§ Order for Second Reading read.
§ 8.45 p.m.
§ The Under-Secretary of State for the Home Department (Mr. Elystan Morgan)
I beg to move, That the Bill be now read a Second time.
The object of this short Bill which the Government are now recommending to the House is to prevent the threatened collapse of the statutory arrangements for the financial support of horseracing through the annual levy on bookmakers and the Totalisator Board. These arrangements, which were first introduced in the Betting Levy Act, 1961, and are now contained in Sections 24 to 31 of the Betting, Gaming and Lotteries Act, 1963, have provided a source of income on which the horseracing industry, in all its ramifications—owners, trainers, breeders, jockeys and apprentices—has become largely dependent, and which has also greatly benefited racegoers.
If the system were now to collapse it would be a most grievous blow to a sport to which thousands of people look for their livelihood and which is a source of great pleasure to many thousands more. It would be a blow which this sport would find the greatest difficulty in surviving.
The principle on which the present arrangements rest is a straightforward one. Our bookmakers depend preponderantly on horseracing for their business. It is very much to their benefit that the financial viability of the sport should be maintained, and it is, therefore, as much a matter of self-interest as of obligation that they should contribute to it. The bookmakers themselves recognise this. It is not the principle of the levy that is at issue; it is the assessment and the system by which contributions are to be settled and collected.
The Government have no direct responsibility. They have provided a statutory framework within which the levy is to be raised, after discussion between the horseracing interests and the bookmakers representatives and, where possible, with their mutual agreement, but that is all. The system has been conceived as a cooperative one, depending on the good will of all parties, and it is because this can 1215 no longer be relied upon that it is now threatened.
Briefly, the current arrangements are that proposals for the levy which is to operate in the coming year are first prepared by the Bookmakers' Committee—a representative body appointed by regulations made by my right hon. Friend the Home Secretary. These proposals are then submitted to the Horserace Betting Levy Board, of which the chairman and two members are independent persons, nominated by the Home Secretary in consultation with the Secretary of State for Scotland. The remaining membership consists of representatives of the turf authorities—two from the Jockey Club, one from the National Hunt Committee and the chairmen of the Totalisator Board and the Bookmakers' Committee.
If the Levy Board agrees with the Bookmakers' Committee's proposals the scheme is promulgated accordingly. If agreement cannot be reached the matter is referred to the chairman and independent members of the Board—that is, the three persons nominated by the Home Secretary—who may impose a scheme of their own. They are required, in doing this, to balance the needs of horseracing against the capacity of the bookmakers to pay, but having done that, their decision is absolute and there is no appeal against it.
The 1963 Act requires that in every scheme the bookmakers should be divided into categories for the purposes of contribution. When a scheme, whether agreed or imposed, has been promulgated, it is for the bookmaker to declare to the Board in which category he falls. The Board has no power to inspect his books to verify this. However, if the Board is dubious of a declaration, or none is made, it may refer the case to the Bookmakers' Committee, which is then required to examine it, and it may impose an assessment of its own.
The bookmaker is then liable accordingly unless he makes uses of the right available to him under Section 28 of the 1963 Act to appeal against the assessment to an impartial tribunal appointed under Section 29. The tribunal can alter an assessment, but it may not either reduce it or place the bookmaker in the 1216 exempt category, unless he gives to the Bookmakers' Committee all the facilities it requires for the investigation of the case. In other words, if the bookmaker is to hope to succeed in his appeal, he must, in practice, be prepared to submit his accounts.
Finally, on the failure of a bookmaker to pay his assessed contributions, the Levy Board has two remedies. It may proceed against him in the civil courts for recovery of the levy as a debt, or it may object before the betting licensing committee of the justices to the renewal of his bookmaker's permit on the grounds that he is not a fit and proper person to hold it. The justices are entitled, under Schedule 1 of the Betting, Gaming and Lotteries Act of 1963, to refuse a renewal on those grounds. Of course, whether they do so or not is entirely within their discretion.
The arrangements enshrined in the Statute are those which were originally agreed between all the parties. For the past six years, they have worked at least passably well: one could not put it much higher. During that time, about £17 million has been raised in levies from the bookmakers and the Totalisator Board and this sum has been spent on the improvement of horseracing and breeding and the development of veterinary science. It has, however, been the exception for levy schemes to be agreed between the Bookmakers' Committee and the full Levy Board.
The majority of these schemes have had to be imposed by the chairman and the other two independent members of the Board. The possibilities of disruption have always been present. This year, the conflict which has always been dormant has finally erupted, with the decision of Lord Wigg and his two independent colleagues on the Board to impose a scheme in which turnover has been substituted for profit as the chief basis of assessment and to promulgate in advance a scheme for next year which will perpetuate that system and will raise the total of contributions by the bookmakers from £2.3 million to £3.8 million, an increase of about 60 per cent.
These schemes have been designed to shift a large part of the burden from the smaller men whom Lord Wigg and his colleagues consider to have borne more 1217 than their fair share in the past, to the larger bookmaking concerns. By no means all the bookmakers have been opposed to these developments, but an influential and articulate section, including most of the large concerns, has claimed that a levy based upon turnover cannot take into account the bookmakers' capacity to pay, and is, therefore, in default of the statutory obligations, and that the amount of the levy proposed for next year is well beyond the reasonable ability of the trade to meet it.
The result of this controversy has been that of the 9,000 or so declarations due under this year's scheme no fewer than 3,500 were still outstanding at the end of 1968. These included those from many of the larger concerns, so that out of a total of some £2.3 million due to be collected by the end of October, last year, less than £1 million had been raised by that date. The Levy Board is now referring all these outstanding cases to the Bookmakers' Committee for scrutiny and the Government trust that the Committee will deal with them properly and expeditiously in accordance with its current statutory obligations.
A far more serious situation, however, threatens to develop next year, when the new and enhanced levy of £3.84 million will be due for collection. So opposed is the Bookmakers' Committee to this scheme that it has been suggested that if bookmakers fail to submit declarations and the cases are then referred by the Levy Board to the Bookmakers' Committee, the Committee will either refuse to deal with them, or will put all of them into the exempt category. As the House appreciates, this would be an open invitation to default and a deliberate obstruction to which, under the present law, there would in practice be no effective counter.
The Government have no wish to aggravate the situation and nor do they intend now to pronounce upon the question of whether the sum to be raised in the coming levy scheme is excessive. While the Bookmakers' Committee may genuinely believe that the methods which it is proposing to adopt are the only methods open to it to call attention to its grievances, such as they may be, one thing which is absolutely clear is that 1218 the Government cannot tolerate wrecking tactics of this kind. Neither can they allow the intentions of Parliament in passing the Betting Levy Act, 1961 to be frustrated through the refusal of the Bookmakers' Committee to perform what, after all, amounts to its statutory duty.
It is too readily forgotten that the betting levy was one feature of a new dispensation which included others of great benefit to the bookmakers, in particular, the right to establish betting offices. It it not surprising that experience should have revealed certain defects in the system, but they are not to be remedied by obstruction. The correct remedy is amending legislation, and this the Government now propose to apply.
It is always easy to be wise after the event, but it seems to the Government to be an evident flaw in the present arrangements that they leave disputed schemes to be decided by the chairman and independent members of the Board who are also responsible, with their colleagues on the Board, for expending the money which the levy brings in. However conscientious and however impartial the chairman and independent members may be in balancing the financial capacity of the bookmakers to pay against the needs of horseracing, they must in the circumstances be constantly exposed to the suspicion of bias in favour of horse racing interests.
This is a false and unfair position in which to put them. If confidence is to be restored, the responsibility for imposing schemes for raising money must be divorced from that of spending the money which has been raised. Justice also requires that, in the absence of agreement between the parties, a levy of this kind, which has many of the features of a tax, should not be imposed by people who cannot be made answerable for their decisions, except in the Press, and who have no other forum in which to defend them.
It therefore seems to be in the interests of all concerned that responsibility for determining disputed schemes should be transferred from the chairman and independent members of the Board to the Secretary of State, whose decisions may be questioned here in Parliament. That is what Clause 1 does.
§ Mr. Antony Buck (Colchester)
What are the hon. Gentleman's views on whether a scheme to be approved by the Home Secretary should be laid before Parliament as a Statutory Instrument, so that we can have a proper opportunity to consider it in detail?
§ Mr. Morgan
That goes rather beyond the present provisions of the Bill, but it is a matter that the hon. Gentleman can raise in Committee, if he is a member of the Standing Committee, and the Bill gets its Second Reading. I do not think that that is necessary, but there would be the opportunity from time to time to question the Secretary of State's decision.
§ Mr. John H. Osborn (Sheffield, Hallam)
Could the hon. Gentleman explain why the Home Secretary should have this responsibility. Is not it a departure that might set interesting precedents? I should like him to dwell on this before he proceeds.
§ Mr. Morgan
I shall deal with that, but I hope that what I have tried to say already in examining the weaknesses of the present system will have conveyed to the hon. Gentleman the reasons for transferring these powers to the Secretary of State. If it is the view of the House that the Secretary of State should lay Orders before the House annually to set out a scheme, it is rather surprising that such a suggestion has not been made during the seven or eight years that the present system has operated.
If the Home Secretary is to exercise this responsibility, it is only right that he be given a proper freedom with which to discharge it. Clause 1 empowers him, though it does not require him, to delegate an inquiry to an independent person or persons, though the final decision will remain his alone. In taking it, he is not expressly enjoined, as the chairman and independent members of the Board now are, to balance the financial capacity of the bookmakers against the needs of horseracing. From the very circumstances of his adjudication—a dispute between the Bookmakers' Committee on the one hand and the full Levy Board on the other—these are considerations that he will have to weigh.
§ Sir Eric Errington (Aldershot)
Can the hon. Gentleman explain how it has been worked out that the bookmakers 1220 can pay the much increased levy of £3 million? Many people with whom I have been in touch inform me that it is too heavy a load on the bookmaker.
§ Mr. Morgan
The hon. Gentleman must not assume that the levy will be £3 million. When I come to Clause 2 he will appreciate that this is a matter that will come before the Secretary of State for the exercise of his discretion. Therefore, there can at present be no question of talking about any fixed sum or any percentage of turnover.
The Secretary of State will have to weigh the considerations I have outlined, but they may not be the only ones. The transfer of this responsibility to a Minister of the Crown must enlarge the perspective of judgment as compared with that which was vested in the independent members of the Levy Board. The public interest may require certain other considerations, fiscal, social or economic, also to be taken into account.
This power of review will apply to the levy scheme, already promulgated by Lord Wigg and his colleagues for the coming year, which has been the immediate cause of the present dispute. Clause 1 requires the Secretary of State to confirm that scheme, with or without modifications. Before a decision is reached, the Bookmakers' Committee will be given every opportunity to state its objections either to the Secretary of State or to any person or body to whom under subsection (5) he chooses to delegate the conduct of inquiries on his behalf. But when a decision has been reached, whatever it may be, the Government intend that it shall be enforced without wrangling or obstruction. In short, Clause 1 provides the bookmakers with all the safeguards which they can reasonably expect and which are lacking in the present arrangements.
§ Clause 2 deals with the other side of the coin by preventing them from obstructing a scheme once decided upon. It does this by transferring from the Bookmakers' Committee to the chairman and independent members of the Levy Board the power to impose assessments in default of declarations by bookmakers and of revising assessments when declarations appear open to question.
§ Finally, it is necessary to strengthen—1221
§ Mr. John M. Temple (City of Chester)
The hon. Gentleman has gone through the Bill Clause by Clause. He has omitted a reference to Clause 5, which by repeal eliminates the vital safeguard for the bookmakers of reference to their capacity to pay. Will he say something about Clause 5?
§ Mr. Morgan
I have dealt with that already in explaining to the House the purpose of transferring this power from the independent members of the Board, who, after all, are not persons answerable to Parliament and who do not have this rostrum at which to explain their actions. It is only right that the Home Secretary should be given a much wider discretion. It is perfectly proper for him to take into account the ability of bookmakers to pay, to take into account the needs of the horseracing industry, and to take into account all manner of other considerations as well—the financial policies of the Government and wider social considerations.
I appreciate that in Committee, if the Bill is given a Second Reading, a classic battle will be fought on this question, but I am sure that the hon. Gentleman will accept at this stage that the expression which has been in statute since the Betting Levy Act, 1961, and which now appears in Section 27(5) of the 1963 Act, is one which may well be incapable of definition. It has never been tested. What does the term "capacity to pay" mean? It may mean next to nothing at all. On the other hand, can one imagine a term more capable of an infinite variety of interpretations than "the needs of the horseracing industry"?
It is necessary to strengthen the sanctions against non-payment of contributions, whether those be assessed on a bookmaker's own declaration, by the chairman and independent members of the Board in default of or in substitution for a declaration, or by a tribunal on appeal. The present sanctions are quite insufficient. I am sure that the House accepts that. Proceedings taken in the civil courts for recovery of debt can be expensive and protracted. Only in the exceptional case can a remedy of that kind by effectively used.
Refusal by a betting licensing committee to renew a bookmaker's permit on complaint of non-payment by the Board 1222 is a severe enough sanction, but, since it would close down a bookmaker's whole business for at least a year, it is, no doubt, on account of that very severity that justices are reluctant even to contemplate it except in the most extreme and aggravated cases.
So long as the decision is left entirely at the discretion of the justices, the weight of responsibility which it imposes on them is greater than they can reasonably be expected to bear. Clause 3, therefore, relieves them of the greater part of this burden by making it mandatory upon them to refuse a renewal on a second default in a period of five years if, but only if, the Levy Board appears by counsel or solicitor and actually makes such an objection.
I have so far been dealing only with the payments made to the levy by bookmakers since it is here that the dispute has arisen. The Totalisator Board also makes a substantial contribution. Indeed, that is the main object of its business. Section 30 of the 1963 Act provides that, in the absence of agreement between the Totalisator Board and the Levy Board over the amount of the contributions, the matter should be decided, as in the case of the bookmakers' contributions, by the chairman and two independent members of the Levy Board.
There have in the past been some differences of opinion between the two Boards about the extent to which the profits of the Tote should be ploughed back into the business or made over to the levy, but these have always, in the end, been satisfactorily resolved. It cannot, however, be assumed that this will always happen. Consistency requires that an unresolved dispute between the two Boards should in future be decided by the Secretary of State, and Clause 4 provides accordingly.
From the account which I have given of the provisions of the Bill, the House will, I hope, agree that it is a moderate and realistic Measure. Although it has been introduced as an emergency Measure against a background of dispute, the Government have no wish to inflame feelings any further by undertaking an inquest on the failure of the present arrangement. The Bill leaves the structure of the law essentially unchanged while reapportioning the responsibilities in such a way as to remove the worst sources of friction.
1223 The Measure attempts to be fair to all the parties in this dispute, while preserving in accordance with Parliament's intentions, the scheme for the self-financing of the racing industry, which has already brought great benefits to it and which could not now be effectively replaced. The House will, I am sure, in general welcome the objects of the Bill and agree with the remedies which it applies. It is, therefore, with confidence that I commend the Bill to the House.
§ 9.13 p.m.
§ Mr. John M. Temple (City of Chester)
I thank the Under-Secretary for the clear exposition that he has given of what is in the Bill. It is disappointing that we have had no mention of the sport of horseracing. I have taken a great interest in horseracing for a good part of my life and I am a tremendous admirer of the sport.
Being the first speaker from the Opposition, I wish to make it clear here and now that my hon. Friends and I have no wish to see the sport collapse. Quite the contrary. We want to see a thriving horse racing industry and all that goes with it, because we believe that British bloodstock is the finest in the world and that anything we can do to help the bloodstock industry should be done. We must, however, keep a spirit of fair play as between the bookmaking and punting fraternity and those on the other side who are the recipients of this levy.
This is the first time—although I have spoken on many occasions in debates on betting subjects—that I have spoken in a debate on a betting levy Measure. In fact, I never thought that there would be another such Measure because I knew that the one which we introduced eight years ago was working extraordinarily satisfactorily.
However, obviously something seems to have gone wrong. Whatever it may be—the Chairman of the Levy Board or whatever else—some spanner has dropped into the works, and it is this which I wish to examine tonight. Everybody in the bookmaking fraternity has agreed that there should be a substantial contribution from off-course betting towards the sport of horseracing. It was in that spirit that the first levy Measure was produced.
1224 The first levy scheme was an agreed procedure. I am not speaking for any sectional interest here tonight—I never have done and never will—but the book-making fraternity knew that there were certain safeguards built into that scheme and the one about which I interrupted the Under-Secretary was this recognition of their "capacity to pay". I do not think that the hon. Gentleman really explained very convincingly why this safeguard had been taken out. If it meant so little, as he said, why take it out? Nevertheless, significantly, it has been taken out.
§ Mr. Elystan Morgan
The point I sought to make—perhaps I did not articulate my views as clearly as I should—was that, whereas it was very relevant in relation to the Levy Board, particularly the independent members of the Board who have the right to decide under the present law, totally different considerations apply when that discretion is vested in the Secretary of State, who is answerable to this House.
§ Mr. Temple
I took the point the first time—in fact, I took it for the second time, and now this is the third time that the Under-Secretary has made that point; it did not require to be made a third time.
The fact remains that a general betting duty is the law of the land. The Under-Secretary said that a difficulty had arisen because a turnover tax was now being introduced into the levy rather than a tax on profits. The Benson Committee, chaired by Sir Henry Benson, an independent chairman, has recommended that the betting levy should be part of the general betting duty and, therefore, firmly tied to turnover. That recommendation is, I understand, acceptable to all sides of the racing community. As we all know, the whole basis of the general betting duty today is a turnover tax.
I cannot understand why in order to collect exactly the same type of levy we want two different organisations, the Treasury collecting on the one hand and the Levy Board collecting on the other. I thought that we had a Government moving into the technological age who could put together two schemes which mean exactly the same thing. But to devise some mechanism of this sort 1225 seems to be beyond the capability of this Government.
The difficulty about the Bill has really been a legal one. It was not surprising that the Under-Secretary introduced it in very legalistic terms. I thought too legalistic for a Bill concerned with horseracing. The fact is that the proposals of the Chairman of the Betting Levy Board, which I have no reason to suppose will be unacceptable to the House Secretary, are to double the levy on turnover for the next year. This doubling of taxes is getting an extraordinarily bad habit of the Government. The Chancellor comes in and doubles the general betting duty. I suppose that the Chairman of the Levy Board, to be a bit "me too-ish", comes along and says that he intends—[Interruption.]—to double the betting levy. This means a 65per cent. increase—[Interruption.]—this—
§ Mr. Temple
It was not worrying me in the least. This increase means a 65 per cent. increase in the amount of money to be collected by the Levy Board in one year. I thought that the norm was about 3 per cent. for increases. The figure of 65 per cent. takes a lot of explaining away, and the Under-Secretary must do a little better than he did on the cash side, not the legalistic side. What we are talking about is cash, which is coming mainly out of the pockets of the punters.
§ Mr. Marcus Lipton (Brixton)
Can the hon. Gentleman explain how he arrives at the figure of 65 per cent. increase? The proposal is that the charge on turnover should go up from 5s. per £100 to 10s. per £100.
§ Mr. Temple
That is doubling the turnover side. It will mean an increase in the levy from £2.5 million to £3.8 million, which is 65 per cent. Those are the exact figures which I am sure will be agreed by the Front Bench. I will pass over a copy of the Horserace Betting Levy Board's Seventh Report, prepared by none other than Lord Wigg himself, which will confirm this. So it must be correct, I would assume. This is not a Report prepared by the National Association of Bookmakers!
Bookmakers operate today, and always have operated, on a very narrow margin. 1226 I believe that the gross profit margin is about 2 per cent. of turnover from office betting and 1 per cent. from on-course betting. I will not go into the difference between course and office betting. I know that there are technicalities there. One-half per cent. is a substantial figure in relation to either 1 per cent. or 2 per cent. This vast increase in the betting levy may well reduce turnover and, therefore, the revenue which will accrue to the Government.
I have tried to justify the Measure, because I wish to justify it. However, I want to ask the Under-Secretary some questions. Is it entirely fair? He made a number of references to receipts from the Totalisator. From 1962–63 to 1967–68 receipts in respect of levy coming from the Tote have fallen from £900,000 to £600,000. Over the same period receipts from bookies have risen from £900,000 to over £2½ million; and it is proposed that they shall rise to £3.8 million, as I have said.
I remember the Peppiatt Committee being set up by Mr. R. A. Butler, as he then was. The basis of that scheme was a levy on profits. That scheme worked perfectly well. It is only when the change is being made from a profit to a turnover basis that the Bookmakers Committee has fallen out with the Chairman of the Levy Board.
I have spoken about betting duties on many occasions. I know more about betting duties, I think, than about the levy. There is no question but that a large revenue is being raised from betting duties. The combination of the increase in tax and the increase in the turnover duty is causing the turnover to decrease. I do not know whether the Under-Secretary knows the figures, but in October, 1968, gross turnover on horseracing was down by about 20 per cent. compared with October, 1967. I believe that the turnover in the country as a whole last year was down by about 10 per cent. on the year before. We must be very careful not to drive turnover down further; otherwise the Revenue itself will be affected by these proposals.
Is it necessary? I am not so sure that the increase of 65 per cent. is necessary. At least, I should like it to be explained to the House why in one year there should be such an extraordinary increase. 1227 I can understand that racing needs more over the years because I have read the Report of the Benson Committee. I am very ready to be convinced that it is necessary to increase the levy by 65 per cent., but I should like to know whether it is necessary at this moment of time for the good of racing.
I propose to be absolutely fair in the use of my statistics. One might think that the number of racehorse owners was declining, and also the number of colours registered—[Interruption.] Mr. Speaker, I am still getting this constant running commentary from the Treasury Bench. I wish the Ministers responsible would listen to my speech. I think that the Minister for Sport will learn something, because in a few minutes I shall say something favourable to him.
In 1931 the number of colours registered was 4,200. In 1959 it was 6,500. The number of colours registered under rules of racing in 1968 was 7,700. In 1962 there were 9,000 horses in training. In 1968 the number had risen to 11,000. No one can say that the number either of owners or of horses in training is falling away. It is against that background that we are being asked to increase the levy to this substantial extent.
Attendances are going down, and this is most disappointing. The reason, I believe, is to an extent that the number of bookmakers on the racecourse is not what it was. We on this side have many times advocated a differential between on-course and off-course betting. That would be a real shot in the arm to racing. Attendances have been going down over the last seven years.
I wonder whether this increase in the levy—of about £1½ million in a year—is desirable. It will come out of bookmakers' profits. I hope that they will be able to pay it out of their profits. There is doubt whether they will. Had that amount of gross profit been returned as such for taxation purposes, a considerable tax bill would have accrued. I believe that the Inland Revenue is giving away, albeit inadvertently, about half the total sum, or something like £¾ million in revenue, which otherwise would have been collected for the good of the country.
I am not always one of those who talk of protecting the Revenue, but I would 1228 say to the Minister of Sport that there is a case for a general betting levy which should be devoted to sport of all kinds. If there is a levy on horseracing, there may well be a case for a levy on greyhound racing or other kinds of betting levy.
I should like to see a general betting levy allocated as between horseracing and all other sports, including the Olympic teams and everything else. That is a sensible suggestion. I am surprised that when the Government have grasped the nettle of introducing the Bill they have not looked a little further and dealt with what I regard as the extremely desirable aspect of the advantages of giving the revenues from a general betting duty to a much wider circle of deserving interests in the sporting world.
I should like to comment on the legal side of the new proposals. I am rather surprised that the final arbiter of all these problems is to be the Home Secretary. I should not have thought that it was a job he particularly wanted. It is not insignificant that the Home Secretary appoints the Chairman of the Horserace Betting Levy Board. Thus, the Chairman must be someone whom the Home Secretary gets on with, approves of and likes.
When the Chairman of the Levy Board promulgates a scheme, he obviously takes it to his pal, the Home Secretary. The Home Secretary is put in an uncommonly awkward position if he turns down his good friend the Chairman of the Board and says, "I do not think much of your scheme." The Chairman of the Board might well say, "We were pals before we entered into these conversations." The Home Secretary might certainly be put in an extraordinarily embarrassing position.
I seriously suggest that the proposal of my hon. Friend the Member for Colchester (Mr. Buck) is a good one. If the Home Secretary feels that he must back one scheme as against another or give a determination, he should bring it to the House to be able to justify himself in public and before the House on the basis of the scheme which he has accepted, approved and, therefore, considered to be desirable. There is no question that the Home Secretary's responsibility needs a good deal of examination. I would just as soon have this 1229 matter taken over by a Treasury Minister. The Home Secretary will have to assure everybody that he is handing out fair treatment, having regard to all the circumstances, to the punters, the bookmakers and, of course, the racing community.
To conclude, I believe—and this is suported by the Benson Committee—that the levy and the duty should be one. I was always clear about this from the first time that the Peppiatt Committee reported. When we were discussing the general betting legislation years ago which brought in the betting shops, it was obvious to me that there would be a general betting duty. That followed as night follows day.
I hope that equity will be done, and will be seen to be done, to the various parties concerned. I end as I started by paying tribute to the British bloodstock industry. I am delighted that British bloodstock prices are high and that our bloodstock is being appreciated throughout the world. If this levy goes towards the improvement of the bloodstock industry, it is worth while. But let us be fair in doing the right thing.
§ 9.30 p.m.
§ Mr. Robert Sheldon (Ashton-under-Lyne)
I find myself in the difficulty of not knowing a great deal about the background of the horseracing industry and yet, at the same time, failing to understand why the House should be involved in what would appear to be private arrangements between those people who earn their living from bookmaking and those who spend part of their living in enjoying the sport of horseracing. This is a purely personal matter between two sections of the community. It is fair enough that some people might be very interested in horseracing and others might be less interested, but I do not see why we should be legislating in a matter of this kind.
I am not of the opinion that horseracing is a pernicious or bad sport. I think that the Government should take a neutral view of horseracing, as they do of many other sports—tiddley-winks, bridge, or whatever it may be. The Government neither assist nor tax; they are neutral. They say that people should enjoy themselves as they wish in the time available 1230 to them. The Government should not become involved in these matters.
This is a private arrangement which, apparently, does not seem to be working very well. The Government took a previous line in this matter. I think that they were wrong. They should have adopted a neutral position. If the Government involve themselves in assisting one section of the community to pay £4 million to another section when there is a tax on the first section of the community, it must be asked why the money is not coming to the Exchequer. If the argument is put forward, as it has been put forward tonight, that this is to make the sport viable, this is not an interest which I have very much at heart. If I see any other form of sport declining about which I believe the Treasury should take a neutral view, it is not something which particularly distresses me, and it should not particularly distress the House.
On the other hand, if we say that the Government cannot be neutral about a matter from which it raises revenue, I would question that, because there are areas in which the Government do not try to assist. They do not help in the consumption of tobacco and alcohol, and if the consumption of them were to decline the House would not try to restore their consumption. A similar principle is involved here. If the bookmakers' interests were to decline as a result of the decline of horseracing, that would be a matter for them. If they are not in a position to see that their own interests lie in the promotion of horseracing, it is not up to us to say that we understand their best interests better than they do.
Many voluntary agreements are made. I do not see why the Home Secretary should put himself in the position of having to arbitrate in this way. This is a principle on which, I think, it would be very wrong to set out, and I would be very happy indeed if we were to proceed no further with it.
§ 9.35 p.m.
§ Mr. James Dance (Bromsgrove)
I am grateful to have an opportunity to speak briefly in support of the Bill. It is a good Bill. It is doing the right thing. The whole purpose is set out in the Explanatory Memorandum. It is for… the purpose of benefiting horse racing, horse breeding and veterinary science.1231 There is a lot of misunderstanding at present about where this money will go. It has been put about that it is going to rich racehorse owners. This is complete nonsense. In today's Daily Mail there is an extremely good article which puts this clearly, and I would read a little of it:The industry must have a bigger levy if it is to remain a straight, high-class sport for the public to bet on and if it is to produce horses fit to hold their own in international competition.This is important, because we export a lot of our bloodstock throughout the world and it is extremely valuable for our export trade.
The article goes on to say:Some bookmakers claim the levy is designed merely to put money into the pockets of rich owners, but this is an unworthy red herring. In any business, the workers cannot be adequately paid unless the money comes in through the top.The writer gives some rather interesting figures:Last week the racehorse owners issued figures showing that the plan for an additional £487,000 prize money would yield only £10,583 to the owners. More than £97,400 would go in statutory deductions for trainers, jockeys and stable staff, £300,000 to meet an increase of £1 a week in training fees and £79,017 to meet the increase of £3 a ride in jockeys' fees.I know that some people consider that some flat-race jockeys receive very good rewards, but they should see the plight of the unfortunate National Hunt jockeys at the moment. They are getting no rides; they do not get the big retainers which the flat-race jockeys get; and they must be going through a very difficult time. I know that it is the intention to put some of this money coming through this increased levy towards helping them.
However, it does not end there. One has only to pick up a paper any day of the week to see the constant demand for better conditions for racegoers at racecourses. I am no longer a director of a racecourse, though I have been one, but I know that improving those conditions costs a very large sum of money. That money has got to come from somewhere and it is certainly not coming through attendances at racecourses at present. We must have much more realistic wages for stable lads and the people who take tickets as the racegoers go through the gates, and the card 1232 sellers, and so on. These are all people who will benefit out of the money. It is not going just to the rather limited number of very rich racehorse owners.
One has only to go to National Hunt racing these days to realise—I am sure hon. Members will agree with me—that the people who run racehorses today are not very rich. Most of them are farmers, some of whom, under licence, actually train horses themselves. These are the people who support this very dicey form of racing. It is dicey because of the uncertain weather, and it is not only frost which can cancel a meeting; it may be fog; and if it is not fog then, as we have seen in recent days, it is very heavy rain, which makes the going impossible.
I would quote a few figures which I have been given, which I believe to be accurate, and which my hon. Friend the Member for the City of Chester (Mr. Temple) will be interested to hear. When the Levy Board was set up it was estimated, I gather, that it would receive about £8 million. In fact, it has been receiving under £4 million. These figures, of course, represent contributions not only from the bookmakers, but from the Tote as well, it was considered that this contribution of £8 million to racing would make it a viable sport.
In Britain, there are four times as many betting shops as there are in France. There are no bookmakers in France or, if there are, they are underground. The Pari-Mutuel runs betting shops there, and there are 16,000 in this country compared with 4,000 in France. The betting turnover in this country is three times that of France, namely, £11 million as against £4,300,000. Those figures are startling in that the result is that our racing industry receives from betting only one-sixth of that received by France, namely £3 million to £4 million against £18 million. It is interesting that, although we have a higher betting turnover than France, the Chancellor in taxation in France receives £60 million whereas it is hoped to raise in this country £50 million. The money is required to go back into the racing industry for breeding and also to make racing more popular.
Since the 1963 Act racecourse attendances have gone down. There are three types of bookmaker. There is the on-course bookmaker against whom none of 1233 of us have a grouse. He pays a fair whack to enter the various enclosures and for his staff. There is the off-course bookmaker, who has largely a credit account and whose business is mostly done by telephone. Finally, there is the betting shop.
If I remember correctly, the betting shop was introduced because the police did not want to licence runners, and we in this House wanted to legalise the half-crown bet by the small man. It was decided that the best way to do this was not to license the runner, but to license the premises. This system has grown much more than was thought likely when the Bill was passed. The result has been that attendances at racecourses have gone down and the money is not available to pay good salaries to the numerous people employed.
I commend the Bill. I think it is right. I am no enemy of the bookmaker; I like him. Our racecourses today would be less colourful if the bookmaker were not there. Racing is his livelihood—he could not make a living without it—and I think it is right that he should contribute towards that sport, the sport which we love so much.
§ 9.44 p.m.
§ Mr. Arthur Lewis (West Ham, North)
I agree 100 per cent. with the speech of my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), and, like him, I have no interest to declare. I am not connected either directly or indirectly with horseracing, the betting fraternity or public relations firms.
It is a disgrace for this Labour Government to bring in such a Bill. The title is the Horserace Betting Levy Bill. With respect to you, Mr. Speaker, it ought to be called the Wigg Tax-free Subsidies to the Poor Millionaire Race-house Owners Bill. I want to show that that is what it is.
I do not understand the reason for all the crocodile tears which are being shed for the poor people who go racing. They do not have to go. The poor bookmakers do not have to go into their profession if they do not want to. In fact, it is the poor punters who pay.
I want also to explain presently—[Interruption.] I wish that my hon. Friend 1234 who calls himself "Minister for Sport" would not keep up this constant stream of barracking, about which Mr. Speaker has had to tell him already—
§ Mr. Howell
With respect, I was not making any interjection about the hon. Gentleman's comments. I was conferring with my hon. Friend about the nature of his opening speech and the reply that should be made to the debate.
§ Mr. Lewis
Very well, Mr. Speaker. But if my hon. Friend wants to comment, I hope that he will rise to his feet to do so.
I cannot see the urgency for this Measure. I cannot see why it has been dragged in in this manner. Earlier today we discussed the Pensions (Increase) Bill. Evidently this Bill has equal priority. But what about the old age pensioners? Are they not entitled to some priority? We are told every day of the week that we cannot bring in this or that progressive Measure because there is not sufficient time—
§ Mr. Speaker
Order. In debating the Second Reading of this Bill, we cannot discuss other Bills that the hon. Gentleman would like to introduce.
§ Mr. Lewis
Yes, Mr. Speaker, but we can discuss whether there is a need for the present Bill and whether it should be brought in in preference to others which should have more priority.
There is no need for this Second Reading because there is no urgency for it, and there are other Bills which are more important. This is a Bill which is brought in to assist one section of the population, and other Bills which could be brought 1235 in to assist the population as a whole are left out to make way for it.
The hon. Member for Bromsgrove (Mr. Dance) said that the Bill is not designed to benefit racehorse owners. I suppose it is intended for the poor working man who owns and controls racehorses. In reality, what it does is to increase drastically the tax-free subsidies to racehorse owners, and I want to say a word in a moment about the hon. Gentleman's statement that it does not mean much in extra subsidies for them.
§ Mr. Dance
Does not the hon. Gentleman realise that there are various rings on a racecourse? There is a cheap ring, a more expensive one, then Tattersall's and, finally, the members' ring. What I am in favour of is trying to ensure that conditions in the Silver Ring are made more comfortable and convenient for the very people to whom the hon. Gentleman refers.
§ Mr. Lewis
I will deal with that in a moment. It is true that some part of previous levies has gone for this purpose. But the fact remains that a big percentage has gone to the racehorse owners, and an even bigger percentage will go to them if this Measure becomes law.
What is the urgency for the Bill? I apologise to my hon. Friend the Under-Secretary of State for the Home Department for not being here to listen to his opening remarks. I am told that there is an altercation going on between the bookmakers and Lord Wigg about the legal rights and wrongs of the existing legislation. I should have thought that the people to decide the rights and wrongs in a legal argument were to be found in our courts. Let the parties go to court to decide who is right and who is wrong. I cannot see why we should waste our time arguing about bringing in a new Measure to give them extra simply because of some dubiety about the legal interpretation of existing legislation.
I never heard the Under-Secretary say who was really asking for this Measure. I apologise if he did mention it. Have the dock workers, whom I represent, asked for it? Has the Trades Union Congress asked for it? Has the Labour Party 1236 asked for it? Have all those workers who go round knocking on the doors to get the voters out to get my hon. Friends and myself back in Parliament asked for it? Frankly, none of my dock workers, working-class supporters, trade unionists or Labour people has been urging me to get this Bill on the Floor of the House.
Was it discussed with the other members of the Horserace Betting Levy Board? Were they contacted and drawn into discussions? Were there negotiations with all interested parties, as is the custom with Bills of this kind? I do not know. I have heard nothing to suggest that this was done.
We have heard a lot about strikes recently. We have heard about the Post Office workers and the dockers going on strike unless they get extra money. Do I understand that the racehorse owners are threatening to go on strike unless they get extra money? If the racehorse owners have threatened to go on strike, when did they do it? Have they refused to run their horses? Are they so poor and penniless and in such dire trouble that they have to shut down all these big racing establishments? I have heard nothing to suggest this.
Are we to take it that these poor breeders and trainers are suffering so much from hardship that they have threatened to pack up? I have heard no such suggestion. I read in the Press last week, or it may have been this week, that one poor trainer had died and left £¼ million. That is not bad.
Will any of the workers in the horse-racing business get any of these tax-free moneys which are to be given to the racehorse owners?
§ Mr. Dance rose—
§ Mr. Timothy Kitson (Richmond, Yorks) rose—
§ Mr. Lewis
I cannot give way to two hon. Gentlemen. Will the hon. Member for Bromsgrove tell me of any worker in the business, other than the racehorse owner, who will get tax-free moneys? I have the figure here. Money has been 1237 spent on improving amenities and facilities, but the workers in the business have to pay their tax.
I come to the point that not all these people are getting huge prizes and tax-free moneys. I have a paper here. These are not my dockers or trade union workers. I have the names, and I can quote them. These are near enough all millionaires, or people in the millionaire class. They are certainly all Surtax payers. I will list the tax-free prize moneys that they have received. One man received £97,075 and another £18,270. The other prize moneys range between those two figures. I will not give the whole list. However, 25 of the top owners have had 31 per cent. of all prize moneys between them. This is all tax-free money which has gone to Surtax payers. I got one of my hon. Friends who is an accountant, or has some connection with accountancy, to work out how much a man paying Surtax will get if, in addition to his other income, he gets a State subsidy of £97,000 tax-free in one year. This is what is happening.
§ Mr. Lewis
I agree; nevertheless it is a lot of sponduliks, as the hon. Gentleman would say.
I was saying that this money is to be given to these people. It is, in fact, a game. I agree with the hon. Member for the City of Chester (Mr. Temple) that it is the taxpayer who is paying. Do not let us kid ourselves. I am not defending the bookmakers.
§ Mr. Lewis
I was going on to explain—as my hon. Friend did—that no one has to go in for this, whether he be a bookmaker or a National Hunt supporter or any other type of person. He goes in for it, I assume, because he loves the sport. All right, if he loves the sport let him pay for it. Many of my constituents love to go to football matches. They follow West Ham—one of the best teams—and they pay for it. [Interruption.] I thought that I should cause some barracking when I said that. I admit that there are some other teams which are not too bad. But the football supporters are paying for their sport, as are the cricket supporters, or the supporters of any other type of sport. They do not ask the Government to subsidise the sport.
I would not object to a tax on all forms of betting, gambling and gaming. It might be applied to all forms of sport. That might be a good thing, because there is a need to develop sport. I do not see why horseracing, just because some of us like it, should take precedence over greyhound racing, football, cricket or any other sport. If the poor man who runs his horses at National Hunt meetings cannot make both ends meet, there is no law that compels him to carry on.
Lord Wigg has said that he wants to double the allocation of prize money to £1,600 million. I do not see why the prize money should be doubled. Surely £97,000 for running a horse is sufficient, and surely 31 per cent. of the whole of the levy for the top 25 prizewinners is sufficient. I do not see why the people in the industry—whether it be my noble Friend Lord Wigg, or any other person connected with the sport—should share out the money derived from within the sport.
For my sins, I spend money on smokes. I thereby contribute my share of tax. If I have a drink I contribute to the tax on drink. Those people who produce the drinks and the cigarettes and tobacco cannot go to the Chancellor and say, "We are contributing so many hundreds of millions of pounds a year; we want to tell you how that money should be spent." 1239 ''No tear", the Chancellor would say, "I shall decide how the tax comes in. I shall decide what I tax. Having got the money in, I shall distribute it to the schools, health services and the various other forms of social welfare."
We may or may not agree with the Chancellor's methods of collecting the tax but we surely agree that taxation is right, and that it should be distributed as it is now. That is what I suggest in this case. If there is to be a levy, let it be on all forms of betting, gambling and gaming, and on all sports, and then let the Chancellor—not Lord Wigg and his Board, or even the Home Secretary—decide how the money should be distributed.
§ Mr. Kitson
The hon. Member spoke about his football team, West Ham. Would he not recognise that those who participate in the football pools make a very substantial contribution to football? Is this not similar to the contribution of the bookmakers?
§ It being Ten o'clock, the debate stood adjourned.
That the proceedings on the Horserace Betting Levy Bill may be entered upon and proceeded with at this day's sitting, at any hour, though opposed.—[Dr. Miller.]
Question again proposed, That the Bill be now read a Second time.
§ Mr. Lewis
I thank the hon. Member because he has made my point. Yes, a dock worker in my constituency may have his 6d. or 1s. on the pools. He puts on what he likes and no one makes him. He knows that there is a percentage, perhaps 33⅓ per cent., taken out, but the Chancellor does not then say, "You have contributed this amount and I would now like to ask you what I am going to do with it and whether you want to give it to West Ham or Southampton." No, he distributes that money to the various social welfare activities—
§ Mr. Kitson rose—
§ Mr. Lewis
Mr. Speaker is giving me black looks. I cannot keep giving way, 1240 but the hon. Member has made the point, that these people cannot say whether the money should or should not be ploughed back into the sport which they follow.
The hon. Member for the City of Chester proudly and rightly said how wonderful the bloodstock of the industry is. There is an argument here. It can be maintained that this industry earns us foreign currency in export and that we should therefore encourage it. I should like the Minister to tell us what is the balance of payments on the import and export of horses, and the loss or profit. Perhaps we are on the right side, but if this is a good argument, the same could be said of the gaming casinos, which I do not want to encourage—that they earn us hard currency from American visitors and others. Are we then to have a Bill to raise a levy to give money to the casino people? I hope not.
The Bill should not be hastened through the House. There are many objections to it which I hope, if the opportunity presents itself to get on the Committee, to make the subject of Amendments. We should not worry too much about helping racehorse owners. I agree that those who work in the industry should be helped, but they have trade unions to do that. If they have not, let them organise themselves into trade unions. There have recently been some improvements in the hours, wages and working conditions of the jockeys, stable lads, and so on.
I am all for helping them, but not for giving hundreds of thousands of pounds per year tax-free to wealthy racehorse owners, all of whom are well able to look after themselves and live well. All the big houses and estates at Newmarket rarely go on the market, because they are so expensive. But the racehorse owners live there and do well. I could not care less about the bookmakers. I believe that the bookmakers are in favour of the principle of the Bill. I am opposed to the whole concept.
§ Mr. Hamling
I hope that when we reach the Amendments which my hon. Friend intends to suggest in Committee we shall recall what he has just said.
§ Mr. Lewis
I do not know whether that was an innuendo. At this stage I have no Amendments which I want to 1241 suggest, and in any case Amendments cannot be put forward until the Bill has had a Second Reading. All I am suggesting is that if something is to be taken from the punters and it is the punters who pay, I should like there to be a punters association putting forward punters' Amendments. Perhaps my hon. Friend the Member for Woolwich, West (Mr. Hamling), and I can set up an association to look after the interest of punters, because they are the people who ought to be consulted and who have not been consulted.
§ 10.6 p.m.
§ Mr. Timothy Kitson (Richmond, Yorks)
I had not intended to speak in the debate, but I have been incited to do so by the hon. Member for West Ham, North (Mr. Arthur Lewis). He said that no contribution made in any other sport helped that particular sport. I said that the football pools punter made a large contribution to football. The hon. Gentleman said that that money was taken by the Chancellor of the Exchequer, and he then avoided the question. I was making the point that one-third of the money put into the football pools is taken by the Chancellor and a third is put into the operation and part of the money put into the operation is handed back to football. If the hon. Member denies that that is the case, his information is incorrect.
It is all very well to talk about one racehorse owner who had a horse which last year won £97,000. I cannot imagine what was the cost to him of all the other horses which he had in training. The hon. Member for West Ham, North should go racing at Sedgefield and add up the contributions put into a day's racing by the owners and see what a race is worth to an owner at the end of the day. A winner might get £120, but 10 per cent. of that goes to the trainer, 10 per cent. to the jockey and probably 5 per cent. to the stableyard, which leaves the owner with about £70 out of that £120. It should also be borne in mind that only one horse in seven in training wins a race and that includes the six races at Sedgefield at £120 to the winner. It is nonsense to put every owner into the £97,000 category.
I agree that it may be wrong to boost those who are at the top of the sport, but there are many small men in racing. 1242 If the hon. Member for West Ham, North rode the Grand National winner—admittedly we would have to alter the weights—I would be delighted to see that he got an additional prize to his 10 per cent., but the jockeys who go round the racecourses do not make a large living. If the hon. Member talks to the trainers in Middleham, he will find that they are not making a great killing in racing, are not making enormous profits, and anybody associated with training knows that to be so. People who work in the racing yards do a tremendously hard day's work for a very small return and any increase in the contribution made to racing by the Levy Board will help them.
Anybody who goes abroad on holiday is allowed to take only £50, but the Government allow us to have horses in training in France, if we are fortunate enough to be able to do so. To win a selling plate in France is worth £1,000, not £200, even at a small meeting. Nobody going on holiday is allowed to take more than £50 out of the country, but we are allowed to keep three horses in training in France, and the Chancellor of the Exchequer does not object. If an owner is wise enough to do that, and wins a selling plate in Paris or any other part of France, the minimum prize money is probably about £1,000, but if he wins one on a small racecourse in this country he probably receives about £200 or £300.
It is all right for the hon. Member for West Ham, North to produce a few figures about someone in the racing industry who makes £97,000 because he owns the winner of the Derby and the Ascot Gold Cup, but let us remember all those small people who own horses and give the punter a great deal of pleasure—
§ Mr. Kitson
There is no question of tears in this. What I am saying is that such owners are not making the enormous profits that the hon. Gentleman suggested. Bearing in mind that the Tote is paying its contribution on turnover, is not it fair to ask the bookmaker to do the same?
§ Mr. Arthur Lewis
My hon. Friend facetiously said that the hon. Gentleman 1243 is making him cry. What I was trying to get over was that the poor racehorse owners, if there are any, do not have to go on if they keep losing money. I was trying to say to him that a worker on £15 to £18 a week has to go to work to live. He must carry on. He cannot say that he wants to contract out, because it is his living. But the racehorse owners do not have to carry on. They can pack up whenever they want.
§ Mr. Kitson
I am suggesting that it is sensible for the Levy Board to lift the stake money to make it comparable with that in France and other countries. The English owner is justified in sending a horse to France for training, but if our stake money were made comparable to that in France, as the Levy Board want, owners might be encouraged to keep their horses in this country.
§ 10.13 p.m.
§ Mr. Marcus Lipton (Brixton)
On balance, I find it very possible to support the Bill. A certain amount of irrelevant argument and bucketfuls of sentiment have been introduced into the discussion, but the issue is very simple. In effect, the Bill tries to move the burden of the levy from the small bookmaker to the big man.
Hon. Members who have been following the history of the betting levy will recall that in the seventh levy, covering the period from April, 1968, to March, 1969, the minimum charge was lowered from £90 to £50. About 2,500 bookmakers benefited from that concession. In addition, when the Board decided to raise the figure at which a levy became payable, it was raised from £2,000 to £3,000 on net profits. As a result of the lifting of the ceiling to that extent, about 6,000 bookmakers do not pay the charge at all in respect of profits. In the sixth levy, the Board reduced the total sum it hoped to collect from £2.6 million to £2.3 million. It seems to me, therefore, the charge on the small bookmaker having been reduced, that it is necessary and inevitable that someone has to pay more if the total amount is to be collected. It is this which has caused the larger bookmakers bitterly to attack the levy scheme.
My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) drew 1244 attention to the substantial sums of prize money earned by a small percentage of racehorse owners. He did not, for whatever reason I know not, mention the profits earned by the large bookmaking firms. I propose to remedy that omission, bearing in mind that the very people whose figures of profit I am about to give are the principal opponents of the Bill. The large bookmakers claim that they are being viciously victimised and deprived of a large portion of their profits. All we can do to test the veracity of that claim is to look at their published accounts.
In spite of a hazardous year, J. Coral Ltd. reported an increased profit for the year ended 30th June, 1968, of £46,000 over the previous year; the dividend was maintained at 75 per cent., and a 1: 5 scrip issue was proposed. In 1967 the William Hill organisation showed a profit before tax of £179,000—far exceeding the money collected in prize money by a handful of racehorse owners.
§ Mr. Sheldon
Will not my hon. Friend accept that the profits he is now mentioning provide a perfect case for an increase in betting duties to go to the Chancellor of the Exchequer rather than to racehorse owners?
§ Mr. Lipton
Not necessarily. My hon. Friend is an ardent worshipper of the Chancellor of the Exchequer and he wants to give him more work to do and more money to play with. I am content to leave the question of the horserace betting levy to the Home Secretary. One of the objects of the Bill is to make a Minister—in this case the Home Secretary—more accountable to the House than hitherto for the operation of the scheme. I can see no objection in principle or in logic to the proposition that a Minister—we can argue about whether it should be the Chancellor or the Home Secretary—should be made more responsible than is the case now for the operation of the betting levy.
Let me give one or two more figures coming from the William Hill organisation. I said just now that its profits before tax in 1967 were £179,000. In 1968 profits before tax were £402,000. I need give no more now than some figures coming from the Ladbroke group. The group's gross profits for 1968 were 1245 £693,000 more than in the previous year—£1.8 million as opposed to £1.1 million.
Those figures for not indicate that in transferring the burden of the levy from the small bookmaker to the larger bookmaker we are imposing any real hardship or injustice.
The hon. Member for Bromsgrove (Mr. Dance) spoke of the growth of betting shops and the betting business. I was never in favour of betting shops, and I think it a great pity that the street bookmaker was eliminated. He rendered a public service at a much smaller cost to the community than the elaborate system which we are now seeking to operate.
§ Mr. Lipton
Reference has been made to an apparent flaw in the 1963 Act, and it appears that the bookmakers are claiming that the Levy Board is ultra vires in certain actions which it is taking. My hon. Friend the Member for West Ham, North wondered why the Government or the Levy Board did not take the bookmakers to court.
§ Mr. Arthur Lewis
I did not say anything of the sort. I said that they, whoever may be responsible, should settle the matter in court. In other words, I said that if legal action were needed to settle the matter, it should be settled that way.
§ Mr. Lipton
I do not see how a legal matter could be settled other than in court. If it must be settled that way, then why do not some of the wealthy bookmakers to whom I have referred take the necessary action against the Levy Board? If they believe that the Board is acting outside the powers which the House has vested in it, why do not they settle it by that means?
The eighth levy scheme will cover the period April, 1969, to March, 1970. The Bill proposes to increase the charge on turnover from 5s. to 10s. per £100. I do not understand how the hon. Member for the City of Chester (Mr. Temple), who I regret is not in his place, can argue that this represents a 65 per cent. increase. By comparing the estimated yield of £3.8 million with the estimated yield for the previous year of £2.3 million, one arrives at a hypothetical increase of 65 per cent. However, the Levy Board is here making 1246 a concession to the bookmakers because it is increasing the figure before which the charge becomes payable on profits from £3,000 to £4,000. By this means we are helping the small man.
There will, therefore, be an increase in the total yield from bookmakers to give an estimated yield of £3.8 million, and the row boils down to the fact that under the eighth levy scheme about £1.2 million extra will be extracted from the largest bookmakers out of their turnover of £800 million. That, believe it or not, means that they are being asked to pay the extra very small amount of 0.15 per cent. How can the big bookmakers, whose profit figures I have quoted, object to an increase of this size?
The levy scheme was introduced on the suggestion and with the approval of the bookmakers. It would never have been introduced if it had not received their unanimous approval. Now they have changed their tune and object to the principle which the Government propose of shifting the burden from the small bookmakers, thousands of whom are not affected by the operation of the levy as proposed in the Bill, to the larger bookmakers, who will be asked to pay a little more out of their substantial profits. A case has not been made out against the Bill and I hope that the House will therefore approve its Second Reading.
§ 10.25 p.m.
§ Mr. Fergus Montgomery (Brierley Hill)
Most of my hon. Friends will find it surprising that I am speaking in support of bookmakers, because I like to have a bet, but I very rarely win. Bookmakers are like politicians, a friendless community; very rarely do they find anyone springing to their defence. In all fairness I must say that I am not happy about this legislation.
In 1961 Parliament passed the Betting Levy Act which decreed that the amount of levy should be related to the bookmaker's capacity to pay. The Act also included a safeguard in the form of the Bookmakers' Committee. According to the Bill, this is now being withdrawn because, as it says in the Explanatory Memorandum:Clause 1 of the Bill transfers the responsibility for settling the annual levy scheme, in default of an agreement between the Levy Board and the Bookmakers' Committee to the Secretary of State.1247 I cannot help comparing that with the wisdom of Lord Butler, who was Home Secretary at the time of the Betting Levy Act. In the Second Reading debate on 5th December, 1960, he said that he did not want the Home Secretary interfering too much. He wanted to ensure that the Board should settle its own affairs. He said:I believe that this is a sensible device for achieving that end. If there is disagreement about the amount of the levy or the means of collecting it, it does not seem to me that the Home Secretary is well qualified to resolve that …"—[OFFICIAL REPORT, 5th December, 1960; Vol. 631, c. 879.]I cannot understand why the Home Secretary is trying to take this upon himself.
This levy is fixed by the bookmaker's turnover, and the hon. Member for Brixton (Mr. Lipton) pointed out that this amounts to 10s. per £100 of turnover. No account is taken of the bookmaker's capacity to pay. I disagree with the hon. Member. It is not the big bookmakers who are complaining. It is the small bookmakers, and it is the small bookmakers in my constituency who are incensed about this. These are the people about whom I am concerned. The bookmaker must pay a fixed levy on turnover and he must also pay 6 per cent. of his profits. Yet he is not allowed to deduct the levy from his profit before tax. [Interruption.] That is what I was told by the bookmakers who came to see me.
§ Mr. Montgomery
The hon. Member for Woolwich, West (Mr. Hamling) says "Ah." It is left to the House to decide what that means. For some bookmakers this levy can make all the difference between making a profit or a loss. It could put some bookmakers, particularly the small ones, out of business.
§ Mr. Hamling indicated dissent.
§ Mr. Montgomery
The hon. Member for Woolwich, West shakes his head, but I am told that there are dangers that bookmakers will be driven out of business, and I will elaborate this later.
If bookmakers are to have an extra levy placed upon them it is certainly true that most of this will be passed on to the punter. This point was made by 1248 the hon. Member for West Ham, North (Mr. Arthur Lewis). It is always the punters who seem to pay, and this has dangers.
Lord Wigg made a speech about this in a debate on the Finance Bill on 2nd June, 1964. I do not always agree with Lord Wigg. In a debate on 5th December, 1960, he referred to my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) as "a Gladstonian Liberal." My right hon. Friend represents a constituency adjoining mine, and I am a great admirer of his. I doubt very much whether I should be if I thought he was Gladstonian Liberal. I do not really owe Lord Wigg anything because he owns racehorses—
§ Mr. Montgomery
I was going to say that Lord Wigg has cost me money over a horse called Gout, which, I think, is very aptly named.
On 2nd June, 1964, Lord Wigg paid a tribute to my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) who, he said, had performed… an act of great political courage …when he introduced the present betting legislation. He said:When it came up in the last Parliament, I did not believe that any Government would tackle it. But the right hon. Gentleman did, and it has been a very important step forward, and I pay my tribute to his courage in getting rid of not all but 95 per cent. of illegal betting."—[OFFICIAL REPORT, 2nd June, 1964; Vol. 695 c. 1013.]Now the Chancellor proposes that we go back to square one. He is recreating illegal betting. It is illegal betting that will put the small bookmaker out of business.
§ Mr. Hamling indicated dissent.
§ Mr. Montgomery
It is no good the hon. Member for Woolwich, West shaking his head. If bookmakers have to increase the deductions that they are making from the bets of punters this will result in the law of diminishing returns and a vast increase in illegal betting. People are tired of paying tax on their bets. They will be tempted to use street corner bookies again, who do 1249 not have to pay tax on their winnings. If the hon. Gentleman were to go into any betting shop he would hear the punter moaning that he cannot win: if he backs a loser, he loses his money; if he happens to back a winner, part of his winnings are deducted in tax. If he can find a street corner bookie who will pay him his winnings in full, he is likely to use that man, and the man in the small betting shop will be put out of business.
I do not know whether I am being unduly cynical in wondering whether there is something more sinister behind the Bill. I wonder whether the aim is to obliterate the bookmaker and have a Tote monopoly, which would be a retrograde step. With bookmakers, there is at least a chance of getting better odds prior to a race. I speak with no axe to grind, because if ever I place a bet on a horse and accept the price of, say, 5 to 1, it is odds on that as soon as I have put my money on the horse it goes out in the betting. It is as though there were some secret system of saying, "Montgomery has put his money on. This horse has not got a chance" before the 1250 race even starts. [Interruption.] Yes, like Gout, which was never even in the first three.
I hope that the Government will reconsider the Bill, because I should like to see racing made as attractive as possible. I do not agree with some of the arguments which were advanced by the hon. Member for West Ham, North. It is important that better prizes should be offered in Britain. It is rather tough that British animals are going over to France, as my hon. Friend the Member for Richmond, Yorks (Mr. Kitson) pointed out, where the prizes are so much more attractive. Those who are interested in horseracing in Britain want to see the best possible animals racing here and want us to make horseracing a sport which will give great pleasure to many people. I should like to see the levy fairly administered. I hope that the Government will have second thoughts, that regard will be paid to bookmakers' ability to pay the levy, and that bookmakers will be allowed to retain the safeguards which were so carefully written into the 1961 Act.
§ 10.32 p.m.
§ Mr. William Hamling (Woolwich, West)
The hon. Member for Brierley Hill (Mr. Montgomery) said that he is a friend of the bookmaker. I do not know which bookmakers in his constituency he has spoken to. The only bookmaker in my constituency to whom I have spoken is a small bookie, and he supports the Bill. The only people who have mounted a lobby against the Bill have been the organised bookmakers led by the big ones. It is not the punters who have lobbied us against the Bill. My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) mentioned his constituents. I wonder how many of his punters have lobbied him against the Bill. The only letters I have received on the subject have been from the bookmakers' lobby against the Bill. My post has been full of letters in the last week from these people.
I am surprised that the hon. Gentleman did not notice what my hon. Friend the Under-Secretary said about the effects of the eighth levy on the small bookmaker. My hon. Friend gave the facts, which have not been controverted in the debate. I shall not weary the House by repeating the figures my hon. Friend gave. They can be read in HANSARD.
The street bookie lays his bets off with another bookmaker, who pays the tax. Therefore, indirectly the punter pays the tax. Let us not kid ourselves about betting. The punter pays. He bets knowing that he will pay but hoping to win.
§ Mr. Hamling
That is the purpose of the exercise. Some hon. Members do not know much about the facts of life for the ordinary punter and the ordinary constituent whom they represent.
What I am concerned with, however, is that it is the small bookmaker who should be kept in business. It is the small bookmaker with whom my constituents bet. They do not bet with the big boys, with Ladbrokes. They bet with Lewis, of Woolwich. [An. HON. MEMBER: "Arthur Lewis?"] No connection with the old firm from West Ham. Lewis of Woolwich is a well-known bookmaker 1252 whose father was in business 40 years ago. He is the small bookmaker whom the levy will assist.
The people who have been putting the small bookmakers out of business in recent years have not been the Levy Board. The people who have been buying the betting shops and putting the small bookie out of business, the people who have been forcing their rules upon the small bookie, have not been the Betting Levy Board. The people who have been cutting the odds for places have not been the Levy Board. It is the big bookies, meeting in conclave at New-market behind closed doors, making their own rules. They are the people who are ruining the small bookmaker, and they are the people who are hitting the small punter.
Let us have no hypocrisy from some of the bookmakers' interests behind the opposition to the Bill. The fact is that without horse racing, betting could not go on. Do we want to encourage off-course betting or on-course betting? Surely, the purpose of the Bill is to increase the attractiveness of on-course betting. That is healthier all round. It is healthier also for the Chancellor of the Exchequer, for whom my hon. Friend has so much unnatural affection.
The Bill has been brought in because the bookmakers failed to agree on a scheme. That is the simple answer. They wanted to sabotage the Betting Levy Board because they wanted to rule this industry. The big bookies want to rule this industry. They are not making £80,000 a year, oh no. They are making vast fortunes. Cecil and John Moores are not making £80,000 a year and contending that they have much affection for the small punter—only because he is a mug. That is the only affection they have for the little punter. So let us not waste many tears over people like that.
This industry also—and this should commend itself to my hon. Friend—provides a great deal of revenue for the Exchequer. It is, therefore, in the interest of the Exchequer and of the country that it should be healthy. That, again, is one of the purposes behind the Bill. No doubt, my hon. Friends heard the broadcast last Saturday about the recent November bloodstock sales at Newmarket which indicated that a great deal of 1253 money was coming to this country from the export of bloodstock. Without the horseracing industry, that valuable export is threatened, as it has been for years, but the Bill will help this important export industry.
I do not know whether that is a view which commends itself to some of my hon. Friends who seem to have some inverted puritanism about horseracing. They seem to take a rather shame-faced attitude towards this industry, which employs a great many people and gives a great deal of satifaction to thousands—millions—of people. What is wrong in that? I never go to a race meeting, but I take a great deal of personal interest in other industries which, perhaps, do not have an altogether high moral tone. I think of drinking a glass of beer. That may be a harmless amusement.
§ Mr. Sheldon
I will not quibble about words. I hope my hon. Friend was not referring to me, because I said quite clearly that the Government ought to be neutral in this matter, as they ought to be neutral on the question—my hon. Friend referred to drinking—whether people drink or do not drink. But nobody is saying that certain people should receive money for drinking, and I believe the Government should not be suggesting that they should not be neutral in this matter, and not hand money over from one section of the community to another section.
§ Mr. Hamling
I have already dealt with my hon. Friend's point about the neutrality of the Government in this matter. How can the Government be neutral about an industry which brings into the Exchequer many millions of pounds a year? How can we be neutral about an industry which employs thousands of people?
§ Mr. Arthur Lewis
Will my hon. Friend allow me? I must declare an interest: there is a greyhound track in 1254 my constituency. But there is a great number of greyhound tracks, and tracks which are getting into difficulty. Neither Lord Wigg nor anybody else has suggested they should get some of this money. If it is right and proper for one, why not for the other?
§ Mr. Hamling
Yes. I hope my hon. Friend, with his interest in these matters, will promote a Private Member's Bill to promote them.
§ Mr. Hamling
Why should the Government do something he disapproves of? Why the Government should do what he is now suggesting I do not know.
§ Mr. Hamling
My hon. Friend thinks we should treat everybody alike. Obviously, this House takes a great interest in all forms of taxation, in which this House ought to take a great deal of interest, and we ought to do our best to see that the goose which lays the golden eggs is not killed, as, indeed, it would be killed if this Bill were not carried and if the Betting Levy Board disappeared. These are points of importance to the nation. Obviously, without the revenue which we get from these amusements, harmless, no doubt, we could not assist the old-age pensioners in whom my hon. Friend affects so much interest.
§ Mr. Hamling
Let him read what he said in his speech. He said these are things we ought to be concerned about and that without the money from the tax on this industry we would not be able to afford a great many of these things.
§ Mr. Hamling
The fact is, and the House knows it very well and the country knows it very well, that attendances at race meetings are declining, and they have been declining for a long time. A great many race meetings have ceased, and will cease.
§ Mr. Hamling
A good thing, says my hon. Friend. All right. In that case he ought to carry placards saying "Down with racing", "Close Newmarket", "Close the lot".
§ Mr. Walden
When I said it was a good thing that certain race meetings had declined I did not mean I was hostile in any way to racing, but I think it is a very good thing that its structure should be rationalised, and that the Levy Board should not pay money out to uneconomic courses, but to courses which have some chance of giving a return on the money which is paid out.
§ Mr. Hamling
All I can say to my hon. Friend is that I hope that in that case he will vote for this Bill, which will give the Betting Levy Board more power than it now has. That is the answer to that one.
§ Mr. Hamling
No doubt we shall see. No doubt we shall see when the Committee stage is reached.
This industry is declining because revenue from racecourses is declining, attendances are going down. The Betting Levy Board, under the able chairmanship of my noble friend—I do not see why we should not say that—is taking great steps to increase interest in racing and taking great steps to improve attendances and so increase receipts.
One of the most important things is to increase prize money. Whatever some may say about wealthy racehorse owners, prize money at race meetings in this country compared with abroad has for some years been declining. One has only to look at the number of runners in some important races to know that it is not worth while sending horses. The purpose of the Levy Board's operation is to reverse that trend and to make it more worth while. [An HON. MEMBER: "To have more race meetings."] To have more race meetings, yes, and to improve the racecourse facilities. This exactly is the policy of the Levy Board, but unless the Bill is passed the Board will not be able to carry out that policy.
§ Mr. Richard Buchanan (Glasgow, Springburn)
I do not know very much about the Bill, but, as is my habit when 1256 a Bill comes out, I have made a cursory examination of it to see whether it interests me. One fact I came across is that there are more racecourses in Britain than in the United States of America. To talk in terms of more race meetings might mean that the levy would be wasted on subsidising tracks not now in existence.
§ Mr. Hamling
That may be so; it may be that there are certain uneconomic racecourses. I hope that my hon. Friend will now take a little more interest in the operation of the Betting Levy Board. If he were to study the facts, he would know that the Board has been trying to rationalise this process and will continue to do so, and that the purpose of the Bill is to help the Board to do precisely that.
May I add to what I said at the beginning about bookmakers? Small bookmakers have for some time been going out of business, as it is not profitable for them to continue. I quoted the case of one of my constituents. He is closing one of his betting shops in Erith and Belvedere because it is not economic. It is uneconomic under the rules that have been made not by himself but by the big bookmakers, who are driving people like him out of business. The bookies' rules are dictated by the arbitrary decisions of the big bookies, and I hope at some stage, Mr. Speaker, we may be able to discuss the Bock-makers' Afternoon Greyhound Services Ltd., which is an unofficial organisation set up by the big bookies to make the rules for the small bookies and to put them out of business.
I hope that the House will take a realistic and factual view of the Bill and carry it overwhelmingly.
§ 10.48 p.m.
§ Mrs. Jill Knight (Birmingham, Edgbaston)
I have never run a racecourse; I have never had any particular knowledge of the bloodstock industry; I have no bookmaking interests, and I am a pretty poor punter; any bookmaker who relied on me for his daily bread would soon be drawing National Assistance; but I have received many letters from bookmakers in my constituency. I have been to see them and I have listened to their case. It makes no difference to me whether a constituent 1257 of mine is a bookmaker or a bootmaker; if he feels that some unfairness is bearing upon him as a result of legislation from this House, then it is up to me to intervene on his behalf.
I was impressed with one extraordinary result of the argument of the hon. Member for Woolwich, West (Mr. Hamling). Having hammered away at the bookmakers, poured scorn on the large firms of bookmakers and totally destroyed their characters, he thundered, in a way which no doubt at one time had his charges trembling in their desks, "It is the punters who pay." If it is the punters who pay, is he saying that the bookmakers, whose character he formerly blackened, are so altruistic that they are making all this effort to have their case put although they are not hurt by the Bill because the punters pay? I was so impressed by the case that bookmakers made to me that I feel that they have an argument which should be put forward. The hon. Member for Brixton (Mr. Lipton) is wrong in thinking that only the big bookmakers are worried about the Bill. Many small ones have written to me.
It is most important to make it clear that the bookmakers have never opposed the principle of a levy. The Minister made a brief reference to that fact, but another hon. Member said later that it was no part of this Parliament's job to tell the bookmakers that this was something that they should do. There is no need to tell them. They have never opposed the idea of a levy. In 1956 they co-operated with the Jockey Club on a committee to discuss the financial structure of racing. Two years later, off their own bat, they started the Racecourse Amenities Fund to provide financial assistance, on a voluntary basis, from off-course bookmakers. They co-operated with the Home Office in the introduction of the 1960 Betting, Gaming and Lotteries Act. They also sent a representative to the Peppiatt Committee, which later paid tribute to the fact that the bookmakers had never been against the principle of a levy.
My hon. Friend the Member for Brierley Hill (Mr. Montgomery) quoted from the speech by the Home Secretary on 5th December, 1960. In the same speech, the right hon. Gentleman made it clear that the bookmakers agree with the 1258 principle. But what they have always said is that their agreement was conditional on adequate safeguards for bookmakers, and that seems to be perfectly fair.
There is no doubt that if a system is created without adequate safeguards the result will be to force thousands of bookmakers out of existence, and one of my hon. Friends referred to the illegal betting that might result from that. But those hon. Members who think that it is not the case that bookmakers would be forced out of business by this legislation need only look for a moment at the contributions which bookmakers have made since 1962–3, when the system began.
In 1962–3, the amount from the bookmakers was £892,617. From that figure, it shot up to over £2½ million in 1967–8. That is a very big jump—
§ Mr. Hamling
Will the hon. Lady now quote the figure that an individual bookmaker paid under the seventh levy and how much he will have to pay under the eighth levy?
§ Mrs. Knight
If the hon. Gentleman is attempting to suggest by that that the bookmakers have had no objection to the seventh levy, he is wrong. He should do his homework rather better before suggesting that.
From £2½ million, we are told that in April of this year the amount will be increased to £3,800,000. At one stage, the Minister threw some doubt on that figure. When pressed, he said that it has not been said that that figure will be imposed. I do not know from where he imagines the various authorities who have quoted the figure got it, but I have a cutting from the Birmingham Post of 12th December of last year which says:This year, from April, 1969, bookmakers' contributions will be raised to £3,800,000.The Birmingham Post did not make up that figure. There must be a reason why it stated that figure. I noticed that the Minister did not say that it would not be raised to that figure.
§ Mr. Elystan Morgan
I think that it would be of assistance to the House if we were to clear up this matter. A scheme has been proposed by the Levy 1259 Board; but if the Bill is passed, under Clause 1(4),A scheme determined by members of the Levy Board for the levy period beginning with 1st April 1969 shall not have effect unless confirmed by the Secretary of State, who may in confirming it direct that it shall have effect with such modifications as he may specify.I ask the House to remember that it should not take for granted that the Home Secretary either will or will not confirm the scheme about which we have heard.
§ Mrs. Knight
I have no doubt that members of the bookmaking fraternity and the whole of the racing industry will be very interested to read what the Minister has just said. Nevertheless, I am sure that he will not quarrel with me when I say that there is widespread well-founded belief in the industry that that is the figure. At all events, what started off as a fair contribution has gradually become an intolerable burden.
In one of the less lucid passages in the speech of the hon. Member for Woolwich, West I fancy I heard a reference to a golden goose. I think that wise Chancellors realise that it is better to let a goose live and collect the golden eggs than kill it off and face empty egg-cups, particularly when the eggs are worth about £2 million to £3 million. This could well be the result. If we tax too heavily we may kill the golden goose.
Over and above the point about how much levy should be extracted is the burning question of the arrangements made to fix that sum. Is it not fair that the bookmakers should have the right to adequate safeguards? I do not think that Parliament would ever have agreed to authorise a levy or set up a Levy Board if it had thought there were to be no adequate safeguards for the bookmakers as a result.
Ability to pay has, until now, been the yardstick. The Minister said: "Who can say what is ability to pay? It is a loose term." So it is, but a loose term is better than no term at all. If we have it clear that ability to pay is recognised, that is one thing. But to wipe that out altogether and not even pay lip-service to the fact that, to be fair, we must recognise ability to pay and consider it, is going a bit far.
1260 The Bill deletes the provision which established this principle. With effect from 1st April, 1970, Section 27(5) of the Betting, Gaming and Lotteries Act, 1963, is repealed. With the repeal of this section will disappear the only real safeguard that bookmakers have so far against excessive demands.
§ Mrs. Knight
There is no question about it. This is what they believe, and I cannot see that they are not correct. It appears that the Government, by destroying this principle, are not only telegraphing their intention that more money still should be extracted but indicating that they care not a jot whether ability to pay is there or not.
If the levy is so much and the bookmakers cannot pay, what happens? They default in payment, they lose their permits and go out of business. They do that in just over three months. If they have defaulted for a period of more than three months previously they are out of business in no time at all. I am worried about that.
I am also worried about the suggestion that it is right to base tax on turnover, not on profits. That is rather a worrying theory.
The Explanatory Memorandum twice mentions the right of appeal. It states:The Bookmaker has a right of appeal against his assessment to an appeal tribunal established by the Act.A little lower down in the Explanatory Memorandum, on Clause 2, it says:The existing right of appeal remains unaffected.It does not seem to have cheered the bookmakers that this is in the Explanatory Memorandum. I am not surprised at that, because there is only one occasion in the whole of the Bill where the word "appeal" is mentioned, and that is in Clause 2, where it says that certain parts of the Bill, dealing with the appeals tribunalshall not have effect in relation to the levy period beginning with 1st April".It is probably on that basis that the bookmakers who have read the Bill are concerned.
I have listened to what they have said, and I understand their concern. I am not speaking for the large groups of bookmakers but merely making the point to 1261 the hon. Gentleman that there is genuine concern, and at the moment we honestly do not know—having listened to the various interpretations of the Bill—whether it is the wolf or the grandmother.
§ Mr. Elystan Morgan
It might save misunderstanding if I point out that Clause 29(1) of the Betting, Gaming and Lotteries. Act, 1963—which spells out the right of appeal—is not affected by the Bill.
§ Mrs. Knight
I was aware that the Bill must be read in conjunction with the other Act, but I put it to the Minister that the worries that I have been voicing to him are genuine and are felt by men who are concerned about their livelihoods. It may be that they are wrongly concerned and that everything will be fair and that we have the grandmother and not the wolf, but I hope that the hon. Gentleman will take care to make it clear to these worried men which of the two it is.
§ 11.2 p.m.
§ Mr. Brian Walden (Birmingham, All Saints)
On Monday I spoke to a number of bookmakers and also certain representatives of the industry, and said then that I was speaking on request, in the hope that I should not have to speak in this debate. I have heard this debate from upstairs and I have not wanted to intervene, for reasons that I shall explain, but have now found myself in the unfortunate position of having to do so.
I did not want to intervene for a number of reasons, principally because throughout the 1964–66 Parliament I was the P.P.S. at the Treasury. As time goes on it becomes increasingly difficult to remember what one is supposed to remember for public discussion and what one is supposed not to remember. A P.P.S. is not privileged in respect of Government secrets, but, necessarily, he gets to hear things and has old friends and does not want to offend them. I have had a very careful think about the Measure, and nothing that I say is in any way a breach of confidentiality.
As briefly as possible, and without any technicalities, I want to say some things which I hope will be examined in detail in the Committee—of which I hope to be a member.
§ Mr. Walden
That remains to be seen. First of all, nobody should attack the Betting Levy Board for its general aims, purposes and operations; they are excellent. I do not want to go into all the social and economic changes that necessarily meant—after the Second World War—that the nature of the ownership of racehorses and the attendance at race courses were bound to change also, after the initial post-war boom. That criticism was made by the present Chairman of the Betting Levy Board. He suggested, as others have, a number of reforms, which have now been carried out by the Board.
In an interjection in the speech of my hon. Friend the Member for Woolwich, West (Mr. Hamling)—who is not now present—I said that there should be fewer race meetings. I said this not in any spirit hostile to the sport of horse-racing but because of my belief that Britain still has too many racecourses and that some are uneconomic and should be closed, and that the benefits should go elsewhere.
I must not say too much, but I have no reason to suppose that the Levy Board—and certainly Her Majesty's Government and the Minister of Sport, whom I am glad to see sitting there—would necessarily want to contradict me on this point.
So I am a strong supporter of the Levy Board—let that be clear. However, I am uneasy about this Bill, first of all because I am not sure that it is viable financially. In a Second Reading debate I do not want to weary the House with the figures, but a lot has been said about large and small bookmakers and a good deal about the difference between different levy schemes. Although I have always regarded the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) as totally charming, I never thought I would agree with her as strongly as I did when she said that it is the small bookmakers who are making very serious complaints against this Measure. That is absolutely true.
I will not weary the House with the reasons, which we can examine in detail in Committee, but if these gentlemen are right in the complaints they are making and if they are going to be either driven out of business or, even worse, 1263 forced into illegality, that is a serious matter for this House.
As some hon. Members know, I have lived in and have some experience of the United States of America, and one of the worst features of the United States is the nature of her gaming industry. Virtually all bookmaking is illegal, and the effect is to put bookmakers into the hands of racketeers. It was never as bad in this country, but it was the case in this country when I was a boy and often carried betting slips, as I have told the hon. Member, that betting was wholly discriminatory. It was perfectly reasonable for a wealthy man to place his bet but it was demeaning for the working class. Many of the bets made were illegal. There used to be a set arrangement between the police and the street bookies. The police would pinch them at a given time and they would be fined a regulated amount which would be paid by the bookmakers to the runners. The whole thing was utterly demeaning and wrong.
Many of my hon. Friends with greater experience than I in this House fought against that, and we changed it, and the bookmakers themselves have done everything they can to drive the fly-by-nights and welshers out of their own profession. I do not want to see us do something which will put financial demands on the small man which will be an inducement to him to go back into illegality.
I do not want to over-dramatise it. I do not say that we could or would reproduce the American situation. But I do say that it is a bad thing that any legitimate bookmaker should be given the idea that it would be wiser for him if the majority of his business were carried on illegitimately. That would be a very bad thing, and I have honest doubts about the financing of the Bill we are being asked to consider on that very point which can better be argued in Committee.
I assure the House that I speak after some study and with some knowledge of this matter. I have had figures quoted to me about the eventual amount which the Levy Board intends to raise—the hon. Member for the City of Chester (Mr. Temple) nods—which are not mentioned in the Bill or in any brief that the Minister has. I regard that amount as unrealistic and potentially dangerous.
1264 Let me switch from that point to something which is out of fashion but which concerns me just as much—the question of honour. The arrangement which we now have was set up on the basis of certain safeguards. We are all adults and we all live in the real world. Nevertheless, I am one of those who believe that words are not light, that they are things that men live by. To give words and not mean them is to destroy the whole basis of the trust which exists between individuals and between Governments and citizens.
The bookmakers are not a very beloved faction. They must be one of the most lightly regarded minorities in the country. As every other speaker has done so, I suppose I should say at this point that I have no connection whatsoever with the industry, either financially or temperamentally. Apart from an occasional bet on the Derby, I do not bet. Nor do I regard bookmakers as being in any way specially favoured or privileged members of society. But they fulfil a function.
They co-operated with this levy legislation on the basis of guarantees and safeguards. It is very easy to say that Parliament is sorry; of course it is. If we like, we can execute all red-headed men on Monday—we can pass a Bill to that effect. It is all very well to say that the bookmakers misunderstood, should have been wiser, should have been more properly advised, should have been told that we can vary legislation whenever we like.
The fact remains that the Bookmakers' Committee has worked very well and honourably and with decency. It has worked this scheme, which I regard as very desirable and which I frankly say I should have imposed had it been my responsibility. But the bookmakers have worked with it on the basis of safeguards. I am bound to tell the House that the safeguards which they accepted, the safeguards on which they offered to co-operate, are not retained by the Bill.
That is the plain fact. It may be that my way of looking at it is wrong and I am anxious to be so persuaded. I come to the discussion with some reluctance and anxious to be persuaded that I am not seeing the issue clearly and that there is an aspect of the case which I have 1265 misunderstood. However, I want quickly to recite the safeguards which are now gone.
The bookmakers understood that they would operate the levy scheme on the basis that there would be two independent members who, with the Chairman, would deride issues in dispute. That has gone. It will now be the Chairman and two members appointed by the Home Secretary to look over the whole field, which is very different. They understood that they would have that independent safeguard which the House of Commons now proposes to remove from them.
Their position in respect of the licensing justices has been varied. If over a period there are two of the offences cited in the Bill, licensing justices will be required—it will be obligatory—to withdraw a licence. That was not the previous position. That was not the guarantee when the bookmakers agreed to cooperate.
Another important change is that responsibility for determining bookmakers' contributions has been transferred from the Bookmakers' Committee to the Chairman and the members of the Levy Board. This is a most important matter for members of the profession. I cite a document with not all of which I agree. Indeed, I have a good deal of objection to the way in which it handles some issues and, as always, I think that I could have done better. The document has been distributed by the bookmakers. I completely agree with it when it says that there is one section of the present Act which provides that in the event of a dispute between the Levy Board and the Bookmakers' Committee about the amount to be paid by the bookmakers, the three independent members of the Board when determining the scheme shall be required to consider and compare the extent of the need for the time being for the contributions, the capacity for the time being of bookmakers to make contributions and the capacity for the time being of the Totalisator Board to make contributions. The document says that the repeal of this section will destroy the only real safeguard the bookmakers have so far had against excessive demands.
On behalf of a section of the community which none of us especially loves, 1266 I am bound to say that that is true. If we pass the Bill, which has a desirable purpose for a desirable body to do good things for a sport, none the less people to whom the House of Commons, or a previous House of Commons, has obligations, to whom it gave promises and safeguards and with whom it made arrangements, will find that all those things are to be taken away.
Because this is the real world, I do not pretend that the Government and the Levy Board or the Home Secretary and the Levy Board and the bookmakers will not still have contacts. I accept that. But I am getting slightly tired of the House of Commons entering into pledges to individuals which it subsequently decides are inappropriate and inapposite and are much better wriggled out of, usually without the slightest consultation beforehand. I beg the House not to do anything at this stage, but when the Bill reaches Committee stage to give close consideration to these points. I regard the safeguards for the bookmaker as inadequate.
It is no secret that many people in the country believe in a tote monopoly. The answer of some people to any inquiry about bookmakers is: "It doesn't matter whether they can pay the levy or not. If they cannot, they will lose their licences and that in the end will be extremely good and we can go to the system in France where they have the pari-mutuel, and we can have a Tote monopoly, which would be excellent."
My only comment is that that was not the arrangement which the previous Conservative Government or the present Labour Government made with the bookmakers. It was not the criterion under which discussions were held. If that was the belief, it should have been stated. I am against the insidious bit by bit introduction of principles not clearly stated in the first instance.
I am told sometimes that it is clever politics. I do not want to know about that kind of clever politics. We entered into an obligation on the basis that the bookmaker would not be eradicated, that there would be no question of a Tote monopoly and that the bookmaker's interests in this should be considered. The Government are obliged to take note of that.
§ Mr. Kitson
Nearly everybody who takes an interest in the racing industry will recognise that the bookmaking industry offers, by the size of the bets it is prepared to accept, a service to the punting public which the Tote does not. For many of us with an interest in racing, the day the Tote raised the minimum bet from 2s. to 4s. it was writing itself off for all time as a racing monopoly. It is not fair to those on the benches opposite or on this side of the House to say that we should like to see the elimination of the bookmaker, whom all of us enjoy seeing on the racecourse. Those of us who have raced in New Zealand, South America and other parts of the world know the lack of interest when the bookmaker is not on the course.
§ Mr. Walden
I agree. I did not say that any Opposition hon. Member wanted the eradication of the bookmaker or a Tote monopoly. But the hon. Member knows who has said that; if not, I should be happy to tell him who has. It is bound to create in the minds of some of us the impression that it is not always the bookmakers' interests which are considered and that it is not always established that there must be a balance between the punters who choose to bet with the Tote and those who choose to bet with bookmakers off the course and on the course. One is bound to have some regard to things that have been said and written, to the plain implications of the statements of certain people. The House should have regard to them, particularly in view of the way in which the Bill has been introduced. I accuse neither side of wanting a Tote monopoly, but simply say that some people do, and that we must weigh the concern for guarantees that have been given against their perfectly legitimate, honourable and sincere view that a Tote monopoly would be better.
I have one last point about owners. This question has been a bone of contention throughout the debate. Of course, it was right to move money towards the owners because of the changing nature of ownership, the fact that increasingly it became syndicated, that we could not depend on a small group of rich men to sustain the Turf as it had in the days of a very differnet level of taxation, when horseracing was a very different game, in a different social climate.
1268 The House must also have regard to some other factors. I have great respect for the hon. Member for Richmond, Yorkshire (Mr. Kitson). He and I must go through the list of winning owners some time. I will look up what they have won, and then privately—because I would not say such things in the House about any individual—estimate the fortunes of the leading 50 or so owners. I have some hesitations about the proposals. We are transferring money from the bookmakers, which is right, to the sport, which is right. We are choosing to do it by subsidising owners, which is right. But I am not sure that we are subsidising the owners that we should be subsidising. I am not sure that in a period when the whole country must exercise considerable restraint we can justify the payments that are being made to certain individuals.
Essentially, what I rose to say was "Beware. Do not let us have the scene we had to endure yesterday of a general accolade of praise for something that was dubious. Hold back on this." The Bill must get a Second Reading, but I hope that the Standing Committee will have the closest possible look at it and that we shall have the issues of principle as well as finance investigated. Slight though the Bill is in its general effect on the country, its effect on the way the House conducts its business and the pledges it gives is serious indeed. I hope that the House will treat it as serious.
§ 11.23 p.m.
§ Mr. Antony Buck (Colchester)
We have had a fascinating debate. I have been amazed by the tremendous knowledge displayed by hon. Members on both sides on every aspect of the racing business.
Another expert, my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton), should have been with us tonight, but, unfortunately, important official business keeps him away. He played a distinguished part in the passage of the parent legislation through the House. He tells me that it had been suggested to him that the Bill was a conspiracy between the Wigg and the Tories, and authorises me to say that any such suggestion is not correct, and that he has had no consultation with the Chairman of the Levy Board about this matter. Our attitude to the Bill at 1269 this stage is one of vigilant neutrality, an attitude somewhat similar to that expressed in the knowledgeable speech of the hon. Member for Birmingham, All Saints (Mr. Walden).
The parent Act was introduced about eight years ago by Lord Butler, as he is now, who said in introducing it that he recommended it to the House and that he hoped that the political and sporting instinct of the House would cause hon. Members to support it. That is what happened, and in due course it was given its Second Reading with the support of the Labour Front Bench. There was a debate which my right hon. and learned Friend the Member for Huntingdonshire described as having an agreeable atmosphere. The same can be said of our debate tonight; there has been an agreeable atmosphere, with much knowledge shown on both sides.
In passing the original Act, Parliament was indulging in, and causing there to be, what can be described as a great experiment designed to help the splendid national sport of horseracing, a business of great importance for this country, with the valuable export element of which hon. Members have spoken.
The experiment got off to a fine start largely through the great work done by Field Marshal Lord Harding, the first Chairman of the Board. It is appropriate on this occasion to pay a tribute to the work which he did in his six years as Chairman of the Board. That work has been rightly described as both understanding and decisive, giving decisive leadership to the Board and to the horse-racing business generally. It helped very much in the early days.
It seems to me—and I am told so by those much more expert than I—that the experiment has, on the whole, been justified by many of its results. One has only to look at the latest Report, the Seventh Report of the Board, to see that there is much to commend it to the House and anyone interested in and concerned about horseracing and the bloodstock industry generally. Two matters in particular gave me satisfaction. One was the completion of the first phase of the development and impovement plan at Newmarket, I hale from that part of the world. I know that it was badly needed, and I am glad at the progress made.
1270 Second, in the absence of my right hon. and learned Friend the Member for Huntingdonshire, I mention the gratification felt in that area—near my own home area—at the fact that there has been a proper grandstand provided, as illustrated in the Report, at Huntingdon racecourse. Clearly, the smaller racecourses have not been neglected. There are other matters giving cause for satisfaction—the provision of the veterinary field force, the forensic laboratory at Newmarket, and the progress made with security—all contributed to by the work of the Board.
In many ways, the experiment has shown itself to be a success, doing great service to racing generally. There is the concern, referred to by my hon. Friend the Member for the City of Chester (Mr. Temple) and other hon. Members, at the fall in attendances at racecourses, but, on the whole, one sees a good many pleasing features.
It is reasonable, after about eight years, that the Government should consider what alterations are needed in the scheme, and we have no objection in principle to amending legislation. We realise that there have been difficulties, as the Under-Secretary of State said in the cogent speech with which he opened the debate. But the Bill reverses certain of the decisions taken in implementing the original Act. In particular, it reverses the decision as to who should have the last word in deciding the total amount of levy to be paid by bookmakers and the Totalisator Board.
The decision made in 1960–61 by the Conservative Government, and the House as a whole, I think, was that one wanted the industry generally, including the bookmakers, to help itself by making its own arrangements. That was one of the reasons why the Levy Board was established and why the matter was left, in essence, to what might be described as the "Three Wise Men".
Another reason was that it was thought doubtful that the Home Secretary or his advisers in the Home Office had the expertise needed to make the required decisions, that they had not the time or opportunity to delve deeply into the affairs of the bookmaking business and the intricacies of the operation of the 1271 Tote, with all their ramifications, it is said now that, before reaching decisions, they will have to consult those best qualified to advise them, including racing interests and, in particular, the Levy Board. If they do that, we shall virtually be back to square one and the 1961 Act.
The Home Secretary is now to have the responsibility of approving levy schemes, and we have doubts about this. In this connection, I asked in an intervention during the Under-Secretary's speech whether the Home Secretary would have the final word as to the amounts to be paid in any scheme and the detailed operation of the scheme. My hon. Friends believe that there is a strong case for saying that any such scheme should be put before the House by way of a Statutory Instrument. If this were done, many of the fears which hon. Members have expressed would be met. If the negative procedure were adopted, we would have an opportunity of raising directly with the Minister anything which seemed to us to be unfair to any section of the racing community.
The Under-Secretary said that the matter would, in any event, come under Parliamentary scrutiny. That will be so, but it will mean hon. Members having to ask Questions and initiating Adjournment debates. I hope that the Under-Secretary will at least make sympathetic noises about regularising the procedure; and then, in Committee, perhaps the Government will accept an Amendment along these lines and so meet the anxieties which have been expressed, particularly by the small bookmakers—or by the small bookmakers who are left—and other interested parties.
I expect that many hon. Members have received complaints from bookmakers about the abolition by the Bill of the criteria governing their capacity to pay the contributions levied on them. This has been done in the Bill by deleting a provision which appeared in the earlier legislation. It is a pity that an explanation about this was not included in the Explanatory Memorandum to the Bill, but at this late hour I will not pursue the matter.
The Under-Secretary gave an assurance about the deletion of the criteria 1272 by saying that the matter would be considered by the Home Secretary when any scheme was devised. The fears which have been expressed on this score, particularly by the bookmakers, would be allayed if such an assurance were written into the Bill. The hon. Gentleman's remarks will have been noted, and we gather that this will be a factor to be taken into account, along with the profit considerations, by the Home Secretary.
I will not go into the question of the need for new enforcement provisions. One can keep an open mind on this matter until the Committee stage. I will not delay the House further, since the Under-Secretary will want as much time as possible to answer the many questions that have been asked. For example, he will no doubt wish to comment on the remarks of my hon. Friend the Member for the City of Chester about a duty which would help the whole of sport—the interesting idea of consolidating the levy and the duty—and the comments of my hon. Friend the Member for Bromsgrove (Mr. Dance)—about differentiating between on-course and off-course bookmakers.
The Bill is somewhat of a curate's egg. We shall be vigilant and hope to make it a good Bill by amending it in Committee.
§ 11.35 p.m.
§ Mr. Albert Booth (Barrow-in-Furness)
I believe that this Bill is before the House because a dispute exists between the Horserace Betting Levy Board and the bookmakers. I may be prejudiced by my experience of industrial disputes, and rather suspicious of Government intervention in disputes. However I feel that we have here a dispute between two parties which have a mutual interest in the continuation of horseracing. Therefore, we should be extremely reluctant to engage in legislation which attempts to resolve this dispute.
Clearly, the Horserace Betting Levy Board has a direct interest in the maintenance of horseracing. If it died, the Board would go out of business. Similarly, if horseracing died a great many bookmakers would go out of business, and so they have an interest in keeping it going. I cannot imagine that those who place bets upon horses would find it nearly so attractive to place bets with 1273 bookmakers for example, on the results of municipal or General Elections. It seems that we are intervening in an area when we might more properly stay out, and leave the parties with a mutual interest to settle the matter.
I do not think that this Bill will settle the dispute. All that it could do is shift the grounds on which the battle is fought, and to introduce new personalities. It would place the Home Secretary in the position of being the arbiter of the scheme whereby money was collected from the bookmakers and placed in the hands of the Horserace Betting Levy Board. This would be an unwise step, because one would have one Minister determining the amount to be collected from bookmakers for the purpose of paying the levy and thereby, inevitably, in a position which might militate against the ability of the Chancellor to collect tax from the bookmakers for a much wider purpose, to which the vast majority of the community would subscribe.
I am certain that there are more of my constituents who subscribe to the idea of taxation being collected on betting for the support of a wide range of social activities, maintaining schools and hospitals and many other services, than there are who support the idea of taxation for the purpose of supporting betting. I very much doubt whether the majority of my constituents draw the fine distinction between the horseracing levy and a betting tax. I doubt whether the bookmakers would actually object to the terms of the Bill, in so far as they make the Home Secretary the arbiter of the scheme, provided that there were safeguards in the Bill against what bookmakers consider to be excessive levies. Most of the objection to the Bill, so far as it comes from the bookmakers, is because it does not contain what they consider to be adequate safeguards.
They recognise that horseracing on the course is the raw material on which their activities are based, and, therefore, they will go along with schemes which are not so unduly expensive as to put them out of business but provide sufficient money to keep horseracing alive. We have a different responsibility. Ours must be to the community at large first, and to those who want to own horses or bet on them, or run bookmaking establishments, second. In the wider interests of the 1274 community we must look with careful scrutiny and with a certain amount of suspicion at any form of levy or taxation devoted to specific purposes to which the whole of our community would not subscribe.
I looked somewhat askance when it was suggested by an hon. Member that one of the reasons why we should support this Bill was that stable lads are poorly paid. I can assure the House that if this Bill contained a Clause which said that the Horserace Betting Levy Board should make a grant to trainers subject to their paying their stable lads proper wages and giving them decent hours—such as not being able to require them to get up at crack of dawn more than a certain number of times a week—then I would regard the Bill with a great deal more favour.
I have not had a lobby from stable lads in favour of the Bill because it will give them better conditions. As the Board proposes to devote any increased levy it may derive under the terms of the Bill to give increased prize money to owners, the House has a duty to consider whether the owner needs the additional money. If the owner was so desperately in need of the money that he was a dying breed, we could have a different attitude towards the Bill. He is not a dying breed but an expanding one. He is expanding more rapidly than the economy. He has increased in numbers from 6,300 in 1959 to 7,700 in 1968. The number of horses owned has increased from 9,000 in 1962 to 11,000 in 1968. These facts do not convince me that owners need a considerable increase in the sum given to them by the Board to enable them to exist and sustain the support.
My understanding of the proposals is that £800,000 of the increased levy will be used to double the grants to owners in the form of prize money. As one who does not claim to know much about racing—
§ Mr. Booth
Hon. Members opposite may have great knowledge of racing but they know much less about other subjects which are dear to the hearts of my constituents. If it were desired to ensure by legislation that there were more 1275 owners and better conditions in training establishments, it might be better to produce legislation to ensure that money distributed by the Board did not go solely to top prize winners but was spread more evenly throughout the industry.
With a view to having some equity within the community, I ask my hon. Friend the Under-Secretary to refer to the National Board for Prices and Incomes the incomes of the owners who are to get this extra £800,000, because I do not know of any other small section of the community who under legislation will be getting such a large increase this year.
§ Mr. Booth
It might save the time of the House if the hon. Gentleman and I were to exchange the sources of our figures afterwards. I will not be dogmatic in my contention about the distribution of the money. However, I understand that it is certainly a proposal of the Board's that a substantial amount should be used to increase prize money. I think the intention is to double the contribution the Board makes to prize money. I know of no proposal by the Board that part of its increased revenue should go directly to stable lads. If they get anything, it will be incidental.
§ Mr. Kitson
The hon. Member should recognise that there is an agreement between owners that if they win a race a percentage goes to the jockey, a percentage to the trainer and a percentage to the stable. Surely, he appreciates that if the stake is increased, the jockey, the trainer and the stable will benefit. This is recognised by everybody in the racing 1276 industry even if the hon. Member is not prepared to accept it.
§ Mr. Arthur Lewis
If my hon. Friend will see me afterwards, I will give him the names of 10 owners, all in the Surtax range, who have had hundreds of thousands tax-free. Then, if the hon. Member for Richmond, Yorks (Mr. Kitson) can tell me of one stable lad who has had £100,000 tax-free, we can try to get parity. I know of no stable boy who has had it.
§ Mr. Booth
I will certainly see my hon. Friend afterwards. However, if between now and the time I see him there is a Division on the Bill, I must indicate my view by saying that there are basic objections to it in its effect on general taxation for wider public purposes and its failure to guarantee that certain laudable interests within the industry are met.
§ 11.47 p.m.
§ Mr. Elystan Morgan
We have had a spirited and wide-ranging debate and I am grateful for the support, albeit qualified, which has been given to the Bill on behalf of the Opposition Front Bench.
§ Mr. Temple
On a point of order. Does not the Under-Secretary require the permission of the House to speak a second time, Mr. Deputy Speaker?
§ Mr. Morgan
Further to the point of order. I apologise to the hon. Member for his having had to point that out. With your leave, Mr. Deputy Speaker, and that of the House, I should be grateful if I might be allowed to speak.
§ Mr. Temple
Perhaps that hon. Gentleman would like to explain why the 1277 Home Secretary has not been present during this important debate.
§ Mr. Morgan
I cannot answer for my right hon. Friend in this matter. I know that he has a number of commitments. I do not think that any comment should be made as to why senior performers, if one might so describe them, have not appeared on either Front Bench.
§ Mr. Arthur Lewis
Further to the point of order. There is a point of principle here, Mr. Deputy Speaker. I agree with the hon. Member for the City of Chester (Mr. Temple) that my hon. Friend the Under-Secretary has not yet been given permission to speak again. That practice is usually followed when there are special reasons or extenuating circumstances, but there are several Ministers in the Department, not only the Home Secretary but several others. No other Home Office Minister has been present. Surely, another Minister could have replied. I am not against my hon. Friend, but if this is such an urgent and important Bill, could we not have had some of those other Ministers? I am not so sure that I shall agree to allow my hon. Friend to go ahead. I object. I do not give permission to him to reply.
§ Mr. Deputy Speaker
The hon. Member is correct. The Under-Secretary did not ask at that time. My attention was drawn to the fact. The Under-Secretary immediately asked for the leave of the House, and no one objected.
§ Mr. Lewis
Further to the point of order. I am sorry, Mr. Deputy Speaker, but when you look at HANSARD you will find that the hon. Member for the City of Chester raised his point of order, then my hon. Friend said that he was sorry that he had omitted to ask for permission and he went on to explain why the Home Secretary was not present. At no time did he ask for the permission of 1278 the House. Therefore, it was not put to the House to give hon. Members a chance to object. I was waiting to object. [HON. MEMBERS: "He did ask."]
§ Mr. Deputy Speaker
I must rule that the Under-Secretary has the leave of the House. It was sought and it was given.
§ Mr. Morgan
I am grateful to you, Mr. Deputy Speaker, and to the House for leave to speak again, if only to enable me to reply to many specific points which have been put to me by my hon. Friend, and put in the form of direct challenges, and I am sure he put them with the intention that, with the leave of the House, I should do my best to reply.
There have been so many matters raised in this debate that I shall try to be selective in response to them, and I am sure the House will understand that I am not choosing the ones easiest to reply to but rather matters which are such that they should be mentioned in a Second Reading debate, rather than in Committee, and are, perhaps, more worthy than others of reply.
First of all, let me mention matters which were alluded to by the hon. Member for the City of Chester (Mr. Temple). He referred to the Benson recommendations and rather relied upon them in support of his contention that Parliament should not countenance giving support to any change in the basis of levy, in that it should be charged upon turnover. I would remind him, with regard to the Benson Report, that this was a very full and lengthy Report, but that on the question of the financing of racing it recommended a levy of not less than £8.8 million, which would have been equivalent to 1 per cent. turnover on horse racing.
The hon. Member also referred, as did many other speakers on both sides of the House, to the levy for the period from April, 1969, to April, 1970, which would raise the sum to £3.84 million. I should like to stress again, as I did in an intervention in the speech of (he hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight), that this should not be regarded as a fixed and final figure at all. It can be a fixed and final figure only if this Bill is defeated. If this Bill becomes law, then it is a matter for the discretion of the Home Secretary, and that discretion, as the 1279 Bill now stands, is an unfettered one. There are all manner of considerations which he is entitled to pay heed to before coming to his decision.
§ Mr. Temple
Is the hon. Gentleman aware that the Chairman of the Levy Board has published details of how that money will be distributed? So the Chairman of the Levy Board must be extremely confident that he is to have that amount to distribute. Otherwise he would not have gone into such detail of its distribution.
§ Mr. Morgan
Whereas the Chairman of the Levy Board has a great deal of jurisdiction under the current law, his jurisdiction in that respect will be very considerably diminished if and when the Bill becomes law.
§ Mr. Walden
Never mind about the Chairman of the Levy Board. What my hon. Friend says about the discretion of the Home Secretary is perfectly true. None of these is a matter for the House. What my hon. Friend is saying to us is that we pass legislation on the understanding that it will then be left to the discretion of the Executive. It is exactly that point to which I am calling the House's attention.
§ Mr. Morgan
I have made this point before. I am not sure whether my hon. Friend was in the House or not—
§ Mr. Morgan
I apologise. Nevertheless, for seven years this matter has been entirely outside the ambit of the House's scrutiny. We are now bringing it into the ambit of the House's scrutiny, and, no doubt, arguments will be put in Committee, if the Bill is passed on Second Reading, that it should be brought more directly into the ambit of the House's scrutiny every year. But that is another matter.
A third point was made by the hon. Member for the City of Chester when he asked why should it be the Home Secretary, why should it not be some other Minister. The reason for this is mainly historical. The Home Office has for a long time been responsible for certain 1280 functions in relation to betting and gaming. I am afraid that one must look upon the Home Office as a net that catches all manner of duties and functions which do not belong specifically to any other Department. Only such a phenomenon explains why a good Presbyterian like myself at an hour near to midnight is detaining the House of Commons on the subject of the Horserace Betting Levy Board.
My hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) asked why Parliament should be involved in this matter at all; was it not an issue between two sets of horseracing interests, the Betting Levy Board and the bookmakers? It is not right for me to go into the basic theology on this because I contend—and I hope no one will accuse me of being over-legalistic—that this matter was settled by the House in 1961. We are dealing now with how the will of Parliament, expressed more than seven years ago, can be carried out. That is the real issue before the House.
The hon. Member for Bromsgrove (Mr. Dance) asked how the money is spent. I am sure that he is aware of the relevant part of the Betting, Gaming and Lotteries Act, 1963, and of Section 25 of that Act. Nothing in that section is changed. In practice the money is spent on modernisation of race courses, on prize money, on transport, on race course technical services, on a service that is responsible for the suppression of doping, on veterinary science research, on breeding and on the 1964 benefit scheme.
My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) said that he had no connection whatsoever with any bookmaking interest. We accept what he says and welcome the detached and objective contribution which he made, albeit at a high decibel level. He said that the Bill should not be described as the Horseracing Betting Levy Bill but as Lord Wigg's Charter for Wealthy Racehorse Owners. I now understand that he does not intend to divide the House—
§ Mr. Arthur Lewis
I do not know where my hon. Friend gets this idea. He evidently has told the Whips that I was dividing the House. I wish that he had told me that, as I knew nothing about it.
§ Mr. Morgan
I came to that conclusion from the fervour and the fury that my hon. Friend managed to instil into his remarks in attacking the Bill. He saw no virtue in it; he saw every evil in it. I hope that I am not pushing him into doing anything which he did not intend. He saw no reason why the Bill should be passed. I put it to him that if the Bill is not passed it will remain in practice Lord Wigg's Charter for whatever it might be, whatever it was under the 1963 Act; if it is passed it ceases to be Lord Wigg's Charter.
The other point in my hon. Friend's speech about which I should comment is in relation to bloodstock. I was asked to tell the House what the balance of payments was in this matter. I am afraid that I have no detailed information. At the moment the value of exports is running at about £1 million per annum. It may be slightly over that. It is likely that the value of imports is lower. I am sorry that I have not been able to be more specific.
§ Mr. Temple
I might point out to the hon. Gentleman that no differentiation is made between racehorses and all other quadrupeds in these export figures? They may relate to horses which are exported to Belgium for slaughter. Those figures are never used by responsible authorities in the horseracing world.
§ Mr. Morgan
I may be wrong about that and, if I am, I will write to the hon. Gentleman. I understand that that is the figure for bloodstock, but I am willing to be corrected on the point, and I will check the matter further.
I agree with the substance of the speech of my hon. Friend the Member for Brixton (Mr. Lipton). He made the point that one effect of the Bill would be to move the main burden of the levy from the small bookmaker to his more substantial brethren. I could not agree more with him in that respect. The scheme has been designed so as to reduce the liability on the small bookmaker and increase it in relation to turnover on the larger bookmaker; and the old flat rate, which must be disproportionate to the turnover of the small bookmaker, has been abolished.
The hon. Member for Brierley Hill (Mr. Montgomery) and the hon. Member 1282 for Birmingham, Edgbaston (Mrs. Knight) said that there was great danger if that was not the Bill's intention, of a move ultimately towards a Tote monopoly. With respect to them, that is completely ridiculous. I hope that they will be disabused of that misconception. I should have thought that bookmakers looking intelligently at the Bill would regard it as a safeguard for their interests. They will be given every opportunity to put their case before decisions are reached by the Secretary of State, and there is no reason to suppose that he will simply endorse the Board's wishes.
The argument is all the more ridiculous when one considers that this year the Tote is contributing 1½ per cent. of its turnover to the levy, and that that compares with one-quarter per cent. contributed from the turnover of bookmakers. Even with the increase, the percentage contribution of bookmakers will be below one-half per cent. of their turnover. It is proper to keep a sense of perspective in relation to these matters.
My hon. Friend the Member for Birmingham, All Saints (Mr. Walden), in a very lucid and well-argued speech, put forward a number of propositions. He argued with clear and understandable logic. But I am afraid that, on each occasion, he was basing that logic on an initial hypothesis that was completely fallacious and impossible. His first contention was that, inevitably, it would lead to illegal betting. It would, if his initial hypothesis that it would destroy the small bookmaker were correct. From what I have explained already about the revised scheme of levy, I am sure that he will acknowledge that that could not possibly be so.
My hon. Friend gave us a lecture on the morality of legislation, saying that solemn safeguards had been given in 1961 and that we were now not entitled to amend that Act in any way. Parliament, as we know, is sovereign. It is entitled to amend or to repeal any Act, with one exception. I am not sure whether it is constitutionally possible to amend the Act of Succession of 1701. That is a very academic point. But I do plead that the substance of the safeguards still remains. I am sure that no hon. Member would put forward the proposition that, provided we maintain the 1283 substance and the character of those safeguards, we should not change the letter of the law when we are passing amending legislation.
§ Mr. Walden
The safeguards to which my hon. Friend refers so cavalierly in his lucid speech were reinforced a good deal more recently than 1961. I understand that, although it is right that Parliament has the right to do what it likes, if, when we abrogate safeguards, we want to maintain trust, we should do so by consent. That has not been done. That was my point.
§ Mr. Morgan
I am afraid that this point will have to be pursued further in Committee. My case is that safeguards have not been abrogated.
I do not want to commit the sin of over-repetition, but I maintain that safeguards that are necessary to be spelt out in detail when dealing with three Government appointees not responsible to the House of Commons are not necessary to be spelt out in the same detail, although relevant—and I am sure that in practice they will be present in the mind of the Home Secretary in coming to his decision—to a Minister who is answerable to Parliament. It is not a question whether the safeguards are abrogated, but whether it is necessary in a different situation to spell them out in such detail.
The hon. Member for Colchester (Mr. Buck), speaking for the Opposition, has given his general blessing to the Bill, but he has raised one or two small matters. He said that he had some doubt whether the Home Office would have the necessary expertise concerning the decisions that it will have to make in this matter. I would merely draw to his attention Clause 1(5) and Clause 4(2) of the Bill, both of which are pretty similar in structure: 1284Before determining a scheme … the Secretary of State may appoint one or more persons to enquire into, and report to him their opinion on, any matter appearing to him to be relevant to the form or content of the scheme.My right hon. Friend, therefore, has access to all expert opinion that would be necessary in this connection.
The hon. Member for Colchester also said that he hoped that the Home Secretary would implement his decision annually by way of Resolutions, negative or positive, that would be laid before this House. Without unduly raising his hopes, I can tell him that we will look again at this matter. However, I do not think that this is either appropriate or necessary.
My hon. Friend the Member for Barrow-in-Furness (Mr. Booth) said that this was a dispute within the industry. This is a dispute between large book-making interests and Parliament. That is the real issue. I do not want to be over-legalistic—and I have sought not to be—but we are told that we are reversing decisions. We are reversing certain decisions, as I have tried to point out, but basically we are not changing the structure of things as laid down in the Betting Levy Act, 1961, and in the Betting, Gaming and Lotteries Act, 1963.
The functions of the Betting Levy Board remain the same. The purposes for which it is entitled to raise money remain the same and the categories upon which it is entitled to expend money remain the same. I invite the House to support the Bill.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).