HC Deb 16 July 1969 vol 787 cc702-21
Mr. Harold Lever

I beg to move Amendment No. 90, in page 81, line 32, at end insert:

  1. (e)in line 5, leave out:
'half of the full duty; and in that case the second half shall' and insert: 'twelve equal monthly instalments to'.
  1. (y) In line 6, leave out '1st' and insert '15th'.
  2. (e) in line 7, leave out
'the second half of the duty' and insert 'any such instalment'. (f) in line 7, leave out second half of'.

(g) in line 9, leave out from beginning to may' in line 10 and insert: ' and the balance of the duty'.

Amendment No. 91, in page 82, line 7, leave out from 'betting' to end of line 15 and insert: then, subject to and in accordance with the following provisions, the holder of the licence shall be entitled to a partial repayment of duty.

  1. (2) If at the time of the surrender of the licence the whole of the duty has been paid, the repayment under this paragraph shall be—
    1. (a) three-quarters of the duty paid, if the licence is surrendered before 1st January;
    2. 703
    3. (b) one-half of the duty paid, if the licence is surrendered on or after 1st January and before 1st April; and
    4. (c) one-quarter of the duty paid, if the licence is surrendered on or after 1st April.
  2. (3) lf, by virtue of the exercise of the option under paragraph 4A of this Schedule, only half of the full duty on the licence was paid at the time of the grant, and the second half has not been paid, there shall be no payment under this paragraph unless the licence is surrendered before 1st January, and the repayment shall then be one-half of that which has been paid.

Mr. Lever

As the Bill stands, the full amount of betting premises licence duty must be paid when the licence is taken out—that is, normally on or before 1st October. The Amendment provides that a person taking out the normal full year licence before the end of February has the option of paying it either in one sum or in two instalments of which the first will be due not later than the day on which the licence becomes effective and the second not later than 1st March.

Amendment No. 91 makes the necessary consequential alterations in the present provisions for repaying licence duty on discontinuance.

Sub-Amendment (e) tabled by the hon. Member for the Isle of Thanet (Mr. Rees-Davies) seeks to make the duty payable by 12 equal monthly instalments. It is defective in achieving that end, but that is not the point. We feel that we cannot undertake the administrative additional expense of breaking down these payments into smaller sums, much as I would like to have assisted the bookmakers in meeting the extra charge. I have gone as far as I possibly could to help them by giving them a considerable extension of credit compared with the original situation. It was only with very genuine regret that I concluded that I could not, for reasons of technical administrative difficulty, break down the instalments into smaller sums. It was not for lack of willingness to help. It was simply that the administrative inconvenience of it overcame me.

For these reasons, I recommend the acceptance of the Government's Amendments.

Mr. Rees-Davies

I cannot accept that reply to my Amendment. The administrative inconvenience will be no more and no less than that which is already accepted and surmounted by all local authorities.

There are two matters of considerable importance here, and the Treasury has, I believe, totally overlooked one of them. I believe that I am right in saying that there is no precedent in any Finance Act or analogous statute under which one takes a poll tax before the person begins to trade. I challenge the Government to produce a precedent for that type of taxation.

Let us assume that I take up a licence as a bookmaker. It is proposed that I should pay to the Government three times the rateable value of the premises before I begin to trade. This is grossly inequitable. There is no question of giving credit. Credit has not arisen. I have not begun to develop the trade in respect of which the tax is to be paid. That is the first point.

There are 16,000 betting shops in this country and 2,000 S.P. outlets, largely by telephone, making a total of 18,000. In 1966, the Government introduced a betting tax of 2½ per cent. In 1968, they doubled it to 5 per cent. This year, seeking to draw a differential, they have imposed a further tax, a tax on earnings and intended to be such, of 1 per cent. levied by a different method. It is intended to take this tax from the trading profits of the bookmakers themselves. Instead of being a tax on the punter, a betting tax, it is a direct tax upon the trader himself. Before he begins to trade, and despite the Government's Amendment, he is asked to pay up a substantial sum of money. I know of no precedent for behaviour of that kind by this or any previous Government. It involves collecting in advance £7 million from the bookmakers. As a result of the Amendment, it involves their paying in the month of February, before the season begins, half that sum, that is, £3½ million, and the other half—I do not quite understand the difference between 5 and 7 months—at a somewhat later date.

The question of rateable values and the practice in collection of rates is of direct relevance here. It has been the policy of the Labour Party and the Labour Government, both in opposition and in Government, to give people the right to pay by monthly instalments what they are called upon to pay in respect of rateable premises. We are asking no more for the bookmaker than we ask for the householder, that he shall pay pari passu on the same system, paying by instalments what is demanded of him, in this case three times the rateable value. Such a system is of even more importance when many of the people concerned have small capital resources and are able to pay only out of their profits and earnings month by month.

An undertaking was given in Committee that the question would be sympathetically considered. It is no answer to say that the Treasury is unable to do what every local authority is well able to do. There is no reason why a licence should not be taken out for a betting office, the bookmaker being able to pay one month's tax. If he does not pay, his licence is automatically revoked. I do not accept the excuse which has been given, and I do not believe that it is true. I know that it is not. The real reason behind it is the fear that the bookmaker may somehow not meet his obligations. But there is a complete deterrent, namely, cancellation of his licence.

8.15 p.m.

Furthermore, this method of taxation is no longer valid. The trend is away from it. As regards bingo, the Chancellor is on record as saying that it is inequitable to continue dealing with it by reference to rateable value of premises since that does not relate to the volume of gaming. Therefore, the Treasury cannot argue this on principle. The principle is now eroded. We are moving into a system under which the tax is calculated according to turnover and the volume of gaming, and there is no case for saying that we should continue to do it by reference to the premises. The House must direct its attention in considering this question to turnover, to the mark-up of profit.

The reason is plain, and I can give examples which illustrate the point in startling fashion. The Treasury will at least recognise that it is wholly wrong—I always thought that the party opposite took this view, though it does not seem to do so nowadays—to levy on the big company a much smaller amount of tax than is levied on the small trader. But in this case the reverse is true, and I have figures to show how it works which even this Government, with their somewhat jaded palate, must appreciate.

Ladbrokes has premises with a rateable value of £24,000 and a turnover of £20 million. It will pay in tax by reference to rateable value of only 0.12 per cent. of turnover. On the other hand, a bookmaker at 75 Market Street, Crewe, will carry a tax of £4,791 on a weekly turnover of £1,000 because the rateable value is £1,597. Thus, a small operator working a betting office in Market Street, Crewe, has to pay 4 per cent. in taxation by reference to the premises which he holds. A man fortunate enough to be in premises at 51–2 Castle Street, Canterbury, however, with a weekly turnover of £3,500—over three times more than the man in Crewe—but with a rateable value of only £138 will pay in tax a mere £414, or less than 1 per cent.

I could cite over 100 examples taken from different parts of the country, but I do not do so because it would bore the House. I am ready to supply figures to the Treasury showing that the percentage variation in tax paid by different betting offices goes from a mere one-tenth of 1 per cent. for Ladbrokes to over 4 per cent. for a bookmaker who happens to have chosen premises in a good area where the rateable value is high.

What is the effect? First, there is a clear discrimination between the credit bookmaker and the man in a betting shop. The credit bookmaker who works on S.P. and operates through the telephone will pay a relatively small amount of tax because he does not need premises with a high rateable value. Very often, he needs only a couple of offices on an upstairs floor. Those who have premises in new, influential and expensive shopping areas, on the other hand, where the rateable value is high, pay a large amount of tax.

The effect is that all who remain in business will wish to move to dingy shops in back street areas, where the tax they must pay will be negligible. Those with six or seven different premises will close those in the areas of high rateable value and retain those in dingy, smaller areas with a far lower rateable value.

But the position is worse, because where they have five or six premises they are unable to carry the payment of 1s. in the pound that the Government have now decreed, when the very small bookmaker is expected to carry on top of that a substantial additional amount of money, which in many cases seems to average from £1,500 to £5,000. This is a crippling burden. The bookmakers whom one has seen in different parts of the country recognise that they will not be able to meet this obligation. The Government's policy means that those like Hills and Ladbrokes who are in a substantial way of business will be able to pick up at virtually nominal rates small betting offices in different parts of the country.

The policy that was accepted by the party opposite when it was introduced by the Government's Conservative predecessors was that we were to give preference to the small local bookmaker, protect the small man and give him the right to practise his trade because of his community interest. This tax, and the way in which it is inequitably fixed, will result in the reversal of that policy. It will mean that the small man will not be able to continue in business, and the big combines will be able to take over. That will be the end of the very principle for which we fought. It will mean that the building up of the individual bookmaker into a respectable status, giving him the chance to grow up and become comparable to the local publican, will be gone. Some of those who are much aggrieved by the Government's policy will unfortunately revert to what they were before.

Let us not forget who many of the small bookmakers were who had their preference when they applied for betting office licences. I see an hon. Gentleman opposite who has a considerable knowledge, as a justice of the peace, of granting licences of this kind in a large area of London, and he will recognise that what I say is true. In the East End and the City, for example, many licences have been granted to men who were street bookmakers. They came forward and set up businesses which have been properly and carefully look at by the local justices, and they have been very successful. They are continuing in business, but the tax will hit them severely, and those that remain in business will undoubtedly group their businesses, and give up some of their licences—

Mr. Deputy Speaker (Mr. Sydney Irving)

Order. I have given the hon. Gentleman fair scope, but he is not really relating his remarks to the Amendments, which are primarily concerned with payment by instalments.

Mr. Rees-Davies

With respect, Mr. Deputy Speaker, I am. What I am saying is that if one seeks to impose a burden of this kind, where one person is paying a tax of 3 or 4 per cent. on his business and another is paying a mere one-tenth of 1 per cent., it is absolutely essential to enable the small bookmaker, who may be carrying a tax burden of as much as 3 or 4 per cent. on his business, at least to obtain the earnings first. However administratively inconvenient it may be, if it be so, it is essential that he be given the opportunity of paying the tax month by month.

I do not believe that this is one of the matters which have received the attention of the Financial Secretary to the degree that other matters have. I would have been happier if the Chancellor had thought of giving the matter his attention. We have never yet seen him during the passage of the Bill. We never saw him on Second Reading, he was never seen in Standing Committee, and he was seen yesterday only to report Progress at 11 p.m. Today, he never came in even to listen to the main debate.

Therefore, we have a unique situation. We have the unique precedent of collecting a tax before anyone has the chance to earn the money to pay it, and the arguments relating to such a precedent are never heard by an absent Chancellor, who treats the House with contempt and is not prepared to listen to an argument of any kind.

Mr. Alexander W. Lyon


Mr. Rees-Davies

I shall give way in a moment. The Chancellor, who is an utter disgrace, imposes on the Financial Secretary such a burden as almost to cost him his health, and cannot be bothered to come and listen.

Mr. Lyon

I hope that having had the courtesy to give way the hon. Gentleman will have the equal courtesy to eat his words. My right hon. Friend the Chancellor was sitting here through most of the preceding debate, when the hon. Gentleman was out of the Chamber. I hope that he will now retract.

Mr. Rees-Davies

On the contrary. I am delighted that the Chancellor's P.P.S. should seek to defend him. I was here through the whole of the debate until about half an hour ago. The Chancellor was not here yesterday, on Second Reading or in Standing Committee. He did not listen to the general spread of the bookmaking argument before, and he has not listened to it now. It is about time he did a little work instead of putting it on his loyal and capable servant to such a degree as to cause a breakdown in other people's health. I very much hope that we shall have him here later, and that he will be given notice before the next series of Amendments, which will also be of the greatest importance to other industries.

Mr. Arthur Lewis

I support the remarks of the hon. Member for the Isle of Thanet (Mr. Rees-Davies) on the Amendment, but not his comments about the attendance of my right hon. Friend the Chancellor. With great respect to him and my right hon. Friend, I would rather have my right hon. Friend the Financial Secretary here than the Chancellor, because I think that he understands more about this subject and is more liable to be understanding. I am not concerned with whether or not the Chancellor is here.

The hon. Gentleman is to be congratulated in the case he has made. As I said earlier, I have always been in favour of fair and equitable taxation on betting, gambling and gaming. But the tax with which we are now concerned is completely unfair on a section of taxpayers. We are singling out a section of the business world who happen to be bookmakers and contribute large sums to the Treasury and are saying to them, "You shall pay three times the rateable value of the premises you occupy before you have done any business. Before you have any money you will have to pay that sum. "This is in advance of knowing whether they will actually earn the amount. The hon. Gentleman was also right in challenging my hon. Friend to say whether any other section of the population is so taxed.

8.30 p.m.

I believe that I heard someone—if it was not my hon. Friend it was another of the little group in that corner—saying that other licences are paid in advance, and that is true. I pay my dog licence any my radio and television licence in advance. But the payment of 7s. 6d. for a dog licence and £6 for the pleasure of watching my television is rather different, both in principle and amount, from charging three times the rateable value on a tax basis. Yet that is what is happening here.

My sub-Amendment would not only give these people the chance to pay by monthly instalments, but provide my hon. Friend with the ways and means of doing it, thereby obviating his claim that it is not practicable. It would help the Post Office in the process of encouraging the build-up of its giro system.

The Postmaster-General says that the giro system is in difficulties since it is not getting enough business. If the bookmakers could pay by monthly instalments into a giro account, the giro system, which is computerised, could keep all the records for the Treasury and the Inland Revenue and there would be no need to worry. The giro system could tell the Treasury from day to day whether the bookmakers had paid their monthly instalments on the due date. There would be no extra cost to the Treasury or to the bookmaker and no difficulty with regard to taking on more civil servants. There would also be a helpful income to the giro system.

The solution is quite simple. My right hon. Friend would be blessed by the Postmaster-General for helping to increase the revenue and services of the giro system—and let us not forget the free advertisement which the giro system would receive. No doubt William Hill would say, "We pay our licence to Giro No. X." I cannot see how any heavy expense or difficulty would be involved.

The Chamber is almost empty. Few hon. Members are here. Bookmakers are not the most lovable people and not many are willing to speak for them. But this can be a dangerous precedent. I wonder what would happen if the Chancellor were suggesting that we should charge the surtax-payer three times his estimated surtax in advance. One can imagine that the House would be full of surtax-payers. The same would be the case if other forms of taxation were to be levied on the basis of payment in advance of receipt. This is what is happening here and about £7 million is involved, although £7 million may not seem much to the Chancellor of the Exchequer with his large Budget.

There are more betting shops in my constituency than in any other constituence, according to the official records. Most of them are small betting shops and they will have to pay, pro rata, more tax than the large establishments like William Hill, Ladbrokes and so on, in some cases four or five times as much. Can the Financial Secretary honestly say that the system will be fair and equitable? Is it fair that these people should pay in advance three times the rateable value of their premises with no opportunity of paying by instalments? Next door to the betting shop will be the shopkeeper who has to pay tax on the goods he sells, but he can pay the rates on his premises by monthly instalments. Yet the betting shop next door will not be able to pay by monthly instalments a tax which is based upon the same rateable value. The bookmaker will be able to pay the rates on his premises on a monthly basis by giro, but he will not be allowed to make payments through the giro for this tax. Why? What is the difference? What prevents the Chancellor from accepting this suggestion?

The Financial Secretary has said that there are difficulties and obstacles, but he did not deal with this suggestion, which would be helpful to him, the Inland Revenue, the Post Office and the bookmakers.

I issue a warning. Once this system starts what is to stop a system of taxation in advance being imposed upon us all? There will be nothing to stop the Treasury from imposing a system of taxation in anticipation of what may be earned.

Surtax is paid in arrears. But we are not asking that this tax should be paid in arrears or on the dot. We are asking that they should be allowed to pay by monthly instalments as the tax becomes due.

It would be helpful to the Chancellor if he were to initiate this system. He would have a ready-made book-keeping system which would keep him up to date as to who had paid and who had not. He would then be able to keep an account of what was coming in.

I should like to pay tribute to the giro system, which is a marvellous inno- vation, well-organised and efficient. The trouble is that it does not get enough publicity and not enough people are using it who should use it. The Treasury could encourage use of the system by giving bookmakers the opportunity to pay this tax through the giro. The Treasury could say to the bookmakers, "You may pay the tax through the giro by monthly instalments which will mean that you will not have to pay 12 months in advance". I do not know about the economics of the matter, but such a procedure might help to offset some of the losses which might be incurred by the giro system.

I ask the Treasury to give careful and serious consideration to this matter. If this suggestion is not taken up now, I prophesy that it will very likely be adopted in some future Budget to get in revenue rather than by the use of other tax methods which the Treasury are so clever in inventing from time to time.

Sir E. Bullus

I should like to associate myself with the powerful case made by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davis) and by the hon. Gentleman the Member for West Ham, North (Mr. Arthur Lewis). I have been in communication with the Financial Secretary on this matter, and I hope that he will not mind my quoting from one of his courteous letters. He said in the letter: The possibility of the licence duty being paid by instalments was discussed in the Standing Committee on the Finance Bill on 11th June, and I then undertook to consider the question of the time factor for payment before Report stage of the Bill. I know that you will not expect me to say more at present. I did not expect him to say more at that time, but I hope that he will be able to say something more today.

I am not a betting man and I never thought that I should be standing up in Parliament defending the bookmakers, but they fulfil a demand in our society. They have a case, they pay their taxes, and they are the constituents of many hon. Members. I have been interviewed by members of the North-West London and Middlesex Bookmakers' Association Limited, and I have learned something about the art of betting and also about some of the difficulties that face bookmakers today.

They were at great pains to point out the effect of this rateable value tax on some smaller bookmakers. They produced a list, with which I have no reason to disagree, showing that some of the larger bookmakers will not be unduly hit by the tax, although the representations of the big bookmakers said that they rather resented paying this additional tax.

The Secretary of the Association gave me a list, taken at random, showing how the tax would be likely to hit some of the bookmakers in the Middlesex area. The weekly turnover in a case in Green-ford was £4,500; the weekly betting duty, £245; the rateable value duty, £13; and the increase in tax, 5 per cent., which might appear to be reasonable.

The right hon. Gentleman said later in his letter: I appreciate that the new duty may not necessarily be borne by betting businessmen in proportion to their turnover, but it is not pitched at such a level as to impose an unfair burden on bookmakers or their clients. After listening to the deputation, I came to the conclusion that I could not agree with that last sentence.

8.45 p.m.

Among other cases pointed out to me, there was one at Ruislip where the weekly turnover was £385, the weekly betting duty was £19, the rateable value duty was £18 and the increase in tax 95 per cent. In another case at Southall, the increase in tax was 78 per cent. In yet another case at Edgware, it was 48 per cent. These represent considerable burdens on the-smaller bookmaker, and some of them may be put out of business, in which case the Treasury will lose the tax al together.

I hope that, at some time in the near future, the Financial Secretary will be able to give some help to small bookmakers who may otherwise be driven out of business. It could have far-reaching effects. If the small bookmaker is driven out of business, I can see a return to street betting and the other conditions which pertained prior to the recent Betting Act. The Government's proposal can have long term implications.

I know that the Financial Secretary is sympathetic, because I have had discussions with him. I hope that he will accept this Amendment and allow payment to be made monthly and also that he will give special consideration to the case of the smaller bookmaker.

Mr. Herbert Butler (Hackney, Central)

I am sorry that I did not hear the whole of my right hon. Friend's speech. However, I arrived in time to hear him say that it would be very difficult to collect the duty and that the Treasury could not meet the requirements in this respect. Having read the proceedings in Committee where sympathetic consideration was promised, I fail to understand the argument that it would be impossible to collect the duty in monthly instalments.

For many years, the Labour movement has argued that the rateable value of residential premises has in many cases been inequitable because people are not always able to choose where they reside.

Since the inception of betting shops, I have served on a betting committee which covers a very large area. The Act requires betting committees to consider the requirements of their neighbourhoods. Certain planning permissions have to be obtained from local authorities, and then a decision is made in each case before an applicant can open a shop. In the area which is familiar to me, sometimes a large shop becomes available and sometimes a small shop. Providing that certain physical conditions are present, the betting committee will usually agree to an application.

I am no friend of bookmakers. I do not bet. I am no friend of people who gamble. But to impose a tax which is three times the rateable value of premises which are used for a legitimate business has no relevance to equity. It is imposed in an arbitrary fashion. It has no relation to the facts of life and the capacity to pay of the person engaged in the business. It is merely because a shop is sited in a main street as opposed to a back street. But a back street shop may do three times the business of a shop in the main street, because there are often one or two betting shops in the main street.

If a local authority puts up rails at the edge of the pavement in front of a shop and people cannot pass directly from one point to another, they will not go into the betting shop, furniture shop or other shops. The siting and size of a shop in which a person carries on his business is purely fortuitous in many cases. Fundamentally, therefore, the rateable assessment of premises, either for the purpose of residence or for carrying on a business, should have no relation to the amount which people pay to the Exchequer. The relevant consideration should be the profitability of the business in which they are engaged. This runs counter to the whole principle of taxation, which is the ability to pay.

I am not particularly enamoured of the activities of people engaged in betting professionally or otherwise, but we must have regard to the equities of the situation. In this instance, my sympathy lies with those who are engaged in this particular profession.

I have a business in my constituency and I know the feelings of people in the area. Even today there is an increasing tendency towards street corner betting with people not conforming to the law taking bets and not only avoiding this, but avoiding other impositions placed upon the betting fraternity. There will be an increase in this type of betting, and then on the telephone, instead of people going into betting shops.

I am not arguing about the morality of these things or whether we should have this form of conduct. But the man or woman who is carrying on a legitimate business, in accordance with the law, is faced with an imposition which is entirely inequitable and should never be imposed.

My right hon. Friend has said that he will sympathetically consider the matter. It has been pointed out that local authorities encourage people, in order that they should not be faced with a high bill, to pay their rates in weekly, monthly or quarterly instalments. I can assure my right hon. Friend that many small bookmakers are now in the position that, whereas before they often wanted to sell out to Ladbrokes and other people, they are facing the shutting-down of their businesses consequent upon all kinds of impositions. The Act never visualised making facilities available for the big boys in the betting business to take over the smaller ones. This is the last thing that we, on this side at any rate, want if the Government say that these are legitimate businesses. Surely, we do not want people due to our powers of imposing taxation and levies upon them, to be the victims of the big boys who have stepped into this business.

I ask my right hon. Friend to look again at the argument which he has advanced. He said that it could not be done because it was administratively difficult. That may be, but surely we should have some regard to justice and fairness in this matter.

Sir Ronald Russell (Wembley, South)

I rise briefly to support what has been said by my hon. and gallant Friend the Member for Wembley, North (Sir E. Bullus) and the hon. Member for Hackney, Central (Mr. Herbert Butler).

I apologise for not being here earlier, but I thought that this matter would arise on a later Amendment.

I was present yesterday with my hon. and gallant Friend at the meeting with the North-West London and Middlesex Bookmakers Association Ltd. Great hardship is being caused to the small bookmakers, whose interests we should protect even more than those of the larger ones. I hope that the right hon. Gentleman will look at this matter sympathetically in view of the street corner betting which is likely to be encouraged.

Like my hon. Friend, I am not a betting man, but an injustice is being done here. I hope that the right hon. Gentleman will give serious consideration to this in his usual sympathetic manner, and put the matter right, because it is doing a great deal of harm to small bookmakers.

Mr. Hamling

I should have preferred to have had Amendment No. 5 selected, because that would have suited my case much better than the Government Amendment and the consequent Amendments that we are considering. I should have liked an Amendment to abolish this tax altogether, because it is a bad tax, but I cannot argue that except in an indirect way in so far as it is relevant to this Amendment.

I should have preferred, when we were presented with this tax, and bearing in mind the Amendment before us, to have had a much more satisfactory explanation of why the tax was put on at all. My right hon. Friend says that the general justification is that we must have some more revenue from this area, and that this is somewhat less than 1 per cent. of the entire turnover.

Mr. Deputy Speaker

Order. The hon. Member cannot, on this Amendment, argue the whole principle of the tax, but only whether it should be paid by instalments.

Mr. Hamling

I mentioned that only in passing. I want to come to the point of the Amendment. The Government are proposing that people should pay half the injustice at one date, and half the injustice at another. The fact that someone has to pay an unjust tax in instalments does not make the tax any more just. It merely spreads the injustice over a longer period, and perhaps makes the point of irritation more frequent.

What we are asking people to do is to pay the tax in instalments before they have the money with which to pay it. I have met a number of small bookmakers in recent weeks, and many of them have told me that they cannot pay even the instalment of the tax, even half the tax, on the date laid down.

A constituent friend of mine, a bookmaker, lives in Eltham. He is having to sell four of his shops because he cannot meet this sort of obligation, and even if the Amendment is carried he cannot meet it. He has five shops and he may have to sell the lot and perhaps go out of business. He and his family have been reputable bookmakers for about 60 years.

The Amendment is not good enough, because the instalments referred to are based on rateable value, and this is inequitable. The instalments are inequitable. The bookmaker whom I mentioned has a turnover of about £25,000 a year. I have seen his books and his returns of tax, so I know that the figures are accurate. I have been through them carefully. The rateable value tax he will pay is £780, which is 3 per cent. of turnover. He will be expected to pay the first instalment of £390 before he has earned a halfpenny. He cannot do it. The money is not in his shop to do it. That is what the Amendment does, and what goes for him goes for others too.

This proposal is grossly inequitable as it affects one betting shop as against another. This man has five shops. The rateable value of Belvedere is £184. The levy will be £550. The rateable value of Wood Green is £78, and the levy will be £294. The turnover of these shops bears no relation to the rateable value levy. To that extent I cannot find it in my heart to accept the imposition of tax under the Chancellor's Amendment. I have been sent figures of one shop with a turnover of £69,000 which is liable to pay only £150 in rateable value levy. That bears no relationship to the position in which many other small bookmakers find themselves.

I ask my right hon. Friend to look again very closely at the whole basis of this tax and to take it from me that the Amendment is not sufficient to deal with the difficulties being experienced by many small betting shops I am afraid that as a result of this imposition some betting shops will close. Far from increasing the amount of revenue, there will be less coming in.

9.0 p.m.

Mr. Harold Lever

I recognise the criticisms of rateable value as not being necessarily the ultimate in perfection in assessing the appropriate rates of duty. I accept that there are better and more precise ways for applying taxation where they are possible and appropriate. Certainly we shall keep this impost closely under review this year.

Mr. Herbert Butler

What does that mean?

Mr. Lever

It means that we shall examine cases of differentiation such as have been indicated. It is not necessarily either the ultimate in fiscal perfection as a tax or the most permanent instrument of tax. In other words, it does not follow that on review the differential that we were seeking to achieve would be repeated in this form if it produced the kind of difficulties suggested.

Mr. Butler

What happens to the small bookmaker who has gone broke while the review of the position is being undertaken?

Mr. Lever

The suggestion that small bookmakers will go broke in the meantime is somewhat exaggerated. The average cost of this duty is about 1 per cent. Some people may be paying 2 per cent. or even 3 per cent. of their turnover, in which case a certain degree of difficulty may arise, but it is quite out of the question that they will go broke in one year.

Duties of this kind have been imposed before in relation to rateable value, and they are still in existence in respect of gaming premises. The hon. Member for the Isle of Thanet (Mr. Rees-Davies) says that he does not know of a case where a licence requires payment in advance of earning the money. I can give him one example: casinos pay up to £100,000 when they get their licences, and they have to pay it in one lump sum. We must be realistic about this. This provision was announced in April, and bookmakers were told that they would have to pay the lot in October. It was then thought that six months would be enough time. I looked at the position with real sympathy, however, and I decided that we could reasonably split the payments so that bookmakers paid half in October, after six months' warning, and the other half nearly six months later, so as to temper the wind to the shorn lamb and not put the lamb entirely out of business —if lamb is the appropriate description.

Mr. Rees-Davies

Not only was there the most violent objection to that, in terms of rateable value; it must be remembered that only 12 premises pay that high rate of tax, and they have already made substantial sums of money as assets to enable them to pay the rateable value tax. If it be a precedent of any kind it is of singularly little value.

Mr. Lever

The hon. Gentleman said that he had never heard of any such thing occurring, and I gave him one example. The bookmakers were given six months' warning in April that this would come in October. I will certainly keep a keen eye on all that is happening. I accept that it is not necessarily an ultimate and permanent way of achieving the Chancellor's objective.

Might I say a word about the comments, kindly intended towards me but most unjust towards the Chancellor, made by the hon. Member for the Isle of Thanet. He was not his usual self in making these criticisms of my right hon. Friend. I can assure him that the Chancellor has been closely concerned with every aspect of this Finance Bill.

The detailed labour that goes into it is such that no hon. Member could say that there is a single Treasury Minister, least of all the Chancellor, who is in danger of underwork or not contributing enough time and effort towards the preparation of the Budget. I am sure that the hon. Member, when he comes to reflect on this, will not want to persist in his remarks.

Sir E. Bullus

When the right hon. Gentleman says that he promises to keep this under close review, is he speaking personally or does he mean that if perchance he goes to some other post the Department will watch it closely?

Mr. Lever

I am speaking for the Government. It will be Government policy to watch it closely. The views I have expressed are not merely a personal commitment or a reflection of my personal attitude. I am reflecting a governmental attitude towards this. I understand some of the disquiet of my hon. Friends, but I hope that they will accept this assurance, and also accept that we have given every reasonable assistance to these people.

Mr. Arthur Lewis

My right hon. Friend has spoken about the difficulty of accepting monthly payments but has not said a word about doing it by giro.

Mr. Lever

The difficulty about accepting payments that are too fragmented is that these are licence payments. It is easy for us to get a giro list of people in default or in arrears. The problem will arise as to whether these people ought to be treated as though their licence was not in existence because they were in arrears. Many thousands of people are concerned. This presents a technical difficulty. If licence fees are paid in arrears are the men to be suspended?

Mr. Arthur Lewis

They should be monthly in advance.

Mr. Lever

It is a problem of chasing many thousands of people.

Mr. Rees-Davies

I know what the Treasury thinks, and it is quite wrong. It thinks that bookmakers will not pay. The Government have taken powers to cancel or suspend bookmakers' licences. If they do not pay then they will go to the justices, and the licence will be suspended or cancelled. They will pay all right, they will have to. They cannot afford to wait on the ordinary Inland Revenue processes or they will find themselves summoned with a view to cancellation.

Mr. Lever

It is a question of balance. We are talking of relatively small sums, £100 to £150 from these small bookmakers. It will be found that the larger bookmakers will be able to manage it. We have given them an extra five months, making nearly a year in all. I would have liked to have met all the requests, but I cannot go beyond what I have told the House. I offer the House the assurance that this will be kept under consideration as it operates.

Amendment agreed to.

Further Amendment made: No. 91, in page 82, line 7, leave out from 'betting' to end of line 15 and insert: 'then, subject to and in accordance with the following provisions, the holder of the licence shall be entitled to a partial repayment of duty.

  1. (2) If at the time of the surrender of the licence the whole of the duty has been paid, the repayment under this paragraph shall be—
    1. (a) three-quarters of the duty paid, if the licence is surrendered before 1st January;
    2. (b) one-half of the duty paid, if the licence is surrendered on or after 1st January and before 1st April; and
    3. (c) one-quarter of the duty paid, if the licence is surrendered on or after 1st April.
  2. (3) If, by virtue of the exercise of the option under paragraph 4A of this Schedule, only half of the full duty on the licence was paid at the time of the grant, and the second half has not been paid, there shall be no repayment under this paragraph unless the licence is surrendered before 1st January, and the repayment shall then be one-half of that which has been paid.—[Mr. Harold Lever.]

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