§ 10.9 p.m.
§ Mr. John M. Temple (City of Chester)
I beg to move,That an humble Address be presented to Her Majesty, praying that the General Betting Duty Regulations 1966 (S.I., 1966, No. 1157), dated 16th September, 1966, a copy of which was laid before this House on 22nd September, be annulled.It is, perhaps, not inappropriate, in a slightly noisy atmosphere, to introduce a Motion which is concerned mainly with the "Sport of Kings". There is associated with that sport, and particularly with these Regulations, the noises of the racecourse, so it does not seem entirely out of place that there should be, at least at the beginning of this debate, a certain amount of noise as hon. Members leave the Chamber following the last Division.
In June of this year we made it clear from this side of the House that we were not opposed to a general betting duty and I therefore make it clear at the outset of my speech that we do not intend to divide the House on these Regulations. What we criticised during the passage of the Finance Act, 1966, was the method of collection suggested by the Government. I say "suggested" because it was far from clear what the method of collection was to be. Now we have these Regulations we see that they endorse the criticisms we made at the time of passing the principal legislation.
This Prayer is moved in a questioning and critical manner, but it is certainly not going to be hostile to the Government. As we see it, the object of the Regulations concerning betting is that they should be efficient and operate comparatively cheaply. We all wish the betting duty to be collected, but we do not want the expense of collection to be unnecessarily high. Nor do we wish that it should cause maximum disruption in the industry concerned. Most of the taxes introduced by the present Government have done that very thing; they have caused maximum disruption. I am afraid these Regulations on betting will be typical.
These Regulations are concerned with three separate groups of persons or organisations. First, we have the race- 1082 course operators, on-course and off-course bookmakers. Then there are the Departments concerned, the Customs and Excise. Here I criticise the Government because once again they are making employers collect a very great deal of this taxation. It is an extraordinarily bad habit which has crept up on the present Government. The other Department concerned is the Home Office. I am afraid that the Home Office did not prove models of perception when the principal gambling legislation was going through the House some years ago. I doubt whether they are models of perception in regard to these Regulations.
The third interested party is the betting public. Whereas the betting public is, I am sure, ready and willing to pay the duty, there is no reason why it should pay the heavy administrative costs of the collection of the duty.
I turn to the effect on the racecourse owners and track operators, the on-course and off-course bookmakers. That is what these Regulations are about. Regulations 31 to 42 are concerned with the race track operators. I make a short quotation from what the Financial Secretary to the Treasury said on 16th June. In those far off days in the summer he made it all sound delightfully simple. He said:All the bookmaker will be required to do will be to obtain daily sheets from the racecourse authorities and this is all that the racecourse authorities will be involved in from the point of view of collection on course."—OFFICIAL REPORT, 16th June, 1966; Vol. 729, c. 1700.]From that it appeared that the race-course authorities would not be involved in heavy expenditure; nor would they be involved in employing extra staff. It would appear that they would give out these duty sheets, however the burden falling on the racecourse owners is very heavy indeed and may have a very serious effect, particularly on smaller courses. The racecourses, unfortunately, have had to establish separate offices for each ring in order to give out these duty sheets. Those offices themselves have to be staffed by a very much higher qualified clerical staff than is necessary for the sale of badges, which is the normal task of a racecourse authority.
Recognising the extreme pressure on local government at present, I do not know whether I should report the 1083 Financial Secretary or the whole Treasury Bench to the Minister of Housing and Local Government, because at Nottingham recently it required two senior officials from the treasurer's department of Nottingham Corporation to help the racecourse authorities to issue these sheets. That merely gives an example of the quality of staff required for the issuance of these duty sheets. The Financial Secretary did not refer to that during the passage of the Finance Bill.
These offices have to be opened some hours before racing, because the issuance of the sheets is a rather time-wasting affair. It takes approximately four minutes to issue one set of sheets by the time the checking is done.
I do not think that the Financial Secretary realised that there was a lot of cash involved. Bookmakers are required to pay cash when they buy these sheets from racecourse authorities. On a small day's racing £1,000 or £2,000 is involved. At a larger meeting about £10,000 is involved. Everyone knows that today when cash is about a high degree of security is necessary, particularly on a racecourse. Extra police are required. Extra cash in transit insurance is necessary. A whole security service may have to be employed on a racecourse. The cost to the racecourses is high—about £75,000 a year.
That says nothing, unfortunately, of the effect of the Regulations on the racecourses concerned when the sale of badges is taken into account. It has been reliably estimated in the last few days that at smaller meetings the cost to the executive is a loss of about £70 per day in the collection of badge money and the cost in extra clerical staff is £30 a day, making an extra cost per day for those meetings of £100. The racecourse executives never dreamed that this heavy cost would fall upon them. Nor did it appear from paragraph 1 of the Third Schedule to the Finance Act—it appeared to be an extremely innocuous paragraph; I have it with me, but I do not propose to read it—that this cost would fall upon racecourses.
The fact remains that it has. Racecourse authorities have taken counsel's opinion on this paragraph and, unfortunately, have been advised that what 1084 the Treasury proposes is intra vires. Nevertheless, it has come as a very great shock indeed. I suggest that what was possibly in the Government's mind was that this money should have been collected by racecourses on an agency basis. That would have been very much fairer.
I turn now to a different aspect of the Regulations, that contained in Regulations 17 and 18, which deal with the position of the on-course bookmaker. Possibly within this section of my speech I shall level the most severe criticism at the Government. I must admit that when I have been speaking from the back benches I have had a rather fellow feeling for bookmakers. At least in the House one does not have a north-easter blowing through the Chamber and blowing one's notes away. However, at a Newmarket meeting in March one is very likely not only to be coping with a northeaster but with a rain squall as well. Under these conditions a bookmaker does not have to keep some notes in his hand. What he has to keep in his hand under these Regulations is a field book. Bookmakers have always kept field books, but under these Regulations they are obliged to keep field books in a different manner from the traditional manner, just because laid off bets have to be returned on the betting duty sheet.
Then they have to keep the duty sheets themselves—a curious buff form which has to be written up in indelible pencil immediately any event has finished. I do not think that the Customs and Excise has been as perceptive as it might have been, because one of the great difficulties arising out of these forms is that the field book is not in the same form as the return required on the duty sheet. Further, one event may well run into another. Take an event where there is a photo finish and a check on it. Take an event where there is an objection. The betting on such an event will run into the betting on the next event. It is very difficult indeed during the busy time on a racecourse for the bookmaker concerned to enter in indelible pencil an entry which can never be changed and get that entry entirely correct.
I submit that the object of these Regulations should be to bring about an exactitude with regard to the entry on that form. I can see no reason why that form cannot be written up at the end 1085 of the day, because the field book which a bookmaker has to keep has to be kept for 12 months and can be checked at any time within those 12 months.
Apart from the keeping of those two records under this umbrella and in these bad conditions, say, at Newmarket, the bookmaker also has to keep a betting duty account book. I certainly would not like the task of keeping all those books under an umbrella on a wet day on any course. I believe that far too much in the way of regulations is being placed upon the bookmaker in this aspect of his work.
Again, I would refer to the question of the timing of these events. Possibly the Financial Secretary has not been to the Waterloo Cup, where one event can follow another with immense rapidity. Sometimes there are 30 seconds between courses. One might get 20 minutes between courses, but there will certainly be 48 courses on the first day at the Waterloo Cup. It is unreasonable to have to write up this betting duty sheet immediately after any event takes place.
§ Mr. J. T. Price (Westhoughton)
Has not the hon. Gentleman considered that one way of dealing with the Waterloo Cup, as with greyhound racing, is to do away with the rotten sport altogether.
§ Mr. Temple
I am dealing with the Betting Duty Regulations at the moment, and I know that the Chair would pull me up if I were to enter into a discussion of any kind on racing in general, let alone greyhound racing.
I stress here the tremendous importance of a strong betting market. On 16th June, as reported at column 1724 of the OFFICIAL REPORT, I said what a disaster it would be if the betting market in this country was weakened. I quote from the Sunday Express of 13th November, when it said in a headline:Racing may slide back to the days of odds riggers.I regard this as the biggest danger facing racing as a result of these Regulations. Already, there are two standards of betting. There is the on-course betting and the off-course betting. Betting is controlled by two different codes. As if that were not bad enough, it is absolutely clear that the betting market today is losing strength almost every moment. The number of bookmakers in the main rings 1086 has already declined by 20 per cent. and in the smaller rings by 40 per cent. The S.P. market is entirely made on the course.
One of the worst features—it is mentioned in the article to which I have referred—is the fact that when we once get a weak market it is possible either for a layer or a backer to manipulate the odds. False favourites can easily be made. They can be made at the present time, but in a strong market it is a very difficult operation and very unlikely to happen. If we get a weak market, as is expected by very knowledgeable people, then indeed all kinds of legal odds-rigging could indeed come about.
Amongst the racing community at the present time a very high standard indeed is kept and it would be disastrous for this country if this market were weakened, thereby increasing the chance of knavery and trickery of all sorts. That is the grave possibility if this course market is weakened to the extent which I think it will be through the exercise of these Regulations.
I turn now to the position of the off-course bookmaker. He has, I think, a comparatively simple and easy task under these Regulations. But I would drew attention to one aspect of Regulations 22 to 28. I refer to the rather curious Regulation which forces an off-course bookmaker or a betting shop operator to make a return to Manchester of all the previous week's business by Tuesday of the following week. I wonder why Tuesday? That provision is possibly all right for the single betting shop, and I am not dealing with the very big chains because I know that they are on a monthly basis. But most betting shop concerns are relatively small—four, six or eight betting shops under the control of one operator.
The main day for the off-course bookmaker is undoubtedly a Saturday. Thanks to the introduction of television, there is a good deal of television betting and to a large extent that takes place on a Saturday. After the close of racing it is necessary for the betting shop men to make a full and detailed return, and that is not particularly simple. They must employ clerical staff late a night on Saturday and possibly on Sunday in order that returns get to their central office, which is only small, by Monday. Then 1087 they must be collated as quickly as possible on the Monday—an almost impossible operation. It has been explained to me that those full returns along with the bets serialised must be in Manchester by the Tuesday.
I should like the Financial Secretary to explain the magic of Tuesday, because it seems that a little more time could be allowed and in those circumstances the normal clerical staff could do the job. A great deal of money is involved. I think that it has been estimated that the cost of extra clerical staff is about £3 a week for each betting shop, and I do not call that a high figure. It certainly does not sound high, but when one realises that there are 16,000 betting shops, it adds up to an extra administrative cost of £2½ million paid out on behalf of betting shops only because of the extra clerical work which probably must be done in overtime hours at the weekends.
I have tried to draw attention to what I call the unfortunate features of the Regulations. The most unfortunate feature is the weakening of the course market, because the British starting price fixed on the racecourse is used not only all over Britain but in the Irish Republic as well and indeed in other countries throughout the world. The last thing we want is to have a starting price return which is not truly representative of the amount of money invested on a particular horse.
I have also drawn attention to the extra administrative burden and costs, which seem to be quite excessive, particularly on the racecourses. Several of my hon. Friends who wish to speak in the debate can give from their detailed experience the effects on various of the smaller and larger tracks in the country. I have dealt with the Regulations in principle only. We on this side of the House certainly support a general betting tax, but our wish is that the collection should be cheap, effective and fair to all the parties concerned.
§ 10.29 p.m.
§ Mr. Alex Eadie (Midlothian)
I cannot claim the same qualifications to speak in this debate as the hon. Member for City of Chester (Mr. Temple). However, I would probably agree with some of the things he said. I have never been on a racecourse in my life, and I cannot 1088 visualise that happening, although it may. Probably the hon. Member for Ayr (Mr. Younger) will find it hard to believe, but nevertheless it is true. There are in my constituency many people—miners, those engaged in industry and so on—who are very interested in the Musselburgh race track in particular. That race track means quite a lot to the people of the area, whether they have a direct or indirect association with it.
In my view, the Government should look again at some of the questions raised on these Regulations. They should re-examine the method proposed for the collection of the tax. I say this for two reasons. It seems to me that the spirit and intention of the Act as regards collection of the tax has been abused. I do not believe that it was the spirit and intention of the Act that the whole responsibility should be put on the shoulders of the various racecourse committees. Second, I do not believe that it was envisaged that an additional financial burden should be put on the committees.
If we are talking of finance and financial burdens, let us not legislate for the collection of money by stealth. If we want additional revenue, whether through the racecourse committees or in any other way under the Act, let us provide for it specifically and not go about it in the way proposed here. Additional expense is inevitably involved. The case put on that ground appears logical and reasonable to anyone, no matter on which side he sits. The merit of the argument suggests that the Government should change their mind about the collection of this tax.
It was never envisaged, for instance, that the additional expense would go to the extent of racecourse committees having to engage extra staff and even, in some cases, having to provide accommodation. The Act provides that they have a responsibility, and the racecourse committees accept it, to co-operate with the Customs and Excise in supervising the way bookmakers pay the tax, but the objection, the very substantial objection, which the committees have is to the way the onus of collection is put upon them. I do not think that it was ever envisaged that they should take on such responsibility and incur such additional expense as are now proposed.
1089 The hon. Member for the City of Chester reminded us that substantial sums of money are involved. Inevitably, the problem of safeguarding those substantial sums of money arises. It is unfair that the problem of security should be thrown on the backs of the racecourse committees. There is also the problem of safeguarding the betting sheets themselves. These are some of the matters I want the Government to take into account in agreeing to look at the matter again.
Suggestions have been put forward which to some extent would lessen the responsibility of the racecourse committees, particularly in regard to betting sheets. It was suggested that the Post Office, which is licensed to do this sort of thing, might accept responsibility for issuing betting sheets, with the racecourse committee stamping the date on the sheets. By this method it would be ensured that the bookmaker had a sheet, and the amount of credit would be credited against him. This would involve a certain amount of expense. But I understand that the racecourse committees are prepared to accept this responsibility as they believe it to be their duty to do under the Act. The main point is that this would do away with their unfair responsibility for collecting the tax.
The case put forward for a review is very strong, and I hope that as a consequence of the debate the Government will see fit to be fairer and more equitable in the collection of this money.
§ 10.37 p.m.
§ Sir Peter Rawlinson (Epsom)
I do not share the experience of the hon. Member for Midlothian (Mr. Eadie) of never having been to a racetrack. I must plead guilty to having been many times. But I very much agree with the arguments that he has advanced. As he so sensibly said, this is not a matter which divides the House. All parties are agreed that there should be some raising of revenue from gambling, but we insist that it should be done in a sensible and practical way.
One of the most real and valid criticisms of Parliament is that so much legislation is either unintelligible to the ordinary person or wholly incomprehensible to the lawyer. But it is also a criticism of Parliament if we live in a 1090 cloud-cuckoo-land of not producing practicality and reality. With all respect to the very ingenious persons concerned, these provisions seem to have been thought up by people who do not understand the mechanics of racing. I know that the Financial Secretary—no better advocate can anybody have—will put before us all the arguments that should be advanced to try to support the Order, but I ask him to look very carefully at it. My hon. Friend the Member for the City of Chester (Mr. Temple) said that we are not going to divide the House because this is not really a matter of division. It is a matter of looking very carefully to ascertain whether these really are sensible provisions.
Regulation 34, in Part VI, which deals with the imposition by the executive upon the occupiers of tracks, says:The occupier of a track shall not admit to the track a person whom the occupier knows to be intending to carry on bookmaking on the track or permit a person to carry on book-making on the track unless that person has complied with the appropriate provisions of Regulation 16 of these Regulations.Has the person who drafted that ever been to my constituency on Derby Day? If he has not he should not have been in charge of drafting it. Does he realise that there are about 200 acres of downs crowded with about a quarter of a million people on Derby Day and that about 450 bookmakers will be on the downs that day? Is it really to be suggested that the occupier shall not admit to the track a person whom the occupier knows to be intending to carry on bookmaking by dodging in and out of a quarter of a million people to make sure, and shall have the imposition placed on him that he must ensure that they are bookmakers who have carried out the duties that are laid down with regard to the betting duty sheets? We have to provide what is practical. It is no use pushing out legislation or orders for other people to carry out when we have not done our job of seeing that they can be properly executed.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
Perhaps my right hon. and learned Friend would also look at Regulation 38, which states that the track occupier has to detach the duplicate and forward it to the collector not later than a week later.
§ Sir P. Rawlinson
I appreciate the impositions placed upon the occupier of the 200 acres of downs. He has somehow to set up suitable collection points. Has there been consultation with the conservators of the downs to see what appropriate premises are to be put there? Are tents to be scattered about at suitable points at which the 450-odd bookmakers can give in the various Government duty slips?
This is the sort of practical problem which faces the race track occupier in my constituency. He estimates that he will have to have about 25 extra men on the downs. As has been pointed out, they will not just be men who can issue badges. They will have to carry out complex clerical procedures laid down in the Order. They will have to deal with all types. They will have to pay attention to security, for large sums of money will be involved.
Let us consider the amount of money to be taken on the downs on Derby Day from bookmakers. Is there to be additional police supervision? Have those who drafted these Regulations found out whether the Home Secretary is able to provide the extra police required? Or is this just a scheme thought up by gentlemen of great ingenuity sitting in Whitehall without practical experience?
I am advised from Epsom that, over the four days, about £2 million will be involved—and all this work will have to be carried out—perhaps, unfortunately, in wet weather—in temporary accommodation which will have to be put up on each occasion. The cost estimated at Epsom is about £3,300 per annum extra to do a job which should be that of the Customs and Excise.
The situation of the much smaller course at Warwick has been brought to my attention. It is local authority owned and controlled. It is estimated that the extra cost will be about £2,000 a year. The course is already losing about £5,000 a year and is in the red by £20,000. This new imposition could mean the end of racing at a place like Warwick. Whatever we may think about gambling and betting—and we all think they should be a source of revenue—we know the importance of the bloodstock industry to our foreign exchange. As my hon. Friend the Member 1092 for City of Chester said, this could well mean the death blow to many race tracks. It seems that if the hon. Member is right, and I have no reason to doubt him because I know how expert he is about rigging, we may be introducing by this measure an extra degree of chance of rigging the odds. Why should people not ask hon. Members what they are doing sitting on their green benches at a fairly late hour. They will ask why we do not look at this matter sensibly and realistically. I join with the hon. Member for Midlothian (Mr. Eadie) in asking the Financial Secretary, who is an extremely reasonable man, if he will look at this again and see if a system can be devised which will not impose this impossible burden on racecourse authorities.
§ 10.46 p.m.
§ Mr. Timothy Kitson (Richmond, Yorks)
I should like to support my hon. Friend the Member for the City of Chester (Mr. Temple) who so ably put the case, and I find myself in full agreement with the hon. Member for Midlothian (Mr. Eadie). Unlike him I live within an hour of 11 race tracks and I plead guilty to have been on all of them on more than one occasion.
Along with a great number of people interested in the racing industry I feel that these Regulations are so cumbersome and so badly thought out that they will have a severe effect on the balance sheets of many racecourses which are going through difficult times and which have to deal with the Selective Employment Tax and the credit squeeze.
It is also true to say that the Customs and Excise officials have treated racecourse executives most unfairly by giving them so little time in which to make arrangements to collect this tax and to find the personnel to administer the tax and to provide the necessary security. The Racecourse Association had only one month's notice of the Regulations which was totally inadequate.
When we debated these matters earlier in the summer it became quite apparent that the Treasury Bench had little or no knowledge of the complicated structure and system of the betting industry. Indeed I remember that some of my hon. Friends had to explain the meaning of a Yankee, a patent, a round robin and a 1093 Canadian. I suspect that the Customs and Excise have even less knowledge of the industry.
My hon. and learned Friend the Member for Epsom (Sir Peter Rawlinson) has put the problem of Epsom Downs. As I understand it, Epsom Downs charge bookmakers for a badge to operate. It is, I believe, also true that as the man who gives out the badges goes down the line with the badges, the bookmakers disappear fairly quickly and seem to get reinstated later in the afternoon further down the line.
At the Knavesmire at York there is no administration of bookmakers, and I should like to ask the Financial Secretary what he intends to do. Major Petch, to whom I was talking last night and who runs the York racecourse, tells me that he has never controlled bookmakers on the Knavesmire and has no intention of trying to administer them in the future. He has no intention of selling betting duty sheets to the bookmakers. He feels that if the Customs and Excise believes that it can operate at the Knavesmire and will be in a position to sell betting sheets, it should do so not only on the racecourse at York, but at all other racecourses, too.
My hon. Friend the Member for the City of Chester referred to Regulation 18(2, c) which says:immediately after each event which takes place either at the meeting at which he is carrying on bookmaking or elsewhere during that meeting enter indelibly in the sheet the total amount of all the bets made with him at that meeting in respect of that event;I was at a race meeting a fortnight ago and I would like the Financial Secretary to explain what would happen in such a case as this.
After a race, a bookmaker would presumably add up all the bets, deducting the hedging bets, and write into his book what the position was after that event. In this case there was a photo finish. The photo was not satisfactory for the judge and so he called for another for clarification. As on most of these occasions, there was a considerable amount of betting on the photo. The result came and, to the surprise of some people, there was a stewards' inquiry, which was a lengthy procedure.
As the favourite was involved, there was a good deal of betting on the results of the objection. When the result of the 1094 objection was announced, the horses were leaving the paddock for the next event. How on earth can we agree to these Regulations when they will be impossible to administer? In those circumstances no bookmaker dealing with his business on a race track could meet these requirements. The conditions were such that after the result of the objection was announced, the bookmakers tried where they could to pay out after they had done the betting on the next race. It is a nonsense to agree to these regulations if they will be impossible to administer.
I now come to deal with the selling of betting duty sheets on the racecourse. I understand that the experience of most racecourse associations is that the sheets are sold overnight to the bookmakers and that it takes about four minutes to check a bookmaker's betting duty account and to sell him a sheet. For the bookmaker wishing to enter the £2 ring, the minimum credit or tax payable is £100. If his book shows a credit of £25 from his previous day's business, he wants not a £100 sheet but a £75 sheet. If on the previous day he had a big turnover and had a debit of £25, he would want a sheet for £125. But there is no such thing. There are two sheets one for £100 and one for £25, but he cannot buy the two together and for some extraordinary reason has to buy a sheet for £150. Perhaps the Financial Secretary can explain what all that is about.
It has been said that these Regulations will cost some of the smaller courses £500 to £1,000 a year and that the cost will be a great deal more at larger meetings. The figures, based on the first day at Doncaster this year when there was an experiment after the officials saw how this plan was proposed to be worked, showed that an additional staff of 12 would be required and that they would have to carry betting sheets at the meeting of up to £818,000 to meet the requirements of Doncaster race course for a four-day meeting. That does not start to take account of the additional security precautions which a race track would have to take.
There are many of us on this side of the House who wonder what all this is about. As my hon. Friend the Member for the City of Chester (Mr. Temple) has said, attendances have already shown signs of dropping. What is to happen to 1095 the S.P. market? The S.P. market can very easily be manipulated if only a small number of bookmakers are at the racecourse. This is a very serious state of affairs and already bookmakers are finding that hedging bets are a frightful nuisance to them. It has recently been said that if the blower gets about £250 to lay off, he probably has to approach as many as 10 bookmakers before he can hedge his bet.
§ Mr. Gordon A. T. Bagier (Sunderland, South)
Is the hon. Gentleman suggesting that the difficulties of the bookmakers are a result of the tax, or is he criticising the method of implementing it?
§ Mr. Kitson
It is the method of operating it, because this method is creating difficulties for the bookmaker and the dwindling number of bookmakers on racecourses makes many of us wonder what will happen to bookmakers on the racecourse. The Paymaster-General, who advises the Chancellor a good deal on betting, as I understand it, has let it be known on many occasions that he would like to see the bookmaker driven off the course. We all know that at times he has made noises about Tote monopolies. If this is the Government's intention, let them say so and not try to squeeze the bookmaker off the course and at the same time throw a very heavy expense upon the racecourse management, in having to collect a tax which it did not expect to collect at the time that the tax was announced.
§ 10.55 p.m.
§ Mr. Gordon A. T. Bagier (Sunderland, South)
I have found some of the remarks of the hon. Gentleman the Member for the City of Chester (Mr. Temple) very interesting. Part of the difficulty is that this is a new area of legislation and it is right that we should discuss the ins and outs and the difficulties involved. This is new legislation which has been talked about for many years but which has not, until recently, been enacted.
I do not think that there is any difference between both sides of the House on the desirability of having a tax on betting. The discussion that we are having is on the implementation of this legislation and the difficulties involved. The hon. Gentleman the Member for the City of Chester mentioned the high 1096 quality of staff required. I am not sure that this is necessary under the legislation. From an explanatory or an expertise point of view there are some difficulties, but I am certain that when matters are ironed out the distribution of the sheets and the dealing with them will not require the expertise that the hon. Gentleman seemed to suggest.
The hon. Gentleman dealt with the question of security and the amounts of cash which may have to be taken in at various places on the course. Cannot payments be made by cheque, must cash be used by bookmakers? Surely it is not beyond the bounds of possibility for the bookmaker to have an arrangement with the racecourse authorities, so that payment can be made by cheque, thereby eliminating the problem of large sums of money being handled.
The hon. Gentleman mentioned the problem of the bookmaker operating his book and the form that he has to fill in in inclement weather. Cannot the racecourse authorities provide some form of prefabricated building alongside the bookmaker's stand? This is not a huge problem. The collection of funds is not a new problem. Employers collect funds through P.A.Y.E. and I do not see why such a system cannot be used in this connection.
§ Mr. Eadie
Is my hon. Friend seeking to argue that there is no difference between the employer collecting P.A.Y.E. and the collection of funds at a racecourse? He will surely agree that the circumstances and environment on the racecourse are rather different from the cosy comfort of an employer operating P.A.Y.E. in an office?
§ Mr. Bagier
That may well be—the principle is exactly the same. The employers have, for the first time, been called on to collect taxation for the benefit of the Government concerned.
I see this as a question of degree. The smaller the track, the smaller the problem, the larger the track, the more bookmakers, the greater the problem. I took the trouble to make some inquiries at the weekend, and found that there is no trouble with greyhound racing. The small greyhound stadium or the provincial greyhound stadium has found no problem here at all. Bookmakers I talked 1097 to were quite happy with the procedure, and saw no problem at all.
I appreciate the problems mentioned by the hon. Member for Richmond, Yorks (Mr. Kitson) about the operating of racecourses and the problem connected with Epsom Downs, but he quotes Regulation 34:The occupier of a track shall not admit to the track…We have to make up our minds what is on track and what is off track in that definition, and I call on the Minister to deal with this point. He really has to designate, particularly in regard to the downs, whether it is off or on track because that brings about a different situation.
Regulation 34 goes on to refer to the person whom the occupier… knows to be intending to carry on bookmaking on the track…Like many other hon. Members, I am a novice in all this, but that could imply that the racecourse owner could allow bookmaking to take place on his track when he knows the person, but that otherwise it is taken care of by the Revenue people—
§ Mr. Kitson
Would the hon. Gentleman suggest that on a racecourse where 12 people are dealing with £800,000 in cash one could have just anyone handling it? That is rather odd. Secondly, does he appreciate that the Knavesmire, at York, is common ground, so that there is no charge for anyone going on it?
§ Mr. Bagier
That is my very point. I do not differ with the hon. Gentleman. This calls for definition to determine responsibility. As I understand it, the complaint of the hon. Gentleman and other hon. Members is that there is an unfair supervisory capacity put on the racecourses concerned. This may well be in the circumstances to which the hon. Gentleman referred. If so, the Minister should clear it up. I have only intervened to get those few points cleared up, and I look forward to the Minister's reply.
§ 11.4 p.m.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
The misconception that the hon. Member for Sunderland, South (Mr. Bagier) is under in relation to his argument 1098 is that in the normal case, where one is collecting a sum of money by way of a badge, as one does on the greyhound track, one pays a stated sum of money. That is what we on this side advocated at an earlier stage on this matter. If he would like an opportunity to see the betting duty ready reckoner for racecourse bookmakers, I have one here. It is a highly-complicated document. It would need a person of some intelligence to understand what he would have to pay. I certainly do not understand it, and I am prepared to wager at least a fiver with the hon. Member that he will not understand it, either.
I want to turn the argument to another aspect. It is perfectly plain that it is a gross impertinence on the part of the Government to have imposed these duties on racecourse executives. Furthermore, they have done it because they could not operate the tax as they thought originally—and we told them they would never be able to do so. It arises from the fact that they refused to listen to those on this side who have, collectively a great deal of wisdom in these matters—and who have told them time and time again—when they have absolutely none on their side, with the exception only of the Paymaster-General, who is, as always, absent on this occasion. We have not had the advantage of the help of the Liberal Party, which has not been present on these occasions, and we have not had a single piece of expertise by any member of the Labour Party in these debates. The Government Front Bench know nothing about the subject and care less. Those are the plain, honest facts of the situation.
The Home Office, whose duty it is to try to understand these matters, understands nothing about them at all, either collectively or individually, and has been unable to give any advice about them. The Customs and Excise have sought advice from certain bookmakers, whom I could name, but I will not do so for the sake of shame, and who are not the bookmakers they ought to have gone to for advice. The Customs and Excise have been badly advised both about the type of tax and about these Regulations.
The outcome is quite plain—and I repeat it so that if the Government do not understand it, at least the civil servants may, and they may then give 1099 advice. There is only one way in which we can deal with an on-the-course bookmakers' tax, and that is a straightforward payment of duty. Unfortunately, after the Bill became an Act the Government awakened and realised that what we had said from the beginning was true—but they had no mandate from the House to do it in these Regulations and, therefore, they produced the ready reckoner which insists that the unfortunate bookmaker shall pay in advance.
My first question is: what authority have the Government to ask a man to pay the tax before the tax is due? I should like an answer to that question. It may be in the Act and we may have overlooked it, but it is unusual to have to pay the whole of the tax, and indeed more than that—because the Association, in this "blurb" which it hands out, says, "You may always obtain a sheet of greater value than required but never one of less value". Therefore, he makes a pre-payment.
The only way in which this tax and these Regulations will operate is when the Government recognise that we must have a fixed amount for on the course—and on the course differs from off the course. In that case the bookmakers will operate it for the Government and will be happy to do so. For example, it could be £50 if they are on the rails, £25 in the main ring, £10 in the silver ring, and so on. It would vary according to the pitch, whether it was a better or a lesser pitch. They will work it out for the Government if they are given a chance, but they have never been given a chance.
These Regulations provide a highly complicated method based upon an assessment of 2½ per cent. of turnover, which was a fatuous suggestion from the start. That is the beginning of the trouble. Next, the bookmakers are up in arms because they have to make a pre-payment. What happened? I have been asked, and I will reply. When a bookmaker arrives at Ascot he has to go miles away from where he wants to be in order to find a little office, which has been set up in a shack a long way away to pay the tax. On the other hand, arriving at the White City, he can go into the ordinary stand. If he is a big bookmaker he pays £48 and goes 1100 into the main enclosure all within a minute. This is just as easy as if I or anyone else were to go in through the turnstiles and pay £2 to get into Ascot. In the same way, the bookmaker goes through his turnstile.
We have told the Government, but they will not listen to those who speak with the voice of experience in these matters. There could not be a better adviser in these matters than my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod). It is not only his personal experience; it is the wisdom and the experience that he is able to draw on throughout the country which makes him a good adviser. All those who have spoken from this side of the House understand different parts of the problem. My hon. Friend the Member for Richmond, Yorks (Mr. Kitson) speaks with a profound knowledge of these matters. My right hon. and learned Friend the Member for Epsom (Sir P. Rawlinson) is bound to know a thing or two about racing, or his Epsom constituents would have got rid of him a long time ago. The same goes for the nefarious bends to be found on the Chester Racecourse.
It is, therefore, advisable that the Government recognise that my hon. Friends and I are not trying to play the party game, but are honestly trying to persuade them to listen to the voice of experience. They will have to change the rules for the on-the-course tax and I trust that next year's Finance Bill will propose a change in the law.
When it comes to on the course betting, the Government have set up a paraphernalia in 34 regulations which is costing the punter a fortune. After all, in the end it is the punter who must pay. Hon. Members receive representations from the racecourse executives, and their case has been presented tonight. We also get representations from the bookmakers, and I have given their point of view on the pre-payment of the tax, although there are other points they would like put forward.
To me and my constituency—it is a great punting constituency and we like to have our bets, as do many others—our interest is nothing but pleasure, the pleasure of the ordinary working man and woman to have a bet. These people are "fed up" with this tax for two reasons. First, if one is on the course. 1101 one must pay the tax—at present, it means a deduction of 5 per cent. on one's winnings; it is stated to be 2½ per cent. on the betting, but deducted from one's winnings it represents 5 per cent.—on the course. Secondly, if one places one's bet on the course, but on the starting price, no tax at all is paid because the tax is not collected but carried; that is, the bookmaker carries the tax forward.
One must, therefore, assess whether to place one's bet—on, say, Dicky May, at Ascot last Saturday—either at 5 to 2 before or 6 to 2 at the off. One must make an assessment of whether or not it is better to carry the tax. In a situation in which a lot of money is bet at the starting price on the course, that will create a weak market, for the amount of money that is invested before the off creates a strong starting price. Consequently, if the Government go on with their present arrangements, they will find that we will not have an effective book-making system on the course; and such a system is the essence of bookmaking throughout the country. That is why it is vital for the Government to take note of the expert advice being given to them by my hon. Friends and to accept that a straight tax on the course is the only answer.
From the point of view of off-the-course betting, what is the purpose of having this enormous range of regulations and a large staff of Customs and Excise men having to be trained to understand the practices of bookmakers? None of it is necessary. The Government need merely say that every betting office throughout the country shall pay £1,500 a year, or whatever figure the Government decree, to be collected monthly. In that way the Government would get their money and the bookmakers would be left to shape the odds so that they can make a living.
Certain persons with vested interests, in this case bookmakers, tried to stop the Government doing what was the obvious thing to do in this matter. Naturally, one cannot ask London bookmakers with, say, 12 offices, to produce the whole of their accounts by next Tuesday. They would not do that, anyway, whatever is in the Regulations, and nobody would presume to think that they should do so. It therefore means in the end that the Government should say, "We want this amount of money. As long as that 1102 amount of money is produced, that is what we want, whether or not the Regulations are being carried out".
If this debate does nothing but remind the Government that they had better listen to the voice of experience and, as a result, make an amendment in April so that the Finance Bill takes account of that experience, we will have achieved something worthwhile.
§ 11.15 p.m.
§ The Financial Secretary to the Treasury (Mr. Niall MacDermot)
The hon. Member for Isle of Thanet (Mr. Rees-Davies) has spoken with more than his customary degree of modesty in this debate, but I do not think that we can say with a greater degree of inaccuracy than usual. Most of his remarks were designed to show that the duty we are trying to collect by these Regulations in his view is the wrong kind of betting duty. With great respect to him, that is not what we are discussing tonight. What we are discussing is the Regulations for collecting the kind of duty which the House decided in the Finance Bill we should collect.
I am grateful to hon. Members opposite for putting down this Prayer, because it gives me an opportunity to dispel some of the misapprehensions and delusions about the Regulations. The collection of this tax has got off to a very good start. Naturally, there have been a few teething troubles, but I think they have been much fewer than the critics foretold, and by any standard very few in number. As for the gloomy forecasts made that it would break down from the start, they have been completely falsified. The credit for this successful beginning should be shared.
First and foremost, it is due to the Commissioners of Customs and Excise who have worked out a simple and effective method of collection; secondly to their staff who have administered it and helped in its introduction by showing sympathy and patience in addition to their customary efficiency and zeal; thirdly, to the racecourse authorities who have co-operated in the setting up of the machinery for the supervision and collection in part of this duty which has required to the full their organisational skill; and, last, but not least, to the bookmakers who have co-operated fully over the introduction of the duty.
1103 One of their associations, the National Sporting League, was kind enough to write to the Customs thanking them for the co-operation and assistance which had been rendered by Customs officers in the early stages of the new duty. I am very happy to take this opportunity to return the compliment to the bookmakers. I think they realise that it is very much in their interest to make a success of this very reasonable betting duty. Whatever their motive may be, I certainly am grateful to them for their co-operation.
The hon. Member for Richmond, Yorks (Mr. Kitson) raised again the hare that these measures were in some way designed to kill the trade of the bookmaker in order to pave the way for a Tote monopoly. I denied that in the clearest possible terms during our debates on the Finance Bill and I do not think it necessary to add anything to what I said then. This is certainly not our intention and I think the bookmakers know that and understand that.
I turn, first, to the questions raised about the alleged difficulties for the racecourse authorities. The hon. Member for Richmond said that we gave them only one month's notice. That is not so. I can show him a lengthy memorandum, distributed on 30th June, setting out fully and in detail the measures now propounded in the Regulations. I had a meeting myself on 13th October with the chairman and secretary of the Turf Board at which they told me of their anxieties and apprehensions about the working of this tax and the obligations imposed on them under this scheme. They gave me the estimate which a number of hon. Members have given tonight of the time it would take to issue a betting duty sheet to a bookmaker as four minutes. I do not think that they or anyone else would adhere to that estimate now in the light of present experience. It takes nothing like that time, as any hon. Member who cares to go to see the issue of these sheets may see for himself.
The hon. Member for the City of Chester (Mr. Temple) said that what was required was a separate office for each ring. That may be so at some courses, but I can assure him that there are other courses where all the duty sheets are 1104 issued from one office. He quoted an estimate of £100 a day as the cost to the race track of issuing these sheets and collecting the money. That estimate was also given to me by General Fielden when he came to see me. I do not think that estimate would be adhered to now in the light of experience. I know of two courses near London where it turned out to be £30.
§ Mr. Temple
What I said was that the direct cost of collection was £30 and the cost in diminution of bookmakers' badge fees was £70, making a total of £100.
§ Mr. MacDermot
I do not think that either part of the estimate would be adhered to today. In practice, I think that they will find that it is cheaper than they had feared.
I am not suggesting that there is not trouble and expense put upon them, and it is right that I should correct my hon. Friend the Member for Sunderland, South (Mr. Bagier), because I recognise that it is necessary for them to recruit staff of a different kind from that which they normally have on the tracks, to supervise the collection and handling of these substantial sums of money. It is not all cash. Much of it is paid by cheque, but they still have a similar security problem.
Of course, the complaint that they bear the cost of collection is a familiar and almost traditional complaint whenever a duty is imposed. The collectors always resent the fact, as is the general practice, that the cost of collection should fall upon them. It is something which they are entitled to pass on in one way or another to their customers, as is done with other duties. But may I say publicly—and this is an assurance that I gave to General Fielden when he saw me—that we are anxious not to impose any unnecessary burden upon the racecourse authorities. We have agreed to study with them very carefully the working of this tax in the early months, and discussions are already going on now with a view, to seeking ways to alleviate their problems as far as we can without exposing the Revenue to risk. I do not think the House would wish me to say any more at this stage.
§ Mr. Kitson
I think that the Financial Secretary is mistaken about one thing. I wrote to him in the middle of June asking 1105 what was the position with regard to the Racecourse Association in administering this tax. The Financial Secretary sent me a memorandum at the end of June and, according to the Chairman of the Racecourse Association, he did not receive the Regulations till 25th August.
§ Mr. MacDermot
With great respect to him, I think that he is wrong. I think that we can show that it was sent on 30th June.
The right hon. and learned Member for Epsom (Sir P. Rawlinson) raised problems about Epsom Downs. These are not new problems. As he pointed out, there are bookmakers who operate on the downs who do not pay for a badge. We recognise that there are difficulties there. He asked whether the Regulations had been drafted by anybody who had been to Epsom. The answer is, "Yes". That is why they are drafted in the form they are, so as not to put an impossible task on the track occupier. He is directed merely not to admit to the track a person whom he knows to be intending to carry on the business of a bookmaker. These words do not apply to the gentleman who manages to escape the net.
Generally speaking, the answer to the question I was asked, is that the Racecourse Association has said that it will police the operation of this duty. This applies even in the situation at York which the hon. Member was asking me about. We would be surprised if Major Petch put up such a defiant attitude as the hon. Gentleman suggested he might. He is normally very polite, and I think that he will co-operate in the way in which we have been assured by the Racecourse Association it would wish to do and as the Association has done up to now.
I turn to the position of on-course bookmakers. I will not deal with the argument about the effect on the starting price, in view of the time. I am aware of the problem, but it is not a point which arises on these Regulations. This applies again to the form of the duty. I shall gladly discuss that with him at any time, and here, if it is in order.
We are concerned with how to levy the duty. There have been some complaints from the on-course bookmakers, 1106 which we are examining, one of which is that the system of control operates unfairly for them because there ate daily sheets instead of weekly sheets, as for off-course. This distinction arises from the fact that they are moving about from day to day, from course to course, whereas the betting shop man is static. We are examining the question to see whether it is possible to bring the two systems more closely into line, without weakening Revenue control. We have no desire to discriminate unfairly against them.
It was said that there are a number of difficulties about recording totals after the race. Normally this should not present any difficulty. Many bookmakers will have running totals in their field book, and any bookmakers who cannot quickly arrive at an accurate estimate of their total takings after a race will be soon out of business. An extreme example was given by the hon. Member for Richmond. We have made it clear to bookmakers that if the circumstances were such that they cannot put down a precise total they can put down an approximate total and correct it at the end of the day.
There have been some complaints about the levels of the minimum duty credits, but I think that this cannot have been understood by the bookmakers. There were some misunderstandings to start with. We propose to review those levels again in the light of experience, as was suggested by one hon. Member, and if it is necessary to have other denominations for betting sheets than those already in existence we shall gladly consider that.
The hon. Member for City of Chester asked why we have a Tuesday return. Under the original plans discussed with the bookmakers, we proposed to ask for a Monday return, but they said that that might cause some difficulty and asked for a Tuesday return. That is what they have, and we have not had a single complaint. There is no problem of collating the information in the way the hon. Member suggested, because the returns are made by betting shop and not by chain, so that the return is made direct. [Interruption.] They should be. If the hon. Gentleman likes to give me an example I shall gladly look into it. But that is the answer to his question.
1107 The suggestion that this could cause extra clerical work costing £3 a week is fantastic, because it is a simple matter of putting down on one sheet of paper each day totals which already must be available for other purposes of the business. It would take one clerk about three minutes to complete the form, and I assure the hon. Gentleman that that is all that is involved in the weekly return.
Our time is nearly up and I wish to say, in conclusion, that we are, as I have said, considering a number of points, and we are discussing them with the authorities concerned to see what, if any, adjustments we should make in the procedures. But the general shape of the Regulations is fully in accordance with the indications I gave during our debates on the Finance Bill. They are working extremely satisfactorily. No major defects in the system have been thrown up during the period they have been operating.
§ Mr. Eldon Griffiths (Bury St. Edmunds)
I trust that the hon. and learned Gentleman is not denying that there will be some reduction of the number of bookmakers coming to the course. In Newmarket, I am told, there will be a very substantial loss of revenue on this account.
§ Mr. MacDermot
I am not prepared to agree that in the present circumstances the reduction is due—or, if due, is due in more than small part—to the introduction of the duty. Many other factors have been operating recently. In the bookmakers' own journal, the Sporting Life, none other than Lord Harding was reported on 9th November as commenting to the effect that the reduction in the number of bookmakers on the tracks since the advent of the betting tax might well prove temporary.
§ Mr. Temple
The House is obliged to the Financial Secretary for his careful reply and his undertakings about discussions. Hon. Members on both sides of the House have issued severe warnings which, I hope, will have been heeded. In those circumstances, I beg to ask leave to withdraw the Motion.
§ Motion by leave, withdrawn.