§ I turn now to the question of gambling. As the Committee will be aware, my hon. Friend the Financial Secretary said last year that a review would be made of the whole field of gambling, and accordingly, 465 I asked the Customs and Excise to study the practical problems involved. Experience of the past, and particularly that of my right hon. predecessor the Member for Woodford (Sir W. Churchill), clearly enjoins on any prudent Chancellor the need for great caution in this field. Yet it is one that cannot properly be ignored. There are two reasons for this.
§ First, there is a growing feeling, which I share, that gambling is a form of expenditure which should contribute towards the rising cost of social and other Government expenditure. The extension of betting, and the development of new varieties of gaming, have lent strength to this feeling. Secondly, the present system whereby some forms of gambling are taxed while others are not is clearly unsatisfactory. I have, therefore, been looking at the whole field with the purpose of discovering a general system of taxing gambling which will be both fair and effective.
§ The studies we have made to date have brought out the many difficulties. In the first place, the amount actually spent on betting is far less than figures often quoted. These represent the total turnover, which is many times higher than the net expenditure. No one can say with any certainty what is the total turnover on commercially organised betting still less on gaming, but figures in the region of £700 million a year or more have been suggested. Most of this money, however, is returned as winnings which may in turn be restaked over and over again. The net expenditure on betting, that is, the amount of money by which the betting public is out of pocket, is very much smaller than the turnover: it is probably not much more than £100 million a year.
§ Then there are the great practical difficulties involved in establishing a form of taxation in the field of gambling which can be properly enforced. What weighs even more with me, however, are the considerable social issues involved. The recent legislation has cleaned up the scandals associated with illegal bookmaking, and it would be very serious if this process were reversed. Finally, the levy system in support of the horse-racing industry is still in its early days, and, as the figures recently published show, it is far from fully effective as yet.466
§ I have, therefore, concluded that I need to make much wider studies of the practical and social issues involved than has been possible so far, before I can, with confidence, recommend to the Committee a new tax on gambling which would be fair, effective and socially desirable. Meanwhile, because we have as yet no adequate information about the extent and nature of gaming, I propose that the Customs and Excise should compile a register of all gaming institutions, including in this those often very profitable machines known as one-arm bandits. With this information I should be in a position to judge the practical considerations involved in taxing gaming as part of a comprehensive approach to the taxation of the whole field of gambling.