all unusual. On the basis of the£600,000 raised in New Zealand, where there are no bookmakers, we could raise a much larger sum in this country.

That sort of arrangement overseas has enabled owners and breeders, particularly owners, in other countries to contribute much less to racing in the form of stakes. My hon. Friend the Member for Manchester, Blackley (Mr. E. Johnson) said that, whereas owners in this country pay 33⅓ per cent. towards the stake, in America the amount is as low as 1 per cent. The results of these arrangements are that, whereas the average owner in this country I understand, is losing money, in a country like France the average owner can just about break even and make his hobby cover his expenses.

A friend of mine who is a breeder in a moderate way, has been kind enough to open his books to me to show me the sort of difficulties which a breeder in this country has to face. He certainly has very heavy expenses. I cannot imagine any breeder in a small or moderate way of business making a profit at present. This friend of mine put to me one or two points which I wish to pass on to my right hon. Friends as being worthy of further consideration.

The first is on the question of the tax position which arises on the payment of levies to the horse racing industry. Under the 1928 Racecourse Control Betting Act, it was envisaged that the sums paid from the Totalisator Fund would be tax-free to the racing industry, but, under the House of Lords decision, tax had to be paid on them. Therefore, only about half as much went into the industry than was expected to go to it. If we give legislative form to the recommendations of the Peppiatt Committee, we should make up our minds exactly how we expect these sums to be paid, whether, if used for capital purposes, they will attract any tax and, if used for revenue, whether they are to be taxed or not.

The second point is that the grants envisaged for breeders should perhaps be attached to the prize money on races in the same way as is done in France. When a horse wins a race in France not only does the owner get a prize, but the breeder gets a prize as well. I think that that is a sensible arrangement. The English breeder of a horse racing in France does not get any share of the prize money. I think that, equally, the French owner who wins a race over here should not get a share of the breeder's prize money in this country. We should consider the connection of the Irish breeder. I understand that his expenses in rearing yearlings are considerably less, about a third less, than they are in this country. The money going into this fund will come from English bookmakers, so it is very arguable whether the Irish breeder should expect a prize from this fund.

A further point I wish to put to my right hon. Friend refers to the way in which the levy should be raised. I have had experience in industry of raising levies for various purposes, such as for research. There are various ways of doing it, such as on turnover and profits. In the case of turnover, in industry one always has a check in the published accounts of a public company, but with bookmakers, presumably, there will be no check except the auditors' certificate, because they do not publish accounts. Bookmakers would no doubt say that it was unfair to levy on turnover, because if they made no profit it would be an added cost on which they received no return. I therefore imagine that we shall have strong representations from the bookmakers that the levy should be assessed on profits.

If we do that, I am not sure that the scale recommended by the Committee is right. It could be divided into smaller steps. I do not like to see one step from£12,500 to£40,000, all paying one levy. The scale could also be taken a little higher. Bookmakers did not have to show their profits before the Peppiatt Committee, and it may be that some are making£60,000 a year. I see no reason why a bookmaker who makes£60,000 profit should not pay, for instance,£300 in levy. It must be remembered, as Mr. Hammond, of one of the Tote betting companies said, that this will be a charge against revenue, and, therefore, we should take into account the gross profits of the bookmakers before tax.

I am inclined to the view of the Jockey Club that£1¼ million is not quite high enough as the target. If a small country such as New Zealand can raise£600,000, surely we in this country could raise£6 million, if we set our minds to it, for the benefit of racing. In that connection, I hope that the breeders' prizes will not all be channelled through the National Stud. There are complaints against the National Stud, one of which is that the best horses, such as Never Say Die, go only to a very small circle of owners and the small or medium owner does not get sufficient chance with the National Stud. In Ireland, there is a rule by which any owner shall be allowed an appointment with the best horses every other year. That kind of arrangement ought to be made in this country.

If this fund is to be provided for the benefit of racing, there is a special case for some of the benefit being applied to help farriers. Where there is "no foot there is no horse", and we are getting very short of farriers in this country. I understand that there are only two firms left in Newmarket, and one has not been able to take on apprentices for twenty-five years because the terms in the blacksmiths' business are so poor at present. The question is urgent and ought to receive the attention of the Central Board.

Having decided, in principle, that I want to support racing and breeding, I do not agree with the suggestion by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) that this money should come from the taxpayer. It is right, as the Peppiatt Committee said, that it should come out of racing. In view of the fact that it is done in that way in many countries and that the prizes in other countries are far higher than they are here, we could follow that example. For example, the Prix for the Arc de Triomphe in France is£48,000 and is likely to be increased in the very near future. In Brazil, the top prize in international races is£40,000. In this country, the best prize is£24,000, for the King George VI and Queen Elizabeth stakes.

Taking all these things into consideration, we can support the Report. There will obviously be a number of details to which it will be necessary to pay special attention. Having said that, I give the Motion my support.

6.35 p.m.

Mr. Simon Wingfield Digby (Dorset, West)

I am glad that we have an opportunity this evening to discuss the Peppiatt Committee's Report, for we were handicapped while discussing the Betting and Gaming Bill in not having the Report before us.

In the circumstances, the Peppiatt Committee has done a very good job. The Report is short and perhaps even sketchy, and it did not provide the hon. Member for Brixton (Mr. Lipton) with the information which he required. Nevertheless, it has fulfilled what we need.

I welcome the Home Secretary's statement this afternoon, and I believe that it is right to endorse the general provisions of the Report, although I was glad to hear him say that his mind is not yet entirely made up about some of the details of the Report, because there may be grounds for improvement.

When discussing racing we should remember that it is a traditional sport in this country. We have a unique achievement in that we have developed the thoroughbred from only three stallions. It has spread throughout the world and is unchallenged in horse-flesh. That may have become of theoretical importance in these days of mechanisation but it is a great achievement.

At this stage I ought to declare an interest as a rather new owner and breeder. I do so at once. I should like to endorse what has been said about the hazards of owning horses. I own primarily because I am a breeder. The Home Secretary quoted a remark of Byron about becoming "sager in the course of betting." Already, I am sager in the course of owning, and I am finding that it is rather an expensive business.

The case for racing has been well made out this afternoon. There are undoubtedly many people who take a great interest in it. Since I became an owner I have found that more people than I ever expected are interested in racing. I think that the solution suggested for the difficulties of racing—the introduction of a levy—is along the right lines. It has been rightly pointed out that the principle of assistance to racing from betting was accepted in the Racecourse Betting Act, 1928. What we are doing is extending that principle.

It would have been open to the Home Secretary on the Betting and Gaming Bill to suggest a Tote monopoly in this country and, indeed, other hon. Members have explained how well the Tote monopoly has worked in other countries, but it has been decided not to do that here and, now that the bookmakers have an official standing, I think it right that they should make a contribution to racing.

I am glad to hear that the amount of the levy is to be left flexible. I do not know whether there should be an upper limit. But I am a little mare doubtful about the method of raising the levy. I am not a chartered accountant, but it seems to me that there is always some difficulty in determining profits. If one wants to give one's manager a percentage of the profits, it is always difficult to arrive at exactly what they are. I am far from convinced that profits form the right basis on which the levy should be raised. Various other possibilities have been suggested, such as rateable value, turnover, number of employees and telephones, and I think that a formula could be found which would include more than one of these criteria so that it would be certain that it was absolutely fair. It is essential that the levy should be fair.

The next important question is that of the Central Board, which will decide how the money is to be distributed. The composition of that Board is all- important, and I agree with my hon. Friend the Member for North Fylde (Mr. Stanley) that it is undesirable that those who are to benefit from the distribution should be on the Board. I should like to see the number kept fairly small, but it is no use putting on it people who do not know a good deal about racing. I hope that my right hon. Friend will have another look at this problem.

I come now briefly to the all-important question of the distribution of the levy. The Racecourse Betting Control Board distributes£76,000 a year in various ways under its trust. Twenty-three thousand pounds goes to the Hunt Improvement and National Light Horse Society, but only£4,000 goes to the Thoroughbred Breeders' Association. That is a very small proportion if an attempt is being made to improve the breed of racehorses.

The lion's share of the distribution proposed in the Report—far more than half—will go to racecourses. Nearly everyone who has spoken has agreed that this is necessary. Those who know more about racecourses overseas than I do all say that amenities are much better and admission is far cheaper, so we can hardly quarrel with that distribution.

Secondly, it is proposed that£100,000 should go to breeders. This will apparently do two things. It should provide breeders' prizes and it will buy stallions. Anyone who knows the price of a good modern stallion wonders how the sum will do both those things, because the real problem for the smaller breeder is to find a stallion that he can get to. He wants something fairly good, but not quite in the top class. It is not very easy for him to find that at present.

It is then proposed that£250,000 should go in increased prize money. Much has been said this evening about prize money, but what we must remember is that the average owner of the future will probably be the small owner with very few horses. Many of those horses will never win a prize. What is difficult for the smaller owner is the number of forfeits, the money he loses when his horse does not even compete in the race in the end. The forfeits, namely, the money often paid out for horses with very little chance of winning, make it difficult for the smaller owner, to whom I hope the future does belong.

Travel is very

expensive. The Tote is giving£180,000 a year in travel allowances. That money is very well spent indeed. I am not sure whether in these days of smaller owners we should not seriously consider more concentration of flat racecourses. This should perhaps be encouraged by the Central Board in its distributions. The object should be that horses do not have to travel so far to racecourses. This system operates very much more in France.

Finally, there is the question of runners' allowances to help animals which never win races, but run in them. Up to a point, they should be encouraged to do so. The Tote paid runners' allowances until recently, but that has been discontinued. The money would probably be better spent in that way than by augmenting already large prizes for the bigger races which few ordinary owners can hope to win once in a lifetime.

I hope that the distribution will be looked into. If possible, some guidance should be given to the Central Board on how the money is to be distributed. I hope, also, that the composition of the Central Board will be gone into, but it should be kept small.

6.43 p.m.

Mr. F. H. Hayman (Falmouth and Camborne)

I am sorry that I have not listened to the whole of the debate, but it has seemed to me that it has probably been a debate of specialists. It is time the voice of an ordinary person who does not care two pence about racing is heard. After all, Parliament represents the people of the country as a whole. In my part of the country, Cornwall, the bulk of the people are just not very interested in racing.

Lately in the newspapers, particularly the popular newspapers, we have read about the late Aly Khan leaving millions of pounds worth of horses here, in Ireland and elsewhere. There has been speculation about taxation, death duties and so on. Now we learn that the Aga Khan is to take them over. I begin to wonder where this money which is proposed to be raised will go. The hon. Member for Dorset, North—

Mr. Wingfield Digby

Dorset, West.

Mr. Hayman

The hon. Member for Dorset, West (Mr. Wingfield Digby) is equally in the dark. When I read in my local newspapers that some football clubs and cricket clubs are closing down because of lack of finance, and that many others can keep going only by subscriptions from people who feel like supporting them, it is brought home to me that we should think twice before we pass legislation to provide money for horse racing.

I do not care where it comes from, but in the end I have no doubt that the money paid out by bookmakers will escape Income Tax and Profits Tax. The hon. Member for Willesden—

Mr. Gresham Cooke

Twickenham.

Mr. Hayman

The hon. Member for Twickenham (Mr. Gresham Cooke) spoke about incomes of bookmakers of£20,000 or£40,000. This industry ought to be capable of financing itself, and I agree with the hon. Member for Wolverhampton, North-East—

Mr. Powell

Wolverhampton, South-West.

Mr. Hayman

The hon. Member for Wolverhampton, South-West (Mr. Powell) said that, if we are to finance this industry by legislation, it should be done in a decent way, perhaps out of taxation, so that everybody knows where we are going. I begin to wonder whether it is necessary. Who will get the money which will be provided if the proposal goes through? It will go, in the main, to Surtax payers.

Major Hicks Beach

The hon. Member has told us that people in his part of the country do not agree with racing.

Mr. Hayman

I did not say that.

Major Hicks Beach

Not all. Has the hon. Member any idea of the attendance at Buckfastleigh, Newton Abbot, and Devon and Exeter races, three of the most popular meetings in that part of the country? If he is seriously advocating that they should be abolished, he is on the wrong leg.

Mr. Hayman

The attendance at Buckfastleigh is probably 3,000 to 5,000. The population of Devon and Cornwall together is 1 million.

Major Hicks Beach

What about Newton Abbot?

Mr. Hayman

I am speaking about the relativity of populations. Cornwall has a population of 340,000. I will not say that a referendum in Cornwall would not show a majority in favour of this proposal, but a great number of people in Cornwall would be opposed to it. I am neither opposed to it nor in favour of it. We should be very careful before we pass legislation to support horse racing.

6.48 p.m.

Mr. Ronald Bell (Buckinghamshire, South)

I join in the congratulations which have been paid to my hon. Friend the Member for Manchester, Blackley (Mr. E. Johnson) on having introduced this subject and to Sir Leslie Peppiatt and the members of his Committee for the work they have done in considering it. We should all be very grateful to them. I have some doubts about the wisdom of the course they recommend, and those doubts have on the whole survived the speech of the hon. Member for Cornwall—

Mr. Hayman

Falmouth and Camborne.

Mr. Bell

I was not going to risk stating which geographical corner of Cornwall the hon. Member represents. I thought that thereby I would avoid at least one of the errors with which his speech was studded. I do not own a racehorse, as my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) does, nor do I own a racecourse, as my hon. Friend the Member for Bromsgrove (Mr. Dance) does. Therefore, I feel almost a stranger to this subject.

My first reaction to these proposals was that, if bookmakers want to subsidise breeders and race horse owners, this was a little private arrangement in which I should not interfere. However, after reflection I am in some doubt about whether bookmakers are full of enthusiasm for doing this. I do not say this by way of criticism of the Report, but in it the evidence of breeders, race horse owners and trainers is summarised but there is no reference to what bookmakers thought or said. That may be because they speak with divided voices. Some do not want to pay at all; others think that it is probably better to get in on the ground floor and strike a bargain, which sometimes means that one does better than by just putting up unqualified opposition.

I am not sure, however, that this is a consent bargain. Even if it were a consent bargain, my right hon. Friend the Home Secretary has now made it clear upon what basis this would be done. This, of course, is not in the Report. It would be done by a levy allowable as an expense against taxation —and, of course, it must be so. Some of the figures referred to by the hon. Member for Falmouth and Camborne (Mr. Hayman) will be the profits of companies, which will not, of course, be liable to Surtax, but I should say that about half of the amount will come not out of the Exchequer but from a diminution of the national revenue. Therefore, as to about 50 per cent., this is an Exchequer subsidy on racing.

That may or may not be a good thing, but I share the doubts expressed by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) as to the way in which this kind of thing gets done. If we are to give about£700,000 out of public revenue to racing, let us debate it on that basis and see how we feel about it. It may be right, it may be wrong—as I say, I am not a racing expert. My doubts are really based on the fact that every time we do this it seems to be used as a precedent to do a bit more next time.

My hon. Friend the Member for Dorset, West used a phrase that sent a chill down my back. He said that it was merely extending the principle into another field. In the context, the use of the word "field" is very appropriate, but it is precisely what my hon. Friend referred to that worries me. He said that the principle of subsidising had been established by, I think, the Tote, and that this was merely extending it.

Paragraph 22 of the Report gives a list of other occasions on which this has been done. The first is the levy on cinema takings. I would agree that that is a very comparable levy, but it has always been put to us as a totally exceptional case—one that we should agree to because of its very special nature, and certainly not one that should be taken as a starting point for an ever widening ramification of this kind of proceedings, so correctly described by the person who wrote to the right hon. Member for South Shields (Mr. Ede) as the subsidising of one industry by other attendant industries, all being private industries, and all run for profit. It is a dangerous principle.

The second case mentioned in the Report is the sugar surcharge mechanism. With respect, that is not the same thing. That is a device for regulating the internal price of a commodity while at the same time not putting the export trade at a disadvantage in relation to countries where a similar regulatory system is not in force.

The Report next cites the levy on the cotton industry. That levy was justified in this House as being a once-and-for-all operation to encourage the industry to sweep away its old machinery, and to make a fresh start after what some hon. Members thought was a quarter of a century of stagnation. That was a very special case and a once-and-for-all operation.

The Report then refers to the levy payments under agricultural marketing schemes. Again, the case appears to be materially different. Those are producers' organisations, and they raise the levy partly to meet the administrative costs of the boards and partly to finance things like the encouragement of research and the improvement of the packaging and marketing of the people who pay the subscription. It is a sort of co-operative enterprise and not really to be regarded as a form of taxation of one section of the community for the benefit of another.

As I say, I am not an expert on this subject, but I still need to be satisfied that racing is a special case for which we should and could make another exception without laying ourselves open to further extensions to fresh fields in the future. If one glances at the arguments put forward by witnesses to the Committee, they are a little unconvincing. It is not for the encouragement of exports, because one reason given is that exports have been too high. Then we are told that the aggregate yearly costs to owners of race horses before the war was about£1 million while it is now over£2½million. If the ordinary person can today buy for 2½d. what he bought for a penny before the war he counts himself rather lucky.

The general level of prices has risen by more than two and a half times, which means that the total burden on race horse owners new is less than it was before the war—

Mr. Digby

There is tax, of course.

Mr. Bell

That is a point. The real difference is not the extra burden on the racehorse owner, because there is not any. The difference is that the taxation of the individual is now so high that it is very difficult for the private person to carry on this kind of activity. If that is so, we should face it on that basis. I do not claim to say whether it is right or wrong; I just do not like, by instinct, this way of going about this sort of operation.

I shall not detain the House longer. I have explained how I feel on this ubject. I am sorry that the Government announced their intentions before hearing what hon. Members on both sides had to say. I hope that the Home Secretary will not feel himself committed by anything he has said today or on a previous occasion, but will carefully think out the constitutional implications of what is proposed—I will not say in the Report, but by the Government's announcement.

6.58 p.m.

Sir John Barlow (Middleton and Prestwich)

I must declare a limited interest in horses, having had a very few thoroughbreds for many years—for far too many of them—and a few other horses as well. I know very little about betting. Literally, I have not placed a bet on a horse for thirty-five years, because I found it such an expensive hobby when I did so long ago.

I am very glad indeed that my right hon. Friend the Home Secretary is to help us to carry through the recommendations of the Peppiatt Committee. It seems to me that we should encourage the breeding of medium- and long-distance horses. They have a tremendous value to the country and to the world. It may be said that the total export trade does not amount to very much. That is true, but it has consistently been a valuable export dollar earner for many years, and has helped to attract visitors.

If we were to let this great industry diminish it would be a sad day not only for English thoroughbreds, but for English pedigree stock breeding in general. My hon. Friend the Member for North Fylde (Mr. Stanley) suggested that bookmakers should carry out their own proposals to raise this money. I entirely agree. They are much better fitted to do so.

Question put and agreed to.

Resolved, That this House takes note of the Report of the Departmental Committee on a Levy on Betting on Horse Races.