§ Order for Second Reading read.
§ 4.29 p.m.
§ The Secretary of State for the Home Department (Mr. Reginald Maudling)
I beg to move, That the Bill be now read a Second time.
The need for this Measure arises from the financial problems of the totalisator, which have been growing more serious since 1968 and have now reached a very serious situation.
§ Mr. Maudling
The Government have to decide whether the tote should be allowed to collapse or whether it is in the general interest that it should be maintained. In either case, legislation would be necesary either to wind it up or to maintain it.
The Government, after considering the whole matter, came to the conclusion that in the interests of racing as a whole, and in particular in the interests of the punting public, the totalisator should be enabled to continue in operation in competition with the bookmakers. That is fundamentally what the Bill is about.
We were fortified in this conclusion by general agreement with this principle. It is interesting to look at overseas experience. Most countries where there is any degree of horse racing have a tote monopoly, even though in many cases they are strongly private enterprise countries. Many people argue that a tote monopoly is the best system in the interests of racing, the race-going public and, incidentally, the Exchequer.
I am not putting that case before the House today. However, it is fair to say that there are very few countries where bookmaking is allowed as it is here. I can identify only Ireland, South Africa and, to a limited extent, Australia. In all countries where bookmakers operate, they operate under competition from a totalisator. I cannot find any example of a country where the bookmakers have the freedom to operate without any 699 tote competition. Therefore, experience throughout the world justifies the conclusion that the totalisator should be allowed to maintain itself in a proper competitive situation with the bookmakers.
Although I have received many representations on this matter, many of them of a similar character, I do not recall any to the effect that the tote should be allowed to collapse. Many people have said to me, "We do not like your Bill, but we accept that the totalisator is a desirable facility for the race-going public and for racing as a whole. Therefore, it would be a bad thing if it were wholly eliminated."
I therefore conclude that there is a wide measure of support for the basic principle of the Bill: that the totalisator should be enabled to continue in being in competition with the bookmakers.
§ Mr. Maudling
Exactly. That is what I said.
I should like to mention the history relating to this matter. Totalisator betting on horse races first started in this country in 1928 under the Racecourse Betting Control Board, which was established not as a State enterprise but as a non-profit-making body who surpluses were to be devoted entirely to horse racing and horse breeding. Incidentally, that Act made it lawful for bookmakers to operate from pitches on the course, whereas previously they could move around only among the spectators.
The impact of the tote on racing can be judged from the fact that in the first year of its operation course attendances went up by about 20 per cent. Between 1928 and 1960 the tote contributed a total of £10 million directly to the industry and about £5 million in other ways, at the same time returning prices to the punter which compared favourably with those offered by the bookmakers. Therefore, between 1928 and 1960 the totalisator did a good job along the lines that it was set up to do.
In 1960 a change came when licensed betting offices were legalised for the first time. In the following year the Horse-race Betting Levy Board was established to use some of the profits of those offices 700 for the benefit of the racing industry in compensation for the diminishing attend-dances on courses which it was rightly thought would follow from that new Measure. The Levy Board was given the responsibility of raising contributions both from bookmakers and from the tote, and it assumed the responsibility of the Racecourse Betting Control Board for deciding how the money should be distributed.
The Racecourse Betting Control Board, having lost this particular responsibility, was replaced by the Horserace Totalisator Board—known as the "tote board"—which remained as a commercial organisation carrying out the business of pool betting on horseracing and making over its surpluses to the Levy Board.
In 1968 there was a further considerable change in the position of the tote. Its position in general began to deteriorate sharply. There were two reasons why that happened. First, there was a big change in the general nature of the betting markets in this country which the tote could not match because of the legal restrictions under which it operated.
Secondly, the wholly unfair amount which the tote had been compelled to provide towards the levy in the early years had left it without any working capital to expand and modernise and make its operations more efficient.
These are the reasons, quite clearly and objectively, for the difficulties now facing the tote. The big change in the nature of betting by the enormous increase in the amount of off-course betting and the decline of racecourse attendances clearly worked against the tote. It was unable to compete in the off-course expanding market because it can offer pool betting only on United Kingdom horse races, whereas its bookmaking competitors can offer a much wider range of attractive possibilities to the punter.
I will give one example of the difficulties facing the tote. When racing in this country is stopped—for example, by bad weather or, at one time, by foot-and-mouth disease—the tote has no alternative, but its overheads continue and its financial losses can be very heavy. However, bookmakers have the facility of providing other business for their customers and do not face the same difficulties. With the shift in emphasis from 701 On-course to off-course betting, the tote was competing with the bookmakers under a severe limitation put upon it by Statute.
There was a drawing down of the tote's resources in the first years of the levy. It is quite frequently said by people: "Look, the tote is not contributing anything to the levy now; the bookmakers are contributing all that goes." But, looking at the history of the matter, we have a very different picture. During the first eight years of the levy, the tote was called upon to make contributions at a rate never less than 1½ per cent. of turnover, and on occasion more than 3 per cent. of turnover. The total sum paid in levy in those years was over £6 million, representing more than 25 per cent. of the total yield of the levy, while the tote's share of the total betting market was only about 3 or 4 per cent. During most of that period the bookmakers were contributing at a rate equivalent to less than ¼ per cent. of turnover. Their contributions never significantly exceeded ½per cent. of turnover. On those figures it is indisputable that the tote was bearing far more than its fair share of the levy. The natural result was that it was denuded of resources and working capital and was unable to make itself more efficient with modern methods and machinery to meet the competition of the bookmakers.
The two reasons why the totalisator, in changing circumstances, has been facing these difficulties are, first, the difficulty of competing with bookmakers because of the restrictions on its activities, and, secondly, the denuding of its capital resources.
The object of the Bill is to put the tote in a position, which I think was always the intention of Parliament, to compete fairly with the bookmakers. I do not think that anyone would regard it as a healthy situation if the bookmakers alone were in possession of the betting market. No country in the world, to my knowledge, accepts such a situation. To be fair, the bookmakers had never asked for it, and they do not ask for it now.
The House knows that under the starting price system, which is complicated and unusual, large amounts of off-course money can be used to manipulate odds on course, thereby prejudicing the position of the punting public. The disappearance 702 of the tote would mean the disappearance of a sustenance to racing and to racehorse breeding which has come from the tote and which is in the general interests of all concerned and should be allowed to continue. Therefore, we believe that the Bill is entirely justified.
I will now deal with particular provisions in the Bill and explain how we intend to carry out the broad principle which I have so far outlined.
§ Mr. Marcus Lipton (Brixton)
Perhaps I might make a brief intervention before the right hon. Gentleman gets to the details of the Bill. Would it not have saved a lot of trouble if, instead of springing the Bill on the public and the House, there had been some preliminary consultation with the bookmaking fraternity?
§ Mr. Maudling
That was not possible with this Bill. It is possible to have preliminary consultations concerning many Bills; but, because of commercial and market factors, we had to produce this Bill without prior consultation. We have had a good deal of consultation since the Bill was produced which has been of value, and I will refer to that consultation later.
Clause 1 widens the range of betting in which the tote can deal. In particular, it allows the tote to deal in fixed odds as well as pool betting and so more nearly compete on equal terms with the bookmakers. A distinction is, however, drawn between the two forms of wager. The tote will be able freely to undertake pool betting on horse racing, whether in this country or overseas, but not on any other event without the express approval of the Home Secretary. I have no intention of allowing the tote to engage in football pools, and any approval that I may give the tote to deal in dog racing will be subject to the exclusive rights in this field of the track occupiers, and so dependent on their authority given on terms acceptable to both parties.
The tote will be permitted to take bets at fixed odds on any sporting event, but still under approval if it wishes to go further than this, for example, taking bets on elections, which are not generally regarded as sporting events. Thus, the tote will be able freely to offer starting prices on horse racing, as the bookmakers 703 do. Where approval is given by the Home Secretary under either limb of these provisions, it will be by Statutory Instrument subject to the negative Resolution procedure.
§ Mr. Angus Maude (Stratford-on-Avon)
A number of people would be grateful for some reassurance from the Home Secretary about this particular point, and I hope that he will do something about it. It would appear that, even with the difficulties he has enumerated, it should, by definition, be virtually impossible to make a loss on pool betting. Can the Home Secretary explain how people who have succeeded in this almost impossible task will make a profit out of S.P. betting, which requires enormous skill and years of experience?
§ Mr. Maudling
It is not as difficult as all that to explain, because in order to conduct pool betting one has to undertake very large overheads in premises, machinery, and so on. If the total market declines, as it has been doing, one finds oneself left with fixed overheads and a declining market, which is the classic situation for getting into financial trouble, however good one's management may be. The on-course market for which the tote primarily catered has been gradually declining compared with the off-course market catered for by bookmakers, which has been expanding.
§ Mr. Maudling
I hear many criticisms of television, and one is safer not to accept them.
The remaining provisions of Clause 1 are mainly consequential, but subsection (4) is important because the field of starting prices and fixed odds betting will be new to the tote. It may well wish, until it has experience, to enter into agency arrangements with a firm or firms of bookmakers for the management of its off-course cash business. This provision will enable the tote board so to operate if it thinks it wise or prudent to do so.
Clause 2 will permit the Home Secretary to enlarge and strengthen the membership of the board, which is at present restricted by Statute to a chairman and three members. I attach great importance 704 to the membership of the board. I am sure it will be very valuable to take the opportunity of having more members on the board. The present members have worked very hard and conscientiously in a very difficult situation. But a wider board, bringing in different ranges of experience, will be valuable. It is, clearly, impossible for me to approach people to join the board until we know what the board will do. Therefore, it was not possible, before introducing the Bill, to go ahead with the adding to the board of new people with different experience. That is the purpose of Clause 2, which is an important Clause.
Clause 3 is the one on which most criticism has been centred, for reasons which I shall explain. Perhaps I could tell the House the reason behind the Clause. It is no good extending the powers of the tote to enable it to compete in the off-course market unless it has sufficient facilities through which to do so. The statutory test of demand for the opening of new offices has by now created a fairly tightly-held situation for the established bookmakers. The tote would find it exceedingly difficult, particularly without the capital, which it does not possess, and exceedingly expensive to buy its way at artificial prices into this very tightly-held market. Some way must be found of enabling the tote to compete with the bookmakers. If the purpose of the Bill is that the tote should offer alternative offices, it must be in a financial position to do so.
The method adopted in the Clause as it stands is to exempt the total from the need to satisfy the demand requirements but to require it to obtain certificates of consent from the independent members of the Levy Board, to be issued in accordance with provisions approved by the Home Secretary. This was designed to give the tote an entry but on a scale which could be carefully controlled.
My intention was to permit the tote eventually to open, say, a few hundred offices over a period of years on a scale equivalent to a present-day single large bookmaking chain. This would put it in a proper competitive position without causing any basically undesirable increase in the number of offices as a whole. That is a view shared by many people interested in this matter, particularly by the 705 Churches' Committee on Gambling Legislation. I can well understand the objections that have been raised to the Clause in its present form. It is true that displacing a part of the jurisdiction of the justices in respect of the tote alone will make it difficult for the justices to administer the demand provisions in a consistent and sensible way while dealing with bookmakers' applications. On the face of it, the Clause may appear to deprive the public of legitimate rights of objection where the tote is concerned. The public would still be able to object to the sites of the offices, which is the issue which normally concerns them.
I see the force in the objections made to me, and I therefore propose in Committee to make Amendments to the Clause to restore the jurisdiction of the justices, at the same time asking them to exercise this in such a way as to ensure that a proper choice is given to the public in their areas to deal either with the tote office or offices of private bookmakers. I think that this is in keeping with the spirit of the objections made to me. I do not want to give the tote freedom to establish itself in areas where there is at present no betting, but I want to give it the freedom to compete with the bookmakers in areas where there is betting. Other considerations apart, I believe that this should be very much in the interests of the consumer, because it will provide him with a wider choice, which he ought to receive, and the tote will remain, after the Amendments which I have in mind, under the control of the justices.
§ Mr. Thomas Cox (Wandsworth, Central)
I have listened with interest to the right hon. Gentleman's point about justices, but surely local authorities must be brought into this matter. There is continuous criticism by local authorities of their diminishing power on this issue. I am sure that the right hon. Gentleman is aware, as hon. Members on both sides of the House are aware, of the continual complaints from local authorities and residents about the ever-increasing growth of betting shops over which they have no control whatever.
§ Mr. Maudling
There has been misunderstanding about this. Even as originally drafted, the Bill would not affect in any way the power of local authorities. There is no departure from 706 planning provisions, which are not affected. It was the justices' decision on the matter of demand that was affected.
§ Mr. Merlyn Rees (Leeds, South)
We are at some disadvantage here in that the Clause worries many hon. Members and normally we should have a period of time to look at it. How will the licensing magistrates be able to work in areas where already there are a large number of betting shops when they have to take into account the place of the Totalisator Board?
§ Mr. Maudling
They will have to weigh up this difficulty. If the tote is to be kept in being—as generally people say it should be—it must be able to offer facilities. Those are the two conflicting considerations. It is right, as has been represented to me, that it must be for the justices to decide what is right for a particular local situation. In other words, they must consider not only local demand but also, and rightly, the desirability of more choice for the betting public.
§ Mr. Arthur Lewis
The right hon. Gentleman has said that the tote board is short of capital and therefore cannot go into the market and buy up the most lucrative shops. But did it not come to an arrangement to take over City Tote? No one knows how much it paid or where it got the money from. Sixty shops were concerned, some of them in the most lucrative areas. Why was not this sale thrown open to tender?
§ Mr. Maudling
The right hon. Gentleman is wrong in his recollection of the details of that particular transaction. As I was explaining, because the tote has paid far more than its fair share in the past to the Levy Board, it has not at present got the working capital which it would need to expand in the open market. That is the simple fact of life. It is right to change the Bill on those lines to meet a reasonable objection, trying to reconcile the need for local control over the totality of facilities and the desire for some competition.
Since the Bill was introduced the bookmakers have offered to discuss with the tote arrangements by which the jackpot and perhaps some others of the tote's pools will be promoted in the bookmakers' offices generally under terms to be agreed. I shall watch the progress 707 of those discussions with great interest. Provisions on the lines of the Clause as I propose to amend it will still be needed to underpin any arrangements between the bookmakers and the tote. The tote must be in a position to make a deal that will give an effective choice to the punter and will with confidence endure into the future. I do not think that without the provisions of the Bill the tote would be in a position to make a deal which would be properly worked out and of general benefit all round. I want commercial freedom to the tote to provide on fair, competitive terms an alternative for the punter. I do not think that it can do that until it has the powers given it under the Bill, without which it is in a totally impossible negotiating position.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
My right hon. Friend talks of competition; but the tote engages in pool betting. This will be first time in world history that a tote in this or any other country will have become a bookmaker. Why cannot it compete in the business of pool betting by being given the outlets it requires for pool betting to compete against the bookmakers as bookmakers? Has that possibility received any consideration in the Home Office?
§ Mr. Maudling
Yes, certainly. That is one of the things that may develop under the Bill. Once the tote has the powers under the Bill it will be able to come to commercial arrangements of that kind.
I hope to see the new and extended Totalisator Board develop its operations in such a way as to do what suits it best while the bookmakers do what suits them best and the public have a genuine choice. I do not believe that can be done other than by proper commercial arrangements reached under the powers accorded to the tote by the Bill.
Clause 4 deals with a rather different matter. It transfers from the Totalisator Board to the Levy Board the duty of issuing certificates of approval to horse racecourses. This duty was originally imposed on the Betting Control Board in 1928. It was designed to ensure that racing was properly conducted at courses where the tote was to operate and at which bookmakers were to be exempt from the restrictions of the Betting Act, 1853. The approval and the certificate 708 are for the control of betting only. Transfer of the power to the Levy Board does not extend its scope in any way. It seems more appropriate that the Levy Board, not directly involved in betting, with a broad base, including three members of the Jockey Club, should undertake this task rather than the Totalisator Board, which is an interested party. Both boards have for some time asked for this change, and the Bill provides a suitable opportunity to make it.
I come to Clause 5, the other Clause that has been the subject of a good deal of attack. It empowers the Levy Board to assist the tote by grants, loans, guarantees or otherwise. The object is simply to enable the tote to equip itself with some of the working capital it does not possess, taken away from it by reason of the subventions to the Levy Board, working capital which it must have if it is to be properly competitive in the future. It is not intended in any sense to make the tote a perpetual pensioner of the levy. We want to see it back in a position where it is making big contributions to the levy.
One of the great purposes of maintaining a tote is to see in this country as in others an organisation putting up a lot of money for the benefit of racing and the race-going public. Considering the disproportionate financial burdens the tote had to carry in the past and the uneconomic services it still provides for the benefit of racecourses, which can be a proper charge on the levy, I do not see anything extraordinary or inequitable in the provision of the Clause. It would be entirely for the Levy Board to decide how much assistance should be given, consistent with its wider responsibilities.
At the same time, I appreciate the arguments that the Clause goes too far, especially in the matter of grants. I am prepared to consider this point, which should be thrashed out, because there are arguments on both sides. I am willing to consider in Committee whether the drafting could be improved, so long as we in no way undermine my basic purpose of ensuring to the tote the opportunity to maintain itself in a competitive position with the bookmakers.
Clause 6 enables any functions of the three Government-appointed members of the Levy Board to be performed by any 709 two, obviously to help with possible administrative problems.
I should like to recapitulate briefly the principles of the Bill. It is not a matter of State enterprise versus private enterprise. The tote is a mutual organisation established in 1928. No Government money goes into it, and no Government money comes out of it. It is sustained by its operations in the betting industry. The money it makes has been available, and I hope will continue to be, for the benefit of racing and the racing public as a whole.
Secondly, the tote has suffered from statutory inhibitions on its ability to compete. There was a heavy drain on its resources in the early years of the levy. It must be enabled to complete on more equitable terms. There is universal agreement, so far as I know, that it is desirable to keep the totalisator in being and give it a chance to maintain itself in a competitive position. Therefore, it is right for Parliament so to amend the law as to Rive the tote board more facilities and opportunities and allow it to maintain itself in a competitive position, offering a choice to the betting public as a whole and also offering assistance to British horse racing and horserace betting, which the whole House will regard as desirable.
§ Mr. Deputy Speaker (Mr. E. L. Mallalieu)
Perhaps it would be convenient at this moment to say that the Amendment in the name of the hon. Member for West Ham, North (Mr. Arthur Lewis)That the Bill be read a second time upon this day six months.has not been selected, but, of course, he can achieve his object by voting against the Second Reading.
§ 4.57 p.m.
§ Mr. Merlyn Rees (Leeds, South)
There is nothing like office to concentrate the mind of political parties. Today we see the Government, which said at the General Election that they would cut back on public ownership, which the electorate took to mean everything, and which were also going to hive off many things, giving extended powers to part of what the Treasury defines as the public sector, even though I should like to put those words in inverted commas. Without 710 looking at the accounts, one would have known straight away that it was losing money.
Before we consider the Clauses of the Bill, it is important to examine the curious animal to which we are being asked to give extended powers. The national accounts as set out by the Statistical Office, which is part of the Treasury, show that it is not a public corporation. It is not in that wide range of about 30 organisations stretching from B.E.A. through to the Covent Garden Market Authority. It is certainly not a nationalised industry. For reasons the Home Secretary has explained, I cannot find it among grant-aided bodies, and I cannot find it in the private or company sector.
I then looked at the Special Report from the Select Committee on Nationalised Industries on its order of reference in 1968, when it tried to discover what sort of body the Horserace Totalisator Board is. From paragraph 115 we see that it is not a nationalised industry. After its discussions with the Home Office and so on, the Select Committee recommended that an inquiry into this body… could most appropriately be carried out by the Nationalised Industries Committee".Yet the Home Secretary says that it is nothing to do with the public sector.
Public accountability is vital here. May we be told how we can make the board accountable to the House, bearing in mind that the Select Committee three years ago recommended that it should be so accountable through that Committee?
What is certain is that it is not public ownership in the sense in which we use the expression in this House, even if at the time of a General Election it becomes rather broader in meaning. But it is part of a huge State bureaucracy, and although we on this side of the House agree with the Home Secretary that there is a place for a totalisator board along the lines of the organisation set up originally by a Private Member's Bill in 1928 and, for that reason, we shall not oppose the Bill's Second Reading, that does not mean that we do not have grave doubts about important parts. of the Bill. We shall try to improve' the Bill in Committee. That will be the tone of our discussion.
711 Before considering the Clauses, it is important to look again at the nature of this organisation. On page 49 of the Report of the Select Committee on Nationalised Industries one reads under the heading, "Horse Race Totalisator Board":The Board has the power to approve places as horse racecourses and operates totalisators.Under the heading, "Appointments to Governing Board", one readsThe Home Secretary appoints the Chairman and the three other members of the Board.Under the heading, "Finance", one reads:The Board's activities are financed from the proceeds of the totalisator.Finally, under the heading, "Nature of Policy Control", on reads:The Home Secretary has no control (other than the appointment of the Chairman and members) over the Board's policies and activities.In spite of that, we are asked to give the board extended powers.
We on this side of the House are in favour of public ownership of a variety of different kinds. But we are very wary of State bureaucracy and of giving organisations powers for which there is no responsibility to the Minister or to this House. Surely there ought to be some responsibility. I hope that we shall be told how this works. The Select Committee's Report says that the Home Secretary has no control over the board's policies and activities. If that is so, what does the Home Office do in this sense inside the Department?
As for parliamentary accountability, paragraph 113 of the Select Committee's Report says:The Treasury indicated in evidence that Ministers had no strong views on whether or not the Board should be included in their Order of reference, and the Home Office confirmed in a letter that there was no objection to the Board's inclusion.What has happened since then? If the Home Secretary has no control over the activities of the Totalisator Board, what can the Select Committee on Nationalised Industries investigate?
Paragraph 114 of the Select Committee's Report says:Your Committee welcome the co-operative attitude of the Home Office. The Board's Accounts are in fact published and laid before 712 the House, but as they are not audited by the Comptroller and Auditor General, they may be regarded as outside the traditional field of the Committee of Public Accounts. Nevertheless the Board appears to have a statutory monopoly and a substantial income arising from it, as well as a large number of customers among the general public who are entitled to be satisfied—so far as a Parliamentary Committee can satisfy them—that the Board's affairs are managed in accordance with the general interest.Where does accountability to this House lie in an organisation for which the Home Secretary has no control, bearing mind that the Select Committee on Nationalised Industries recommended that the body, which is not a nationalised industry, nevertheless should be included in its order of reference? Has that been done? Before we give these extended powers, it is very important that we know.
Here is a monopolistic type of organisation set up by a Private Member's Bill. The Home Secretary has explained the nature of its revenue. Nevertheless, the Select Committee on Nationalised Indusstries in 1968 wanted it included in its order of reference. The situation becomes more confusing as one goes on. Irrespective of the Select Committee's approach and the fact that the board's accounts are not looked at by the Comptroller and Auditor General, how can we comes more confusing as one goes on. Do we have the right to debate its annual report in the House?
§ Mr. Arthur Lewis
My hon. Friend will recall that I asked the Home Secretary about City Tote being taken over. The Home Secretary could give me no information about it. Indeed, when I wrote to the chairman of the board about it, he refused me any information. No one knows that is happening and, even when one goes to the board, one is declined any information.
§ Mr. Maudling
The unique character of this organisation, of course, is that no taxpayers' money goes into it.
§ Mr. Rees
I accept that. However, what confuses the position even more is that the Select Committee on Nationalised Industries wanted it included in its order of reference.
The board is not the only organisation of this kind. Outside the nationalized 713 industries, large numbers of State organisations have proliferated over the years. I sometimes wonder whether Government Departments even know that they have them. What is more, it happens under all Administrations. So we are not too clear about their functions and their responsibility to this House.
I notice in the Ninth Report of the Horserace Betting Levy Board a reference to subsidiary companies. This monopolistic type organisation, which is not a nationalised industry, which is not a public corporation and which does not give money to the State or get money from it, also has subsidiary companies in Scotland, Wales, London and other parts of the country. It has Tote Investors Limited, and one called Tote Offices (Holdings) Ltd. They are owned by the Totalisator Board. Again in terms of accountablity to the Home Office or to this House, here are companies registered under the Companies Act, 1948, which are privately owned, but all the shares of which come under the board. What control do we have over these private companies? Are we allowed to ask questions about them in the House? When we hear about other methods of associating with private companies, to which the right hon. Gentleman referred when he was discussing Clause 3, it is most important that we know.
I tried to discover from this report what licensed offices had been disposed of—I think to Mr. Maxwell Joseph. A number of licensed offices were disposed of by the board to a private body. We are being asked to give the board extended powers. At the same time, because of the Totalisator Board's activities, we shall give these powers to a private body with which the board has an agreement about the disposal of licensed offices. I do not know whether that means disposed of completely, but is it not a little odd that under this Bill the board should be asking for the power to have more shops in different parts of the country having recently disposed of a number?
The right hon. Gentleman talked about the tote coming to some arrangement with private enterprise. This has not been spelt out. I have been looking at this as it applies to the nationalised industries. When in 1966 or thereabouts 714 the National Coal Board wanted to diversify its activities there had to be an Act of Parliament. This restricted the rights of that nationalised industry. With this organisation to which we are giving monopolistic powers and over which the Home Secretary has no control there is no such limiting control while the nationalised industries are responsible to this House and to the Select Committee on Nationalised Industries. There are a number of organisations which have cropped up over the years classified in some loose way as "in the public sector".
It is important to be clear what we are doing here. If it is to be thought good enough to limit the activities of the nationalised industries, that group of 17 bodies within a wider group of 30 public corporations, then we ought to be sure that there is control in the Home Office here.
I will deal later with the rôle of the appointed members of the board because it may be that this is the means by which there will be control.
§ Mr. Antony Buck (Colchester)
Has the hon. Gentleman thought about the provisions of Section 31 of the Betting, Gaming and Lotteries Act, 1963, which provides for the board to prepare proper accounts and present them to the Secretary of State, who has to lay them before Parliament? There is some degree of control afforded in that way.
§ Mr. Rees
I cannot say that I have read that. To some degree my question has been answered but not completely. It is important that we should know where in the course of the next year ought we to look to find the report.
I turn now to Clause 1. The right hon. Gentleman has explained points which interested a number of us about greyhound racing, football and the General Election. He talked about a Statutory Instrument in connection with this form of betting. Would it not be more appropriate to have it in the original Bill? If it is thought appropriate to mention these in the Bill, why put the limiting factors in a Statutory Instrument? There are more technical aspects of horse racing and gambling arising from Clause 1, and this is not something about which I know very much. My hon. Friend the Member for 715 Accrington (Mr. Arthur Davidson), making his first appearance at the Front Bench, will deal with these and other matters.
I come now to Clauses 2 and 6 dealing with members. The Select Committee pointed out that there was no control by the Home Secretary other than through the appointment of chairman and members. When the State decided, to some degree before 1945, to set up a public co-operative form of organisation it looked very carefully at the question of the appointment of members. The State said that in carrying out the duties laid upon him a Minister was required to appoint persons embracing a wide range of experience and expertise. The usual type of provision requires that the persons appointed by the Minister shall have qualifications or experience in commercial and industrial matters, in finance, labour relations, applied science and administration, and in a few cases there are requirements about legal knowledge or knowledge of the affairs of particular industries.
I have admitted my lack of knowledge on betting and gambling generally, not I hope in any way pompously, but there are many things about which we know little. If the House has thought it right to lay down certain criteria dealing with the qualifications of persons appointed to nationalised industries, should we not be even more explicit in appointing persons to this board dealing with something so esoteric and requiring certain specialised knowledge, which in my case at least, one cannot pick up from reading books?
When the International Monetary Fund was set up in 1944 Lord Keynes said he hoped that it would be run by a gang of adventurers. That did not come off.
§ Mr. Rees
I doubt whether that could have been nut in international language. We need on this sort of board the type of person who knows a good deal about horse racing and gambling generally. When members of the gambling industry have talked with me I must admit that I did not know a great deal about pools and yankees and that sort of thing. Members 716 of such a board must know about these things before they come to the job.
The Home Secretary has said that he proposes to make changes in Committee to Clause 3. Recently, quite unconnected with this Bill, a friend of mind, commenting on the fact that a licensing authority had given permission for another two betting shops in a part of my constituency, asked "Haven't we got enough betting shops in the street already?"
The wording of paragraph 19(b)(ii) of Schedule 1 in the 1963 Act is referred to in Clause 3 and I understood the Home Secretary to say that there is no intention of amending this part of the Act. It says that the application may be refused on the groundthat the grant or renewal would be inexpedient having regard to the demand for the time being in the locality for the facilities afforded by licensed betting offices and to the number of such offices for the time being available to meet that demand".How will that work in this part of my constituency? How will the licensing authorities decide this? When I asked the Treasury to set up a Stationery Office in Leeds it talked about the demand in that area, and I notice from the OFFICIAL REPORT that it has made the same comment about Newcastle. One assumes that this assessment has been made in Leeds; but how will the tote get in if this provision is still the criterion?
§ Mr. Rees-Davies
Does the hon. Gentleman know whether Leeds has yet said that it is full up—that is to say, that the demand is completely satisfied? In most of the country the local justices have said where demand is now satisfied. Where this has happened, often with the support of the local authority, there can be nothing further. The hon. Gentleman can take it, subject to any correction by the Home Secretary, that in these areas the only opportunity that the tote would have at fixed odds would be to buy in.
§ Mr. Rees
This is the point which is causing concern, and I should be grateful if it could be explained.
It is sensible to remove grant and leave only loan and guarantee, but this does not remove the basic problem for the tote. It cannot get grants from the Levy Board, but it can get money in other ways. This problem faced the previous 717 Government as well. It is not so much a question of getting money from the Levy Board—that will have to be tightened up—as of whether the basis of the tote's finances will be settled simply by loan guarantee. We shall want to consider this in Committee.
The Government have, obviously, and correctly, bent to pressure. Will this change mean the liability of the tote?
§ The Under-Secretary of State for the Home Department (Mr. Mark Carlisle)
The hon. Gentleman will surely appreciate that whatever one does under Clause 5 in no way affects the power of the Totalisator Board to go to the ordinary market to obtain money.
§ Mr. Rees
I am grateful. That was my point. I do not think that it will do very well going to the money market, given its present situation, but I wish it luck.
I counsel care here. Our debates going back to 1963 show that, although this House can often be wrong, it is more often than not wrong in changes to the gambling laws. No party is more wrong than another. We all do pretty badly at it. The tote has been in trouble for some time, and I am not convinced that this will not happen again. Can the tote deal with off-course betting?
We shall co-operate, but we shall be extremely critical of having a State bureaucratic organisation to do this. It is not on to say, "Public ownership," to us and expect automatic obeseisance. We want public ownership to be efficient, but we want it to be socially responsible and responsible to Parliament. We want to be sure that under this set-up these boards will have clear lines of communication to the Home Office. We think that there should be a tote, but we are not convinced that we are getting it in the right way. This will be our approach in Committee.
§ 5.26 p.m.
§ Sir Stephen McAdden (Southend, East)
I am sure that it is the wish of most hon. Members that the Totalisator Board should continue, but it might be as well to remind ourselves that its purpose in life is to conduct pool betting on horse racing. So long as it does that, I wish it the very best of luck. The operation of pool betting should be, as my hon. Friend the Member for Stratfordon-Avon 718 (Mr. Maude) shrewdly pointed out, a fairly rewarding business. It should be almost impossible not to have financial success. Yet the board has succeeded in doing just that and we have had to come to its aid; this Bill is one way of doing so.
The board was set up to organise a different form of betting on horse racing to the bookmakers' odds. Because of the mystic aura around horse racing, these operations were exempted from the pool betting duty of 33⅓ per cent. Clause I says that the board, which has had these powers and rights for so long, shall now be able to carry on pool betting business in any form on any horse race andon any other event approved by the Secretary of State for the purposes of this paragraph".The Secretary of State said that he would not allow it to go into football pool betting. I understand why—because the State is the biggest gainer, since it has a 33⅓ per cent. stake in every pound bet. But, although the present Secretary of State would not approve it, we do not know what some other Secretary of State might do. I have questioned the members of the Tote Board, who assure me that they would be quite happy with subparagraph (i), which would confine their activities to their original purpose, and that they do not need subparagraph (ii). I ask my right hon. Friend to look into this again. If the tote board does not want it and he wants to restrain its activities, I suggest that subparagraph (ii) should be omitted.
I was rather worried when I heard the Home Secretary say that, in addition to organising pool betting on horse racing, the Totalisator Board might be able to do something about greyhound racing. If so, where will the profits go—back into horse racing or greyhound racing? If the board is to collar the profits from bets on greyhound racing, it will be robbing Lazarus to pay Dives, and such an extension should be looked at extremely carefully.
I am anxious that the tote should succeed in the sphere in which it is supposed to operate. With the assistance of its competitors, the bookmakers, it can succeed, but only as long as it does not compete in their spheres. With their assistance it might be possible for it to operate various forms of betting—jackpot 719 betting and so on—through the existing betting shops, of which we are told we have too many. In any event, they are established. With the co-operation of the bookmakers, pool betting could be expanded, but only if proper arrangements are made.
Co-operation to secure an expansion of pool betting will not occur if those to whom one looks for assistance are the very people against whom one intends to act. Why should they co-operate if they are likely to be knocked out of business in fixed-odds betting? I hope that my right hon. Friend will look at this part of the Bill again. I know that he has taken several looks at the Measure, but it seems that he will have to take several more before it has completed its progress through Parliament because as drafted it is designed to secure the greatest amount of opposition.
I am glad that the Minister has given way on some points of importance. I trust that he will go further. It is unreasonable and unrealistic to say that this board, which was set up to organise pool betting on horse racing, should be given unlimited powers, including power to enter a sphere of betting to which it was originally designed to provide an alternative.
It is obvious that the Committee stage of this Measure will be interesting. I regret that for the first time in 22 years I shall not be able to serve in Committee on a Bill of this kind. I also apologise for having to leave the Chamber without waiting to hear the speeches of other hon. Members. I am required to take the Chair in Committee upstairs.
§ 5.33 p.m.
§ Mr. Albert Roberts (Normanton)
Although I do not rise to support the bookmaking element, I agreed with the observations of the hon. Member for Southend, East (Sir S. McAdden) and particularly with the speech of my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees).
Trends change and people want to spend their money in different ways. For example, in 1948, there were 25 million attendances at greyhound meetings. By 1970–71 the figure had dropped to 7 million.
720 What particularly amazes me about the Bill is the fact that it seems to have been built totally around the horse-racing industry. This is a mistake. I have no pecuniary interest in either horse racing or greyhound racing—or, for that matter, any other sport—but it is clear that more consideration should have been given to the drafting of the Bill to ensure that it had a more general application.
The Measure does not give enough protection to the other sports on which the Totalisator Board is to be able to bet. Clause 1 states that the board will be able to bet at starting prices, and it must be recognised that greyhound racing will be used by the board as a betting medium.
Greyhound racing is, after all, one of the largest spectator sports in the country. From time to time it has received some vicious treatment from the State. One recalls the vicious 10 per cent. tax which was imposed on the industry. Greyhound racing today represents one of the best and cleanest sporting attractions, and in London and provincial towns it is very well conducted. However, we constantly seem to have a cushioning of the horse-racing industry.
The Home Secretary said that the board would give consideration to greyhound racing. It should be borne in mind that, whereas last year about £220 million of horse-racing money went to the tote, about £250 million from greyhound racing went to that source, and that is quite a total.
No provision has been made in the Bill for the Totalisator Board to make proper commercial arrangements with greyhound racing or any sport on which it will bet, and I consider this to be inequitable. We should adopt a sense of fairness in this as in all other matters.
It will be said that the Totalisator Board will be placed in the same position as bookmakers; but this is a weak argument because the Totalisator Board is a State body, and it is for the State—for us in Parliament—to ensure that other sports are not discriminated against. It is our job to do that. We are here not to favour horse racing or any one sport but to treat each sport fairly.
If the board is to be allowed to bet on greyhound racing without any compensating payment, the profit so made 721 could be used exclusively for horse racing. It may not be widely known that greyhound racing does not receive any benefit from the Levy Board or, indeed, any payment from off-course bookmakers.
Over the years some of us have had to fight for Parliament to recognise these facts. I recall one previous Home Secretary saying that if his family were in mortal danger, he would save his wife first and his horse next. I recall replying that, in that position, I would save my dog. It seems that sympathy always goes to the horse-racing industry.
Greyhound racing has suffered from the effects of betting shops and since 1961 attendances have fallen by over 40 per cent. I appreciate that trends and pursuits change, but if this form of sport and entertainment is being provided—in my view it is a sporting attraction which is reasonably wholesome—it should not be discriminated against but helped; that is, provided it gives the pleasure people wish to have.
Greyhound racing has suffered from special taxation by the Treasury in that it has been taxed continuously since 1948, whereas horse racing has been subject to the betting duty only since 1966. I mention these facts simply to illustrate that the Government must be fair to all forms of sport and not just to horse racing. The Bill could have done much to encourage other sporting events, to some of which the Home Secretary referred.
I hope that the Totalisator Board succeeds, but not at the expense of any one sport, including bowls, athletics and greyhound racing. I therefore appeal to the Home Secretary to examine before the Committee stage the likely effects of these proposals on other sporting attractions on which there is likely to be some betting. I hope that the Home Secretary will bear this in mind because we are anxious that something should be done on these lines. If this arrangement could be made, it would be of great assistance to greyhound racing and it would ensure that the monopoly which has been granted by Parliament to off-course bookmakers would be at least eased to a limited extent while not increasing the overall amount that is spent on betting.
§ 5.40 p.m.
Major-General Jack d'Avigdor-Gold-smid (Lichfield and Tamworth)
I support this Bill, as amended by the Home Secretary, but I confess to certain vested interests. I own very few, not very fast racehorses, and I act as an official, a steward, at certain meetings.
The hon. Member for West Ham, North (Mr. Arthur Lewis) said earlier this afternoon that racing is not of great interest to a large number of hon. Members. This is understood and appreciated, but racing is of interest to a large percentage of the British public. They are interested perhaps not so much in the racing element as in the betting which goes with it. I also realise that in many parts of the country betting is not regarded as very desirable. Nevertheless, it has been accepted since the Betting, Gaming and Lotteries Act, 1963. I want to fill in some gaps and to say why I think that for the good of racing a viable tote which can compete on level terms with bookmakers is essential.
As the Home Secretary said, the tote was formed in 1928 with two aims: to provide alternative betting for the public and money for racing. This it has continued to do and, although it has been in slight financial difficulties and has not paid the levy for the last few years, the tote is in operation today and carries on its work. The Home Secretary gave clear reasons why financial difficulties have been experienced. These were chiefly due to not being able to compete with bookmakers in the profitable form of betting which is off-course cash betting at starting-price odds, but in addition there are about five other reasons. The totalisator has personnel problems. It has a regular staff of 560, and a total staff of about 3,600 who are not permanently employed. As will be appreciated, the number of meetings varies from time to time. There are more at weekends and in holiday periods, than mid week. The totalisator supplies betting facilities in all the enclosures of the 63 racecourses.
As the Home Secretary pointed out, the tote is very much dependent on weather conditions. Fog, frost, excessive wet or snow may make it necessary to cancel a meeting. Also, as the Home Secretary said, an epidemic of foot-and-mouth 723 disease can put it out of business for a time. It is subjected to heavy costs of buildings. Incidentally, the personnel have to pay admission charges and, at present, S.E.T. Over all that there are expenses concerned with communications which are necessary from the course to the office used in connection with calculating pool dividends.
§ Mr. Arthur Lewis
I accept everything that the hon. and gallant Member said about horse racing and the difficulties of the tote, but is not the position exactly the same over greyhound racing, except that instead of foot-and-mouth disease there are canine diseases? Yet with all the difficulties which the hon. and gallant Member has mentioned, horse-racing is a flourishing concern, yet the Government do not come forward to help in that respect.
Major-General d'Avigdor Goldsmid
If the hon. Member will allow me, I will try to explain the reasons. In comparison with the bookmakers, the tote is under a great handicap. Bookmakers' on-course expenses are minimal compared with those of the totalisator, and off-course they have the facility of betting on meetings abroad when there is no racing in this country. In addition, there is betting on almost everything from a Miss World competition to a General Election and bookmakers can operate profitable ante-post markets on all the principal races in the calendar which are denied to the tote.
One may ask, why under these conditions is a totalisator required? The reason is that the totalisator was set up to provide an alternative means of betting. People who go racing do not always want to face the hustle and bustle in the ring and prefer to make wagers more peacefully. Some want to make only small bets which certain bookmakers would not accept. The tote also offers doubles, trebles, jackpot and forecast betting which are attractive because for a relatively small stake one may win a lot of money. The tote has provided £15 million for racing since its inception and in the latter years it has provided £6 million for the Betting Levy Board.
§ Mr. S. Clinton Davis (Hackney, Central)
I am not nearly so knowledgable as the hon. and gallant Member 724 about these things, but I wonder whether the enhanced prospects of the Totalisator Board would bring any direct or indirect rewards to horse race owners.
Major-General d'Avigdor Goldsmid
Yes, they would. I am coming to that point. The tote pays the 5 per cent. betting tax which is paid by bookmakers and which, I wish to make quite clear, does not go to racing but to the Chancellor of the Exchequer. In answer to the question what advantage there is here, the amount of money collected since the Board's inception has been …15 million, which has gone to improvements in race courses. We can think of Ascot, Newmarket, Doncaster and present large operations being undertaken at Sandown. The money has also gone to increase prize money, which in this country is well below prize money paid in France and America. It has also helped to pay for race-course technical services which are essential for the smooth conduct of racing—the camera patrol, photo-finish and race-timing apparatus, the commentary, and starting stalls and handlers. In addition, they have contributed to thoroughbred breeding and in the advancement of veterinary science.
In 1967 the Benson Committee was set up to study the whole racing industry. It produced a Report in 1968 which was very far-reaching and covered all facets of the industry. It said this about the tote:The totalisator should pursue a vigorous policy of expansion and development in order to secure a greater proportion of the betting turnover.As will be realised, the volume of on-course betting is minimal in comparison with off-course betting. Competition between the totalisator and bookmakers is healthy. The reverse is true—it would be unhealthy for all betting to be in the hands of bookmakers. Therefore, in my humble view the totalisator should be allowed to expand and to compete on level terms with bookmakers. For the good of racing, I support this Bill.
§ 5.50 p.m.
§ Mr. Hugh Delargy (Thurrock)
This is a miserable Bill. This debate is not only a miserable but a disgraceful occasion. Have we nothing better to do than this? Have we nothing more important to talk about than this? Who wants this thing? What is it supposed to do? 725 Above all, why should it be introduced at this moment'? Has the Home Secretary nothing better to do than this? These are the only points to which I want to draw the attention of the House. [Interruption.] What does the Under-Secretary of State say? Let him stand up if he wants to interrupt. He should not natter from a sedentary position. I will not have it. But we are accustomed to bad manners from the Government Front Bench.
I have never been to a race meeting in my life. I have never even visited a race course. I have never been inside a betting shop. I have nothing against these activities and I am not setting any high, ethical and moral tone about them. I understand that they give a lot of innocent pleasure to many people, including the bookmakers. I mention this inexperience and ignorance of mine in order to emphasise that about this Bill I can take a quite impersonal and dispassionate view. But I can say this: no matter what the experts may say for or against the Bill—and I understand that there is expert opinion on both sides—I cannot understand why it has been introduced at this moment.
§ Mr. Rees-Davies
I think it fair to say to the hon. Gentleman that none of us would ever regard him as a spoilsport. I merely make two points to him. The Bill is being introduced now because the right hon. Member for Cardiff, South-East (Mr. Callaghan) when he was Home Secretary could and should have introduced the Bill when he was given the answers to the situation in 1968. He did nothing about it for nearly two years. That is why it should be introduced now. Secondly, although the hon. Gentleman has never been to a race course, I point out to him that over £1,000 million of the people's money is spent on horse-racing throughout the country. Almost a majority of our people place daily bets. We are dealing, therefore, with a pleasure which is as great to them as football is to others.
§ Mr. Delargy
I thank the hon. Gentleman for that intervention. But I am no more responsible for the actions of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) as Home Secretary than I am for the actions of the present Home Secretary. I am not, 726 as the hon. Gentleman says, a spoilsport, but I hope to point out why the House might be concerned at the moment with other matters more urgent than this Bill.
No doubt the Bill will be sent upstairs to a Standing Committee. Next Wednesday afternoon in Room 13, the Committee of Selection will assemble to name those hon. Members who are to serve on that Standing Committee—still another Standing Committee. The Committee of Selection now meets every week to appoint Standing Committees. At the moment, about a dozen Standing Committees are sitting, occupying the time of more than 200 back bench Members. We are running out of manpower and it is high time the Leader of the House addressed himself to this problem.
How are we to find hon. Members to sit on all these Committees? Some of the Committees sit twice a week and others three times. At least one is now sitting all through the night. We have the spectacle of hon. Members sitting on a Committee in Westminster Hall and rushing over here to vote in another Committee of whose proceedings they have heard nothing. Now we are to set up yet another Committee.
One could understand it if there were some urgency for the Bill. One could understand it if it had been mentioned in the Conservative Election Manifesto or in the Queen's Speech. The Bill was published only a few days after the Queen's Speech but no mention of it had been made in the Queen's Speech. That is one reason why the Bill should not have been presented. The working of the House, its apparatus, is grinding to a standstill because there are far too many Committees. Yet the Home Secretary asks us to set up another Committee.
My second criticism concerns the Home Secretary himself. Has he nothing better to do? I was surprised that he himself came here to speak for about 35 minutes on horse racing. Two night ago, he spoke for eight minutes about the massacre in Derry, most of that time trying to score points off my right hon. Friend the Leader of the Opposition. Thirty-odd minutes on—what is this thing called?—the Horse Race Totalisator and Betting Levy Boards Bill, and eight minutes on the agony and the sorrow and the pity of Ulster. These are the priorities of this lot.
727 This is why I said in my quiet way that this is a rather disgraceful occasion. The moment I have finished, for the first time in my life after speaking, I am going to leave the Chamber. But I will come back to listen to the winding-up speeches—I will keep my eye on them.
Another strange thing came out in the Home Secretary's speech. He spoke about Amendments to Clauses 3 and 5. Clause 3 is one of the most extraordinary things that I have ever read. Listen to it. The explanatory memorandum says:Clause 3 provides that an application by the Totalisator Board for a betting office licence may not be refused by the licensing authority …
§ Mr. Delargy
This is the world of George Orwell the great" double-think". This is 1984.… an application … may not be refused by the licensing authority …Now the Home Secretary says that he is going to amend Clause 3.
The right hon. Gentleman also says that he is going to amend Clause 5, which is also strangely worded. The explanatory memorandum says:Clause 5 enables the Levy Board to give financial support to the Totalisator Beard.It damned well obliges the Levy Board to do so. I do not know, Mr. Deputy Speaker, whether you have ever been asked to vote for a Bill having been warned in advance that you are going to support something which is to be changed. I do not think that this has ever happened before. So I am to vote for something for what the Home Secretary does not want me to vote.
I have said that this is a crazy Bill, that this is a bad occasion. This is a kind of "Alice in Wonderland" Bill. I hope that when we get it upstairs in Committee—and I intend to go on the Committee because I am a member of the Committee of Selection—we shall knock sense into it so that by the time it comes back to the House on Report stage the Home Secretary will not even recognise it.
§ 6.0 p.m.
§ Mr. Antony Buck (Colchester)
I hope the hon. Member for Thurrock (Mr. Delargy) will forgive me if I do not 728 follow him in what he said—and perhaps that would be a little difficult—save to say that I am sorry that he said what he did about the Home Secretary and about his reference to the fact that we are not debating other matters. Both he and I agree that there are matters burdening us now which occupy a very great part of our thoughts and attention; but whether we should be doing any good by debating them in this House now is another matter. Perhaps it is no bad thing to turn quietly and soberly for a few hours to consider a matter which is not of transcendental importance.
§ Mr. Rees-Davies
As the hon. Member for Thurrock (Mr. Delargy) will be leaving the Chamber, I wonder whether I might answer a point he raised'? This is a matter of great urgency because if it is not dealt with within the next two months there will be no tote board at all.
§ Mr. Buck
No doubt in due course my hon. Friend, with his great interest in and knowledge of racing can deploy, as I know he will, those matters further. He is right. This is an important Bill, important for those who enjoy racing and enjoy having a bet on a horse race and other forms of betting. To that extent it is important, though nothing like as important as the matter of which the hon. Member for Thurrock was speaking. I accept that completely.
I will not weary the House with a long speech on the Bill, because of the speech made by my right hon. Friend from the Front Bench in moving its Second Reading this afternoon. When I first read it I was somewhat alarmed by it. I am bound to say that I could not have supported its Second Reading had it not been for the words we have had from the Home Secretary relating to Clauses 3 and 5.
I have come to accept completely that it is right that the tote should be saved. I accept that it is right for racing, for the health of the racing industry as a whole and for the good and honest organisation of betting that the tote should continue in existence. Like the hon. Member for Thurrock, I have no deep knowledge of racing or betting, but I accept that it is right that there should be an element of competition here and therefore I believe that the tote should 729 be saved. But I should not have been prepared to vote for this Bill had I not received the assurance from my right hon. Friend that he will be proposing in due course to make appropriate amendments to Clause 3 of the Bill.
§ Mr. Tom McMillan (Glasgow, Central)
The competition to which the hon. Member is referring should come from members competing against the tote board setting up these shops.
§ Mr. Buck
I do not follow the hon. Member's point. Competition is to come from the tote board. I cannot see how competition could otherwise have been devised. With the hon. Member for Leeds, South (Mr. Merlyn Rees), who opened for the Opposition, I worked hard on the Bill dealing with gaming, which set up the Gaming Board, as did my hon. Friend who will wind up the debate. At one stage, I turned my mind to the question whether there could be an appropriate degree of control of betting on race courses and other forms of betting, by the creation of something similar to that which was created to control and supervise casino gaming, and so on. But I came to the reluctant conclusion that it would be virtually impossible to do so. One can lay down rules according to which roulette, chemin-de-fer or other games of chance should be played, or machines operated; but one cannot lay down rules regulating the odds which are to be quoted by bookmakers. That would be totally impossible. Therefore, if there is to be competition, the only possible way to have it is through the tote. I cannot see any other possible system of competition.
My friends who are versed in racing matters tell me that the fact that the bookmaking industry is now in fewer hands is in their opinion—and they may or may not be right—causing odds to be not what they ought to be. That has been said by those with much greater knowledge of the racing world than I, and if it be so, then the only way of dealing with it is by having something in the nature of the tote. I therefore accept the basic principle of the Bill.
I was not entirely sure about that when the Bill first came out, because of more general considerations about propping up an industry which is not paying, and so on. But in going into the subject more deeply, one realises why 730 the tote is in difficulty. Aspersions have been cast on the management. I am glad to see that under Clause 2 of the Bill there is to be scope for additional members on the board; but it is obvious why the tote is in a parlous condition. Statutory obligations have prevented the Totalisator Board from being able to build up reserves for modernisation or to tide it over bad times; and this is a major factor.
Limitation on the type of trade it can cover in the betting world has had the effect of making the tote suffer losses, apart from the fixed overheads to which the hon. Gentleman referred, and these are very cosiderable. It has now got into a parlous state, and I am sorry that the previous Government did not deal with this as soon as the Totalisator Board called attention to the fact that it was running into difficulties. It was clear from the reasonable speech of the hon. Member for Leeds, South that he was not seeking to make party political points and that he thought that the tote should be saved.
But the way in which my right hon. Friend seeks to do this, through the Bill as at present framed, is not acceptable and I am glad that he has said that he will amend Clause 3. Briefly, my objection to the Clause is that it goes against the fundamental principle of equality before the law. That is my objection to it as a lawyer, and that is why, without the assurance that it is to be amended, I could not have supported the Bill. It says there shall be one set of criteria—a strange thing to find in a Tory Bill—for private enterprise, for the bookmaker, and another set of criteria for the quasi-nationalised or semi-nationalised Totalisator Board. That is why Clause 3 as at present framed is unacceptable to me; and if it were vice versa, it would still be unacceptable.
We should find it objectionable to say to a court, "You shall apply certain criteria to one set of people and a different set of criteria to another set of people". Many of my hon. Friends, and hon. Gentlemen opposite, feel strongly about this. I am grateful to the Home Secretary for having said that he will be amending this Clause in Committee to provide that there is equality before the law on this matter, and that a magistrate in granting a licence, or an authority in 731 considering whether a licence shall be granted, shall be able to consider competition. That is fair and perfectly appropriate and we shall not then be going against the fundamental principle to which I have referred. I am grateful to the Home Secretary, for without his assurance the Bill would have been repugnant to me and to many of my hon. Friends.
Similarly, I was not happy about Clause 5, and I am glad that the Home Secretary has said that he will consider amending it. All that is needed here is for the Levy Board to have power to provide a guarantee and the money could be raised on the market elsewhere. That would be sufficient, and I expect that that will be the Amendment which will be introduced in Committee. With those two Amendments, I welcome the Bill and am able, though not with any joy in my heart, to support it.
I hope that the Bill will be successful, but we must not underestimate the difficulties of the newly constituted tote board which will be in hot competition with bookmakers in a sphere of betting where large sums of money can easily be lost as well as made. There will undoubtedly be need for a substantial strengthening of the board to bring in people with ordinary bookmaking experience and possibly experience of betting abroad.
As to the matter raised by the hon. Member for Leeds, South, I agree that we should look into the control of the board, but the fears that have been expressed have been somewhat exaggerated. The Government have an admirable degree of control because it appoints people to the board, and those who have the power to hire and fire have a substantial element of control. Secondly, the accounts have to be laid before Parliament, and it will be open to any hon. Member to raise points on them on the Floor of the House at an appropriate parliamentary opportunity.
I am glad to have had the opportunity of saying a few words on the Bill, and that the speech of my right hon. Friend has enabled me not to be in conflict with him or with my hon. Friend the Under-Secretary of State, who is one of my oldest friends in the House of Commons. I welcome the Bill, based on the assurances 732 which have been given by the Home Secretary.
§ 6.12 p.m.
§ Mr. Arthur Lewis (West Ham, North)
I apologise to the House for having an annual engagement which necessitates my leaving the Chamber shortly. I see that the hon. Member for Colchester (Mr. Buck) also has to go, so I will deal first with the points which he made.
Towards the end of his remarks he referred to a quasi-nationalised concern. This is not a nationalised or quasi-nationalised concern; it is a private monopoly with State aid and support, to which the Minister appoints members with no knowledge of the subject—although they may be good ex-brigadier generals—and over whom the House has no control. Even the Minister in day-to-day administration is not answerable to the House. The accounts may be published, but we are not allowed to debate them unless the Leader of the House gives us time to do so. It is not a quasi-nationalised concern; it is a private enterprise concern with State protection.
Ordinary working-class people often say that there is one law for the rich and another for the poor. This certainly applies to horseracing. The hon. Member for Southend, East (Sir S. McAdden) could not understand why all this assistance should be given to horse racing. Assistance is never given to greyhound racing or to football. The reason why assistance is given to horse racing is that it is the sport of kings. In addition to the hundreds of thousands of punters and in addition to the bookmakers, it is patronised by wealthy racehorse owners. They have been clamouring for more prize money. They have had more prize money and no doubt they will have even more. I have not heard of many race-horse owners who have died in poverty. I have never seen any drawing the dole. They are wealthy men. Even if they were not I should say to them. "If you want to become an owner and lose money, that is your business".
The argument is that the industry must be kept going otherwise it will go under. Several reasons have been given for the Horserace Totalisator Board failing. The Greyhound Totalisator Board has all the same difficulties and cannot run at a 733 profit, but that is not to be given assistance. I do not care whether it does not run at a profit. There is a greyhound track in my constituency, and that is my only interest in the matter.
My hon. Friend the Member for Thurrock (Mr. Delargy) made an excellent speech. Like him, I have been only once to a horse race and that was with an Inter-Parliamentary Union delegation with colleagues from the Irish Parliament. All the Irish won and I lost—perhaps because I had no knowledge of horse racing. Although I lost, I did not expect to come to Parliament to ask the Home Secretary to introduce a Bill to assist—
§ Mr. Ashton
If my hon. Friend is leaving the Chamber shortly he will not be able to hear the replies to the points he is making. Greyhound racing does not have the benefit of television. Horse racing is televised, but dog racing is not.
§ Mr. Lewis
My hon. Friend can make his own speech. I am dealing with the points made by my hon. Friend the Member for Thurrock who did not mention television competition. I understand that greyhound racing is shown on television on a Saturday afternoon, but I could not care less. If anyone cannot make a profit let him get out, it is as simple as that.
The Government has invented an internationally famous saying about not helping lame-cluck industries. They will not help U.C.S., the ship workers, the dockers, the engineering industry—no. But they will introduce legislation to help the horse-race owners, the horse-race business and the betting industry.
It is said that bookmakers do very well; of course they do. They make fortunes. I was one of the first to say that the industry should be taxed. I originally led the campaign against a tax on greyhound racing, which was discriminatory, because no one else was paying it at that time. If Bill Smith, the bookmaker down the road, cannot make a do of it, he must pack up and get out. If he came to me and asked me to introduce a Bill to give him help. I would refuse to do so.
734 What we are discussing is the Bill, not what the Home Secretary has said. As the Bill stands, it discriminates in favour of a near-monopoly to allow it to set up betting shops with no right of appeal by local people who do not want a betting shops. I declare an interest here, in that there are more betting shops in my constituency than in any other constituency. There are more betting shops in West Ham than there are pubs and churches. and that is saying something.
At the moment we can object. If Bill Smith wants to put a betting shop near the homes of some of my constituents, they can object. But, as the Bill stands, the tote can get its betting shops, although there may be an over-abundance in the area.
§ Mr. Carlisle
As the hon. Gentleman said that he will have to leave, will he accept my assurance that that is not so? The Bill, even as drafted now, in no way interferes with the powers of local justices to decide whether the location and the premises are unsuitable.
§ Mr. Lewis
I was coming to the need in an area where there is a proliferation of betting shops. As the Bill is drafted, there could be one next door to the other. There could he Bill Smith with his betting shop and the Horserace Totalisator Board could open next door and no one could say a word about it. That is a shocking situation.
Many bookmakers have established lucrative betting shops—I think too many—but it would be a "bit off" to give the right to some other organisation to come along and say, "We have now the right to come in. You have made it lucrative. We have failed to make a success of our tote, where we have a monopoly on the tracks"—except for the on-course bookmakers—" and therefore we are opening up where you have ploughed the way and made a success of it."
I should like fewer betting shops. Personally, I should like to see the whole thing done away with, but I appreciate that that cannot be done. I would do away with all forms of betting and gaming. I know that that would not be good from a moral point of view, so it cannot happen. Therefore, it has to be controlled, and it should be controlled by limiting it. not extending it.
735 We are told that the tote must have betting shops to compete. I interjected to the Home Secretary that it already had betting shops. It had the City Tote. That was sold out or given away. I do not know what happened. I do not know what was paid for it. No one knows. There were rumours that a racket was being worked. We could not ask Questions in the House. No one was responsible. I was told that some of the people on the board did very well by having an arrangement with those who took over. I do not know, because we could not ask Questions about it.
The City Tote offices were in a very good lucrative position. I am sure that William Hill, Ladbrokes, or one of the big bookmakers would have given a fortune to get the City Tote. I suppose that whoever got it did give a fortune. I do not know. I suppose the Government got money for it. Or did they just give it away?
We see a marvellous example of the Government coming forward always to help this industry. My hon. Friend the Member for Thurrock rightly said that we have 101 things of far more importance to discuss. if this were a Measure designed to increase old-age pensions, I should be the first to say, "Let us get on and do it quickly".
The Home Secretary said that he did not discuss the Bill before slipping it in. My hon. Friend, the Member for Thurrock, is quite right that it was slipped in. It was not in the election addresses of any party and it was not in the Queen's Speech. It was slipped in just after the Queen's Speech.
The Home Secretary told us that he did not discuss the Bill with anyone. Can he put his hand on his heart and say that he has never discussed it with Lord Wigg, the Horserace Totalisator Board or the bookmakers? I do not know. If he did not, it is rather strange. I think that he should have discussed it with such people. Had he done so, he would probably not have created the unique situation on Second Reading, of agreeing to alter drastically the two major Clauses in the Bill. Evidently the right hon. Gentleman did not realise that there would be this outcry by hon. Members on both sides of the House.
736 My original intention was to vote against the Bill. Unfortunately, I do not think that I would get much support. Nevertheless, I hope that I might serve on the Standing Committee. With my 27 years experience of knowing how various things happen, it is doubtful whether I shall be allowed to serve on the Committee. I should like to be on the Committee because I am against preferential treatment being meted out, whether to the bookmakers, to the Levy Board, or to anyone else.
George Wigg—I beg his pardon, Lord Wigg— will be able, through his Betting Levy Board, to give money allegedly to improve horse racing and to make the stands at Ascot and the amenities generally better. Some of this money will come from bookmakers. Some of my constituents will no doubt be paying money, as they do now, to the bookmakers and they will no doubt go into the tote's betting shops when they are set up. Some of that money will go to improve horse racing which they very rarely attend. They do not get time to go to Ascot. Perhaps they will go to the Derby.
Many of my constituents regularly go to the greyhound tracks. Not a halfpenny of the money about which we are talking will go to develop the amenities at greyhound tracks. They do not need it. Licensed greyhound tracks have wonderful amenities. The dogs are very well looked after and the customers are well catered for. Everything that seems to be lacking in horse racing is present at greyhound tracks. I return to my original point. If greyhound racing tracks can be successful, why cannot horse racing? I do not see why we should underpin and help this lame-horse industry.
I cannot subscribe to the feeling that hon. Members should be asked to spend their time, with all the various Committees which are sitting, going through this Bill at this time. It could have been put off and debated on some future occasion.
§ Mr. Rees-Davies
The hon. Gentleman has expressed the view that he knows nothing about this subject and that we ought not to be debating it. I hope, therefore, that he will consider that it would be unwise of him to waste his time on the Standing Committee.
§ Mr. Lewis
No. The hon. Gentleman is quite wrong, as he often is. Who knows, I might be able to improve the Bill even more than the Home Secretary who has agreed to amend two of its major Clauses.
If this is to be the principle, I hope that the Home Department and the Government will consider the possibility of helping other sports. If it is accepted that the Horserace Betting Totalisator Board is floundering and that the horse racing industry will go under unless there is the tote, and that the Bill is necessary to plough in money, then let us plough money into football, cricket, squash, tennis, and all the other sports. I am against singling out one particular sport, which happens to be horse racing. I think that we should treat all sports alike, or do nothing for this industry.
§ 6.29 p.m.
§ Sir Henry d'Avigdor-Goldsmid (Walsall, South)
Not for the first time the hon. Member for West Ham, North (Mr. Arthur Lewis) finds himself in a minority of one. All previous speakers have shown the same desire to see the Bill on the Statute Book, albeit in an amended form, but the hon. Gentleman is opposed to it. I honour him for his opposition, although I find it difficult to go along with the grounds for his objection.
The hon. Gentleman explained how extraordinarily well greyhound racing courses are kept and all the amenities which are provided. However, he does not take account of the fact that they are provided because the greyhound racecourses own their own totes and get the proceeds.
The Horserace Totalisator Board has to cope with 63 different courses, at which there is an average number of days' racing of under eight, whereas at greyhound tracks racing takes place for many more days. In any case, the debate is about the Horserace Totalisator and Betting Levy Boards, and I shall endeavour to return to it.
One question which has not been asked, and which must be asked, is whether there is a national interest in keeping horse racing alive in this country. I quote the figures for bloodstock exports from yesterday's edition of The Financial Times: 738British bloodstock sales abroad last year earned a conservative £3.27 million.I assume that that is probably an underestimate. But whether or not it is an underestimate, the £.3¼ million is earned out of the produce of this country without any cost in imported components or things like that. So there is, first, a national interest in maintaining the export market.
How does the tote contribute to that national interest? Some of my friends say, "If the tote cannot earn a living, what would be the tragedy if it disappeared?" That point needs an answer, and I do not think that any previous speaker in the debate has tried to answer it. At present the bookmakers' contribution to the Levy Board is the most important element in racing today. They contributed 32 per cent. of the prize money in 1971. The tote made no contribution. This money is distributed among varying race courses and varying events, at the discretion of the Levy Board.
It would not be out of place to pay tribute to the noble Lord, Lord Wigg, under whose very effective chairmanship the Levy Board obtained the co-operation of the bookmakers. The bookmakers have co-operated because they appreciate that the integrity of the turf is of major importance to them.
The betting shops are now a high street industry, attracting many consumers who have no special knowledge of racing. Those consumers must have a general confidence that they are not being swindled, in other words, that races are fairly run and that the conditions under which horses race are open and above-board. This is one of the factors to which the Levy Board has helped to contribute, by its contribution to veterinary science and other matters.
I hesitate to add anything to what was said by my hon. and gallant Friend the Member for Lichfield and Tamworth (Major-General Jack d'AvigdorGoldsmid), but he failed to mention that the Levy Board had made an important contribution to the welfare of the less glamorous members of the racing community, the stable lads. A substantial proportion of the sums collected by the Levy Board has gone for the welfare of the people working in the industry and not getting highly glamorous salaries for doing so. So we can agree that the 739 Levy Board, as supported by the bookmakers, has done a great service to British racing, in that it has helped to maintain the proper standard of integrity.
I want to deal with this matter in some detail. If the bookmakers are to be important contributors to racing, they are bound to want to have a say about how their contribution is spent. This year there were two outstanding race horses, three-year-olds, called respectively Brigadier Gerard and Mill Reef. Brigadier Gerard won about £80,000 in stakes. Mill Reef won in England £121,000, apart from that which he won in France. My particular point is that in Brigadier Gerard's races, £60,000 was added money from the Levy Board. The winner did not receive all of it, but a very substantial proportion—about three-quarters. But there was only one race which Brigadier Gerard won in which he did not start an odds-on favourite.
As those who go racing know, races which are won by odds-on favourites do not contribute in any way to the earnings of bookmakers because betting dries up and there is virtually no return. It will be very annoying for bookmakers if they continue to pay very large sums to the Levy Board on which they see no return through increased business at their offices, so we ought to think very hard about the situation that would arise if the tote board went out of existence.
As to the tote board's history, we all know fairly well that its eyes were not open to the possibility of increasing business provided by the legalisation of betting shops. It simply did not take advantage of the scope given under the legislation. It opened some betting shops, but it was quick to sell them. One could draw a parallel with commercial television. The tote was first in but, like some of those first into commercial television, it pulled out long before the business became profitable. Now the business is clearly profitable. It is clearly a high street industry. That is why someone like Sir Charles Clore has taken a big interest in it. He deals in retail stores and he regards a betting shop as a form of retail store. It caters for the same sort of public in the same conditions as any retail store.
In these conditions, how can the tote keep alive? Clearly the bulk of the 740 betting business comes from the high street. I do not see how it can keep alive unless it can get on to the high street. Although many of my hon. Friends feel deeply and sensibly—I agree with them—that Clause 3 unamended would be taking powers from magistrates which properly belong to them, I am confident that a satisfactory Amendment will appear.
The contribution from the betting industry to the Levy Board should come from the tote as well as from bookmakers. The tote cannot get a living in present conditions without shops. From the last report I see that between 1969–70 and 1970–71 the total turnover fell by 4 per cent. Of this, the on-course turnover fell by 8 per cent., and the off-course turnover remained absolutely static. In other words, there is an off-course business to be done. On-course business is bound to be smaller. Whether that is because of television or the provision of betting facilities in the high streets is open for discussion. We need not consider it now.
It was once said of T. E. Lawrence that he backed into the limelight. That might be a suitable description of the Bill. It has sidled rather mysteriously into the limelight and has attracted a great deal more attention that it would have attracted if it had been produced in a more normal way. I am glad that my right hon. Friend the Home Secretary has had second thoughts about it.
The prosperity of English racing has a meaning, and not the class meaning that the hon. Member for West Ham, North sought to give it. It has a meaning as a form of agricultural activity as well as a tourist attraction. It has a reality that can be achieved only by the bookmakers and the totalisator accepting each other's presence. We can be completely confident that the totalisator will not put the bookmakers out of business. People talked about a tote monopoly about 10 years ago, but the British public were not interested. They wanted to bet with the bookmakers. The bookmakers have prospered and in many ways the Turf has improved as a result. There was a time when we used to hear about dark doings, about Derby favourites being nobbled and things like that. We have greater security now and the fact that 741 betting has got on to the high street has prevented the distortions that crooked betting can bring.
The Bill should go on to the Statute Book, but it will succeed only if the bookmakers recognise that the continuation of the tote does not pose any threat to them. In fact, the combination of the tote and the bookmakers should give racing in England the place it deserves, the place it has had traditionally, the position on the breeding side that the British climate has helped to give it. Over the years, people have come here to replenish their blood lines, because the English climate is particularly favourable for the rearing of young stock. If the prizes in English racing are not comparable with those offered elsewhere, horses will not race here, the best blood lines will leave this country and our industry, which is important, will decline. It could decline quite quickly.
This is not a class matter, as the hon. Member for West Ham, North suggested. He told us that he had not seen any race horse owner begging his bread. But there was a famous owner, Robert Standish Sievier, who won four classic races one year and was a bankrupt not long afterwards. There are race-horse owners who get into trouble. The Bill will not save them from it, but it will give a useful basis for co-operation between the totalisator and the bookmakers on which English racing can look forward to a reasonably secure future. I therefore support it.
§ 6.43 p.m.
§ Mr. Brian Walden (Birmingham, All Saints)
The Americans say that it is differences of opinion that make horse races. They also make politicians, so it is appropriate that we should be debating this Bill.
Although I do not like the Bill, I do not make use of the doctrine of unripe time; namely, that it is not a good idea that we should be discussing it today. It is never a good idea that we should be discussing anything on any day. I have heard that criticism made about all legislation. Every hon. Member accepts that the Bill does not concern a major matter of national policy, but it is important in a way.
The Bill is illogical, and in introducing it the Home Secretary had to make an illogical and contradictory speech. The 742 amiability of his character and the plausibility of his manner distribute around him a rosy, enervating glow which sometimes masks the contradictions of what he says. A good deal of what he said, which to my surprise appeared to reassure some of his hon. Friends, does not reassure me very much, at least in one particular. Admittedly, his rather vague verbal proposed changes make the Bill better, but I am not very much in love with it even with those guarantees. I wish that I could be on the Committee that will consider the Bill, but I am not allowed to be by my Whips. I hope that those hon. Members who do serve on the Committee will examine the Amendments to Clause 3 and Clause 5 very carefully. The formula the Home Secretary suggests for amending Clause 3 is completely unsatisfactory.
But before I say more about that let us consider Clause 1. HANSARD stands as the record, and tomorrow morning it may contradict me. But I think the Home Secretary said three times that what we needed was an alternative form of betting. He implied that that meant that the tote should be allowed to compete directly by quoting starting price odds with bookmakers. That is misleading. It is true that in 1928 the House agreed to an alternative form of betting—pool-betting. It did not agree that we should establish a State or quasi-State board, a private monopoly suported by State funds or any other body of that kind to usurp the normal function of bookmakers in all countries, which is to quote starting price odds. The alternative form of betting was meant to be pool betting. The very word "totalisator" implies that.
To allow the tote to quote starting price odds is a complete reversal of all the assurances given when it was established, admittedly a long time ago I know contemporary morality well enough to be aware that any pledge made more than five years ago is no longer to be regarded as valid, so I do not place too much weight on those assurances. But the change also makes nonsense of the whole concept of a tote as an alternative kind of betting. Far from taking pride in it, and juggling the words as if there were no difference between "alternative" and "competitive", the Home Secretary should frankly admit that he is 743 introducing a Bill that establishes the right of the tote to operate in all respects as a bookmaker—but on more favourable terms than any private bookmaker can expect to obtain. I am not at all happy about that as a principle. It astonishes me that Conservative Members are.
The hon. and gallant Member for Lichfield and Tamworth (Major-General Jack d'Avigdor-Goldsmid), for whom I have the greatest respect in other regards—when I was our spokesman on Army matters I found his comments and advice very valuable—said something very interesting. He said that all the money was now in off-course cash betting at starting price odds. I would not say that all the money lies there, but I admit that that is where the bulk of the market is. That is bad luck for the tote. I am a great sympathiser with the tote, and I shall suggest an alternative way of financing it.
But if the National Coal Board decided to set up petrol stations on the ground that it was much easier to make money selling petrol than mining coal, I can imagine what Conservative Members would say: "It is very bad luck on the National Coal Board. It has had to deal with very difficult circumstances, with a decline in its labour force and very difficult seams, and on the whole is it not a very profitable business." Although they might express sympathy with the Coal Board, certainly they would not allow it to drift off into another activity which it could claim to be allied. Even though the Coal Board might say that, after all, it is all fuel, just as, presumably, the Home Secretary says that it is all betting, I think that hon. Members would object to that. We know that they object to British Railways running railway hotels on the ground that the job of British
There is some illogicality in the views of right hon. and hon. Gentlemen opposite on this matter. They wish to delineate strictly in normal circumstances, but apparently they are prepared to close their eyes to the fact that, far from passing a Bill which will suport an alternative system of betting, we are setting up a body which is to be directly competitive with the bookmakers and, ironically enough, on the capital supply 744 of their own money. Of course, the Levy Board will proffer the tote loans. Udder the logic of this Bill, it is difficult to see what else the Levy Board could do. It will be the bookmakers' money that the Levy Board will give to the Totalisator Board so that the tote can operate as a competing bookmaker at starting price odds. It is not exaggerating to say that there is at least food for thought Were. I leave the point simply by saying that many hon. Members opposite who are likely to serve on the Standing Committee which considers the Bill ought to look closely not only at Clauses 3 and 5 but at the principles involved in Clause 1. In my view, Clause 1 lies at the heart of the Bill. We are taking off the totalisator a restriction which in my opinion should remain on it. I believe that the tote should remain a form of pool betting and should not be allowed to engage in starting price betting.
I do not sneer at the tote losses. I am sure that my hon. Friend the Member for Bassetlaw (Mr. Ashton) will catch Mr. Speaker's eye later. I heard my hon. Friend elsewhere making a brilliant defence of the present situation of the tote, and I agree with him. The tote suffers partly because of contemporary circumstances. When the tote engages in pool betting, its losses, if any, are at least calculable. The tote has a pool. It retains a certain amount from the pool and distributes the rest. Its administrative costs can be computed and its losses, if any, can be calculated. But if the tote engages in starting price betting, it will no longer be possible to compute what it will lose.
I do not share the asinine belief that if only the tote is operating on a big enough scale at starting price odds it is bound to make money. I am not sure about that. Nor do I like the idea that it should bring in private bookmakers and run an agency with them. I do not like the sound of that at all. It could be argued that no great sum is involved, that the Budget will soon be with us, and it will be an enormous sum and surely we can afford to get the tote out of its difficulties. I have doubts about that. If the tote is allowed to operate starting price betting, not only will it be unfair to bookmakers but there will be no guarantee of the upper level of the losses that it will make.
745 The hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) told us what good work the tote board did, and I agree with him. The hon. Gentleman named a number of winning horses last season and the Derby winner of the previous season. One reason why they operate in this country is the contributions of the tote board to certain "starred" races. But what happens if the tote board operates as a starting price bookmaker and makes a great loss? I suspect that we shall have to get round to another set of dodges. That is what this Bill is; it is a series of dodges and expedients to try to bail the tote board out of a deficit.
Much as I respect the Home Office, I do not have the slightest confidence in the Home Office when it deals with matters concerned with betting and gaming. The only body worse than the Home Office is the Treasury, which is totally incompetent when it deals with matters concerned with betting and gaming. That is demonstrable from the figures. Always it kills the goose which lays the golden egg. The rates go up and up and the base on which it claims them comes down, which is why the rates have to keep going up. If the Home Office gets at it again, I do not think it will come up with anything better than this Bill.
From the general, I turn to Clause 3. It is iniquitous. It astonishes me that it ever got into the Bill in this form in the first place. I am not surprised that the Home Secretary, with the best grace that he could muster, announced to his hon. Friends hurriedly that they need not read it too closely because they would not be asked to pass it in its present form.
Looking at the Explanatory Memorandum, the provision that a betting office licence may not be refused by the licensing authority commits in one sentence about as many errors as it is possible to make. First, it makes nonsense of the licensing system. What is the use of asking people to apply for licences if it is known beforehand that they cannot be refused? Then it takes away local control, about which we should all care. Thirdly, it will enormously annoy the licensing justices. Fourthly, it is grossly inequitable. Why should a private bookmaker have to demonstrate 746 to the justices that a demand exists when the tote is not required to do so?
§ Mr. Walden
That makes nonsense of the system of licensing by reference to local demand. The job of the justices is to decide whether there are enough betting shops in a given area. It is irrelevant who owns them. For the tote to say that it cannot be judged by that criterion, that it may be thought that there are enough in Stepney, Bermondsey, West Bromwich or Birmingham, but, "Back luck, we are the tote and can have one anywhere", regardless of whether the private bookmakers have a 10-year start, makes nonsense of the licensing system, and the Home Secretary knows it. Apparently that is why the sentence will go.
I hope that the House does not take comfort from that fact if the formula that the right hon. Gentleman offered today is any guide. I do not know what it means. I think that the right hon. Gentleman said that, though the magistrates would retain their right to determine this issue, he would make it incumbent upon them to bear in mind the tote board's need to compete. I strongly suspect that to be twaddle, and I hope that lion. Members who are appointed to serve on the Standing Committee will not allow the Home Secretary to write drivel into the legislation which makes it fairly clear that the right hon. Gentleman wishes licensing justices to review tote applications for betting shops in a different way from the way they review private applications.
I do not think that any mention of that need be there at all. We can stand by the present system. If the tote is to be allowed to open betting shops, it should make application like everyone else. The Bill does not require guidance to the magistrates on that score at all, and I hope that hon. Members who serve on the Standing Committee will be diligent in questioning the Home Secretary about what this extraordinary formula means; namely, that the justices can do as they like and make their normal choice, but must hear in mind the need of the tote to compete.
Even that formula is unsatisfactory. I hope that in its final form the Bill makes 747 no reference to any restraint on the licensing justices. If it does, I hope that the Opposition will choose to divide against it, in which event they might get support from the benches opposite.
§ Mr. Ashton
Will my hon. Friend mention the number of shops involved? There are 14,000 private betting shops, and the tote wishes to establish 200. That is 2 per cent. competition. Surely my hon. Friend is enormously exaggerating the amount of competition.
§ Mr. Walden
No. Although my hon. Friend is right in his numbers, let me make two points to modify what he says. First, the tote will want the best sites. The fact that it will establish only 200 tells its own story. I have no financial interest, direct or indirect, in the bookmaking industry or in any allied industry; I am neither for or against bookmaking in any financial sense; but I do care about justice for individuals. I suspect that certain private bookmakers will he unjustly treated as a result of the legislation. It is not the number involved but the fact that we can pass legislation which will allow this to happen at all which worries me. It will be found that some bookmaking businesses will be adversely affected, or would be, if Clause 3 remains in its present form. It will be bound to diminish takings or to remove a site that might have been available for extension or for other companies.
Clause 5 suggests that the Levy Board should be able to give financial assistance to the tote. Despite the fact that attendances on the course have declined and that there are difficulties about the tote operating in the way it used to and making the kind of contribution it used to, I am not convinced that the present administration of the tote is satisfactory or that all of its losses can be accounted for by current social phenomena. If we accept that the tote is of value and that it should be kept in existence, then rather than this mumbo-jumbo I would sooner vote for a straight subsidy and clear its debts in that way.
The Home Secretary said that there was no public money of any kind involved; but that depends on what we mean. I said that some of the right hon. Gentleman's statements were somewhat contradictory and misleading, and 748 it is misleading to say that no public money is involved. To begin with, all contributions made by anyone to the Levy Board can be claimed against tax. It is done by bookmakers and is done by the tote. There is public money involved. I would much have preferred that we had a Bill which in no way extended the right of the tote to move beyond pool betting but allowed it to operate on things other than horse racing, although I am not overwhelmingly happy about that. As the hon. Member for Southend, East (Sir S. McAdden) pointed out, the present Home Secretary is not immortal—we must assume that for want of evidence to the contrary—and someone else may get his job. The fact that he will not allow people to do certain things does not mean that people will not want to do them.
No party can bind another. If my party replaces the present Government, then knowing its love of public boards or quasi-public boards or anything to which the adjective "public" can be attached, I would not be surprised if there was an extension of the right of the tote board. [HON. MEMBERS: "Hear, Hear."] Exactly. I hope that all hon. Members opposite take note of those cheers and give some thought to this in Committee.
I accept the extension of pool betting to other things with the restrictions set out. If the tote has not got the capital, I would much prefer the House voted that capital to get it out of its present dilemma. I am not against the tote having betting shops. I would be prepared to see more than 200. But what I am not prepared to see is a discriminatory System whereby its applications have to be accepted and other people's applications have to be judged on the normal criteria of demand, or any system which pretends not to impose this but does so. I do not like the Bill or the principles behind it. I mean it not in a personal sense but in an intellectual sense when I say that some of the principles are shifty. They are expedients to bail us out of the present crisis. I hope that the Committee makes sure that the Bill does not precipitate us into a worse one.
§ 7.16 p.m.
§ Mrs. Jill Knight (Birmingham, Edgbaston)
The hon. Member for Birmingham, All Saints (Mr. Brian Walden) 749 has made an excellent speech and I found myself in agreement with practically every sentence. I am filled with alarm and despondency to discover that he is not to be on the Committee whereas the hon. Member for Thurrock (Mr. Delargy), who did not make one constructive remark, is to be a member, apparently due to some machinations with the Selection Committee. This augurs ill for the progress of the Bill. I am sure that the hon. Member for Birmingham, All Saints will share my view that whatever else this Bill is, it is not a Conservative Bill.
When I first read it I had the uneasy suspicion that it had somehow been left in a pigeon-hole in the Home Office when the Labour Party was invited by the electorate to leave office. It seemed that the spring cleaning of June, 1970, overlooked the Bill, but by November of last year some zealous Mrs. Mopp noticed that the pigeon-hole was bunged up and yanked out the Bill, putting it on top of the pile in the Home Secretary's in-tray. The mighty wheels of Government turned and about ten days later—lo and behold—the Bill got a First Reading. I am glad that she did not nut down a bus ticket or a laundry list or we might have given that a First Reading, too.
Since then it is clear that the Home Secretary has had a few doubts. The Hon. Member for Thurrock said that this was an "Alice in Wonderland" situation, and I can agree with him on that. As I have listened to this debate, I have thought that it was "curiouser and curiouser". There has been a muted condemnation of the Bill from the Opposition but from this side of the House there has been a fairly wide measure of support. I am absolutely amazed. The Home Secretary has not been awfully clear about this and I am not sure what will be happening in Committee. We are Conservatives and have no business passing Labour legislation.
This is a Bill to nationalise the tote. Clause 1 allows it to bet on anything. The Royal Commission on Betting, Lotteries and Gaming, which reported in 1951 and upon which the 1960 Act was based, recommended that totalisator betting should not be extended to any other form of sport. Therefore, in the 1960 Act, when Parliament gave the Totalisator Board the copyright of tote odds, the main 750 reason given by the Government spokesman was that the board could not in law operate as a bookmaker—
§ Mr. Ashton
On a point of order. I understand that sitting in the Box at the end of the Chamber are several representatives of the bookmaking fraternity and that hon. Members keep going across there to get advice. Is this in order?
§ Mrs. Knight
I believe that I am right in saying that we have friends from the Totalisator Board as well as from the bookmaking industry—
§ Mr. Deputy Speaker
Order. I should go further perhaps and say to the hon. Member for Bassetlaw (Mr. Ashton)—I am sure that he will not take this in any personal way: it is just for the benefit of the record and the House—that it is out of order to refer from the Floor of the House to anyone in the Gallery.
§ Mrs. Knight
It is a comfort when we have accurate information.
I looked this matter up and found that the Royal Commission on which the 1960 Act was founded recommended that tote betting should not be extended to other sports. This is what the Bill will apparently do. I am not sure from what my right hon. Friend said how far or how fast this will be done.
The Bill will also allow the tote to act as a bookmaker as well as to run pools. I believe that the tote was invested by the Chinese. It is certainly full of Eastern promise. It has been going for about 40 years. All this time, it has been operating pool betting, which yields an automatic gross profit on each race, with the tote deducting its fixed percentage from the pool of money staked before distributing what remains to winning betters.
I am not a better. I share the view of the hon. Member for Birmingham. All Saints in that I have no vested interest of any kind. I hope merely to be fair and to state what the position has been and may now be if the Bill is not greatly amended. With an automatic gross profit on every race, a monopoly of pool betting on horse racing, and a parliamentary-acquired copyright of tote odds, the tote 751 has achieved the seemingly impossible task of making a loss.
The Bill intends to take the tote into bookmaking, where there is no automatic gross profit on every race, and where, under a fierce system of competition, the number of bookmakers has been declining in recent years. The tote will draw money from the Levy Board instead of paying to it.
When the Bill was published, I read the newspapers the following day with great interest. The Observer had a point when it said:This lame duck is going to demand an excessive amount of subsidies even to keep it in business.The Telegraph said—this is why I feel strongly about the Bill—It comes to a sorry pass when the Home Secretary, doubling up on a rôle hitherto reserved for the Secretary of State for Trade and Industry, rushes to the rescue of 'another lame duck. The Tote exists to provide the public with pool betting on horse-racing as an alternative service to the bookmakers' and at the same time to make a surplus for the benefit of the sport. It has not succeeded in doing either. Having run into the red, the Totalisator Board has already had to be excused payment of the betting levy for the past financial year, and looks like being unable to meet its obligation for the current year. …It is one thing for the Government to subsidise the building of ships or aero-engines. There can be no justification whatever for propping up this particular sort of lame duck.That sums up my feelings. We all know what happens to lame ducks and what happens to lame horses—they shoot them. I am sad about that, but I am glad that this lame horse has been shot at by the Home Secretary. He has shot Clause3—
§ Mrs. Knight
Well, he has made an effort. He has raised his sights on Clause 3 and he has winged Clause 1. How successful his markmanship has been, we do not yet know.
The tote has never shown any great ability to make money, although it has had no competition. It will not start making money when it starts going into competition with what the Observer called "some of the hardest nuts" in the country on really belligerent territory.
I am glad that the Home Secretary mentioned that the bookmakers themselves 752 have no objection to competition from the tote. They think that the tote was a good thing and they do not wish to stop it. They have even advanced a method of keeping it in business. Why do people keep saying that there must be competition for the bookmakers? Do they not compete amongst themselves? I should have thought they did.
§ Mr. John Page (Harrow, West)
I know very little about it, but what even the punter who is an ingénue must realise is that there is a larger and larger grouping of bookmaking firms. There are one or two monolithic bookmaking consortia and a few tiny local shops. At that stage, it becomes rather dangerous.
§ Mrs. Knight
This is a case of the blind leading the blind. If that is a genuine reason for setting up some form of nationalised competition, we should presumably set up nationalised supermarkets or anything else. I cannot accept that there is no competition between bookmakers. I do not wish to see an end of the tote but I want to see an end of the Bill in its present form.
Some of my hon. Friends have said that it is not nationalisation because no Government money is involved. Could I underline the point of the hon. Member for Birmingham, All Saints about levy payments? After all, if a Bill deals with levy yields, it means that a proportion of levy which should have gone to the Exchequer is not going there. So Government money is involved.
§ Mr. Marcus Kimball (Gainsborough)
This is not the case. The levy which is drawn by the Levy Board is based on the bookmakers' turnover and has nothing whatever to do with his profit.
§ Mrs. Knight
But it is allowable for tax purposes against profit. So it seems that Government money is involved. The criticisms of the Telegraph leader writer and of hon. Members today that this is a bad Bill for a Conservative Government to bring in fill me with alarm and despondency. I hope that, whatever happens in Committee, the Bill will become much less of a nationalisation Bill than it is at present.
§ 7.20 p.m.
§ Mr. Joseph Ashton (Bassetlaw)
I thought that I would be able to start by congratulating the Home Secretary on 753 his statesmanship in bringing forward a Bill of this kind in the teeth of strong opposition from the major part of the industry, not to mention many hon. Gentlemen opposite. However, I must hedge my congratulations with reservations about Clause 3, to Amendments to which I look forward with interest.
The Bill is certainly not trivial, and on that score I disagree with my hon. Friends the Members for Birmingham, All Saints (Mr. Brian Walden) and West Ham, North (Mr. Arthur Lewis). When we are speaking of an industry with an annual turnover of over £900 million, how can this he a trivial or irrelevant Measure? Why are the bookmakers putting up such a hell of a fight against it?
Why is the Bill needed? Up to 1961 the bookies paid not a penny to keep horse racing going. They made big profits but paid nothing towards the upkeep of the tracks or towards the prize money that was necessary if people were to train racing horses, without which there would be no races and nothing on which to bet.
From 1961 we had the establishment of the Levy Board, to which the tote and bookies paid a share. The tote paid 3½ per cent. of its turnover while the bookies paid only one-quarter of 1 per cent, of theirs. During that time the tote handed over £6 million for the benefit of racing. On the same criterion, the bookies' payment was £1 million. In other words, the tote paid six times more than the bookies to keep the industry going.
In 1968 the takings of the tote fell because far more horse racing was televised and fewer people went to the tracks. They stayed at home to watch racing on television and nipped down to the corner betting shop to put on their bets. Thus, on a smaller market the tote had to keep up its payments. A few people went to Wincanton and elsewhere, but its takings went down and down. In later years the tote paid out 1½ per cent. against the bookies ½ per cent. It is clear that throughout the period the tote paid vastly more to keep racing going.
Today the tote is in difficulty because of television and various other factors. In the last year it lost £100,000, perhaps more. What can we do about it? We can either close it down—call it a "lame duck", wind it up and write it off—or give it the freedom that any industry 754 needs to survive; and if the customers will not come to the tote on the track, then the tote must go to the customers in the High Street.
To compare the tote with the bookies is like comparing two shoe shops, one of which can sell only brown shoes while the other can sell shoes of any colour plus carpet slippers, running shoes and every other form of footwear.
We then hear hon. Members say that the tote is inefficient or that, being a public enterprise, it does not have sufficient initiative. The trouble is that it is handicapped in the way that a race horse would be handicapped carrying a jockey weighing 20 stone. I congratulate the Home Secretary on allowing the tote to compete on equal terms with the bookies.
When the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) wondered whether there was competition among bookmakers she received some advice from her hon. Friend the Member for Harrow, West (Mr. John Page) and her hon. Friend the Member for Gains-borough (Mr. Kimball); but what are the real facts? An indpendent inquiry was conducted by Sporting Life and was published in its edition of 13th January. Hon. Members have been sent copies of that journal explaining what, in its view, a dreadful Bill this is. A writer to that newspaper pointed out in a letter that the bookies were averaging odds of 4.8 to one while the tote was averaging odds of 6.4 to one. In other words, one got 50 per cent. better odds on the tote.
Why do we need public enterprise in betting? The hon. Member for Birmingham, Edgbaston asked this question and wondered why any "lame ducks" should be allowed to survive. The betting industry has a turnover of over £900 million a year, the tote's share of which is £27 million. So what are the bookies worried about? There are 14,000 private betting shops. The tote wants to set up between 200 and 250, or 2 per cent. of the total. This is the so-called proliferation of betting shops about which we hear so much.
I will tell hon. Members why the bookies are afraid. There are three big bookies dominating the industry today. One is William Hill. Its profits jumped in four years from £203,000 to £1,420,000, an increase of 700 per cent. Another is 755 Ladbrokes, whose profits went up in four years from £425,000 to £2,508,000, an increase of 600 per cent.
§ Mr. Arthur Davidson (Accrington)
Would my hon. Friend agree that the major part of that profit came from cash betting in betting shops?
§ Mr. Ashton
Certainly. That is where the lucrative market is, and that is what the bookies want to protect.
The third big bookie is Mark Lane and Joe Coral. Its profits jumped tremendously in four years, though not as much as the other two. Its profits are extremely high compared with profit rises in any other industry.
Consider the public relations set-up to fight this Bill. Hon. Members have had invitations to attend lunches costing £7 a head at the Mirabelle. Those invitations have come from the bookmaking fraternity. There was a nice do at the Hyde Park Hotel which was designed to brainwash us into throwing out this Measure.
One hon. Member who is not at present in his place and who said that he had no interest in the betting industry—that he was neither for or against it—sponsored a big booze-up in this House yesterday and obviously wanted hon. Members to attend so that they could be brainwashed by the bookmaking fraternity into opposing the Bill while in an alcoholic haze.
Everybody has been saying that it is only a little Measure and that we have far more important things to do. Ulster looms large before us, we are told, and all the persuasion of big business has been brought to bear in an effort to get the Bill thrown out.
The tote cannot counteract this public relations exercise because it is a public body. It cannot spend money on posh lunches at West End restaurants—
§ Mr. Ashton
—and that is why the tote cannot put its case for itself. I have no real interest in racing, and I probably do not have more than one or two bets a year. But I will not be bought. I went to the bookies' lunch. I gave them the biggest pasting imaginable, and they 756 did not like it. I shot every one of their arguments down in flames. The tote cannot advertise or conduct a public relations campaign. Nor can it spend money on alcohol or posh lunches because it is a Government department. However, I am ready to speak up for it.
The Home Secretary was absolutely correct when he said that any Government must retain an interest in betting. I do not say that we have the Mafia in this country. We have nothing like it. Nevertheless, we must take precautions to ensure that nothing even remotely like it is allowed to be suspected of having a possibility of being set up.
We saw what happened under the 1961 Act. George Raft left Britain and we would not allow him to come back in. We had a proliferation of night clubs and shady roulette wheels. Roulette casinos sprang up in every sizeable town and almost in every village.
This is a peculiar industry, and I have a great deal of sympathy for the Home Secretary because it is clear that he and his colleagues have a great deal of information which they cannot tell the public. That is natural, because Ministers have to respect confidences and so on. I have confidence, even in the Conservative Home Secretary, that he will not let the industry develop as it has developed in some other countries. New York has a very strong tote. So have California, Australia, New Zealand, France and Canada. In any country where racing is developed to any extent there is a strong tote to keep out what the Home Secretary called "esoteric elements" which are directed to the gaming industry.
This is why Clause 3 is absolutely essential. I hope that the Amendments which the Home Secretary may introduce into Clause 3 will not be too strong. The Clause says that the tote can apply to establish a betting shop in a High Street. That would be an expansion of its operations of only 2 per cent. It would not go into little mining villages where miners put on five bob and the bookie finds it hard to make ends meet. If in the opinion of the local magistrates it cannot satisfy demand, that would not be a reason for refusal of an application with a view to establishing a betting shop. If it had to satisfy demand we might as well throw in the towel because one can never prove demand.
757 There are safeguards over applications by the tote, safeguards with reference to planning, nuisance or noise, and a very important safeguard is the Betting Levy Board. The tote cannot apply to establish a shop anywhere in competition with a private bookie unless that board agrees. On the board there are at present three members appointed by the Home Secretary, three from the Jockey Club, one from the bookies and one from the tote So the bookies have representation and a voice in saying whether the tote may expand or not. There is a strong restraint on the tote to conform in its applications.
It has been said that the management of the tote is inefficient. There is nothing wrong with the tote management; it is the tote market which has gone down and almost vanished over the last two or three years. It would be interesting to know how many applications have been received by the tote from employees of bookmakers who want to work for it because they are "fed up to the teeth" with working for their present employers, because by no stretch of the imagination could they be said to be good employers.
If the bookies spent more on their staffs than on lunches at the Mirabelle, it would be much better. From Church House, Dean's Yard, there came a very severe criticism of the way in which bookies treat their employees, the 50,000 in the industry who have no statutory hours, and no lunch break on a Saturday. When any of them have tried to form a trade union they have been victimised. I do not say that the whole industry is like this, but it is a highly disorganised industry which needs the competition and discipline of another employer. Often when a large bookmaker firm has caught one of its staff "on the fiddle", it has sacked the whole staff and there is no appeal. It is not a pleasant industry but a smelly industry. That is why there is a great need for public participation, control by the Home Secretary and an alternative form of betting.
I do not like the tactics employed by bookmakers who try to manipulate this House. I hope that they will not be able to manipulate the Committee, because we as democrats are here to do the best we can for the public. I congratulate the Home Secretary and his staff on having the courage to bring this Bill forward. I hope that they will not capitulate, 758 run down and ruin the tote during Committee stage of the Bill.
§ 7.35 p.m.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
It has been a pleasure to hear the hon. Member for Bassetlaw (Mr. Ashton). I think he rather spoiled his speech at the end by going a little too far in his attack on bookmakers, but he has saved me a great deal of argument in defence of the Totalisator Board. It is quite wrong for any newspaper to suggest that the board is a lame duck.
The hon. Member for Birmingham, All Saints (Mr. Brian Walden) expressed a most important point of view which has been completely overlooked. That is that we are dealing with two entirely different occupations, the occupation of a bookmaker and the occupation of a pool betting operator. This was referred to by my hon. Friend the Member for Southend, East (Sir S. McAdden). This has been totally overlooked by the Press. To be a bookmaker requires great art and a great deal of training. To be successful he must be a good operator. One cannot easily pick up the threads and immediately become an operator. Many bookmakers who fail are rapidly taken over and gobbled up by the big operators. Equally, if one is to run pool betting operations it is a good thing to have someone on the board who knows about pool betting, and at the moment this board has not that advantage.
I say this by way of prologue because I see a Treasury Minister on the Front Bench. We need not have had this Bill if the Treasury had undertaken this task. It is a truism that Customs and Excise knows very much more about betting and gaming than does the Home Office for it is not the forté of the Home Office. This was explained quite plainly to the Treasury some time ago and I think the Treasury recognised the argument that if it had decided to introduce a differential tax for off-course and on-course betting, we should not have needed this Bill. The tote could have taken money in its offices off the course and would have had to pay only the on-course tax. Then everyone interested in racing would have every incentive to go to a meeting. It is vital that we should bring people on to the course. It is essential, not only for the horseracing industry, but for greyhound racing as 759 well, that the Treasury should undertake to restore a reasonable and proper differential of not more than 2 per cent. for on-course and 6 per cent. for off-course betting.
Off-course betting is very largely in doubles, trebles, accumulators, yankees and things of that kind in which small punters are betting with mixed bets. The punter is charge right down the line on the course where the matter progresses normally, and one does not have doubles and trebles, and the percentage of the tax is relatively less than that for off-course betting. Therefore, there is a case for a differential to be applied.
The only financial figures we need to know are that the off-course sum is over £900 million while the on-course sum is only £58 million. The tote turnover is about £25 million. This is a situation in which the tote plays an almost minimal part in the over-all betting picture. The on-course money taken by betting is only £58 million. This Bill will therefore do no harm and could be of the greatest benefit to both horse-racing and greyhound racing, both of which are in extreme difficulties.
Hon. Members opposite must recognise that they are seriously at fault. In 1966, the board asked the Labour Government to act. It pointed out that it was steadily going bankrupt. It was not given the necessary assistance. In 1967, the then Home Secretary set up an inquiry, which reported in 1968. He still did nothing, although he knew that the tote was going into the red at the rate of £250,000 a year. It is now going into the red at double that amount. Last year, a number of us on this side of the House, seeing the picture, pressed first the Treasury and then the Home Office, urging that action should be taken, and quickly.
The hon. Member for Thurrock (Mr. Delargy) claimed to know nothing about the Bill, which was evident; he told us that he was going to leave the Chamber, which he did; he said that he would ask to serve on the Standing Committee, which he did, although he knows nothing about the subject, which he does not. Unless action is taken, the Totalisator Board will go bust by next spring, perhaps sooner.
760 We have faced up to this situation. I remind hon. Members opposite that it would even cost £1 million to wind up the board in redundancy payments, pension payments and so on to the permanent staff of 600, who are entitled to consideration. The decision had to be made. The small punters, who are also entitled to be considered, are entirely in favour, on the whole, of trying to retain the tote if possible, and retaining it on a fair basis.
It is wrong to suggest that the present members of the board or their staff art in any way responsible for the lack of action. It was the Labour Government who failed to take the action necessary which the present Government are taking. Furthermore, it is true to say that the board members have never been given the opportunity to have other colleagues on the board able to give them advice about how the board might reasonably expand its activities, particularly through the introduction of new schemes of pool betting into its operations. The board has had no borrowing powers. It has had no opportunity to have its own resources. It has paid out £33 million since its inception—£6 million more recently. It has had little opportunity to operate in the way it would like.
I have six proposals to put, each of them explicit and brief, about what I would like to see done in order to put the whole of racing back on the map. All save one of these proposals are the responsibility of the Home Office. The other is the Treasury's.
I want to see the board strengthened. It is unnecessary to set this out on the Bill but I would like an assurance that the board will be joined by certain people with considerable experience of pool betting. This is a very different activity from that of a bookmaker, and persons with the necessary experience could show the board how to utilise its outlets and to go in for new methods of pari-mutual betting, tierce, and so on, which could be made effective in this country. I want to see on the board someone with knowledge of greyhound racing because horse racing and greyhound racing could give each other mutual assistance. I do not think that we need to recruit Mr. Morley in order to represent the other sporting event, the Miss World competition, but I think the Bill should be amended to include the word "sporting". This 761 would, of course, cover boxing and Miss World, apart from greyhound racing. But I agree that political betting is undesirable.
I propose also that the board should have power freely to create such outlets as it requires for pool betting. This has scarcely been alluded to so far. If the board had only collecting points in various parts of the country, this would enable it to operate not merely its own jackpot but tierce with the greatest of ease. I do not think that this would be bad from a religious point of view or that it would increase that kind of betting.
We should make provision in the Bill whereby the board would be able to collect the money as is done in France, for example, for the tierce. In France, one can collect it in sub-post offices but in the main it is handled through tobacconists. All one does is hand in one's slip and someone makes out a football coupon. It is collected from the tobacconist by the tote representative and then fed into the machine so that one can operate the tierce. But a lot of outlets are needed. It is not a question of having offices. These are not required. The board could also reach agency agreements with bookmakers.
I believe also, although with great reluctance, that the board should be given the right to carry out fixed-odds betting—that is to say, to become a bookmaker. But it must be subject to the same tests as we applied to the bookmakers. The amendment of Clause 3 must be rigorous. To do this, the board must obtain the consent of the Betting Levy Board. For the extent to which it does bookmaking, and this will be crucial.
I believe that the way to deal with the loan question is for the Levy Board to give a guarantee. This will enable the tote to raise its requirement on the money market. Without such a guarantee, it would not be able to do so. That is not my suggestion but that of the Racecourse Association, speaking from its experience, so it is probably right. There must be loan, of course, and not grant.
The tote itself must cut down unecomic services in the country. It will he assisted in this if we amend Section 14 762 (4) of the 1963 Act. This is the provision whereby, if the tote allows the management of a course to operate the tote itself, all the profit must go to the board.
My hon. Friend the Member for Gains-borough (Mr. Kimball) has a great knowledge of point-to-point races and small steeplechase courses and he may be able to elaborate on this aspect. I want to see the board out of point-to-point racing and small steeplechase courses and also to allow those at hunts who want to do so to run this business themselves. Perhaps the board can supply hired plant and equipment on proper terms, possibly at a profit. This might enable ordinary race couses to obtain local licences and to make the business pay to their own advantage. At the moment, the tote is often obliged to try to supply facilities at small courses which are totally uneconomic.
I turn to the question of greyhound racing. This is still covered by the 1934 Act. It is probably not realised that, under this Bill, the Totalisator Board will have the absolute right to engage in any such sporting event. This means that it could enter shops and bet at starting post odds without paying a penny to its colleagues who operate the totalisators on the greyhound courses. This is, of course, quite inequitable. Greyhound racing is the second largest spectator sport. It has a £58 million turnover in betting, which could be substantially increased. Incidentally, the hon. Member for West Ham, North (Mr. Arthur Lewis) was quite wrong earlier in saying nothing was done. In 1971 there was an Act which assisted greyhound racing by providing for quite a large number of days of betting. In 1969 there was another Act which allowed a grant of 12½ per cent. in respect of the turnover on the tote. Here is where there can be really valuable co-operation between these two totalisators, the Horseracing Totalisator Board and the National Greyhound Racing Society, which will soon become a new club, where they can get together to their mutual benefit and to the benefit of the public. That is how it can be done.
There should be an Amendment to this Bill providing that an arrangement can be made—it can be done either in one Amendment or under arrangements—whereby the Horseracing Totalisator 763 Board will carry on its betting off-course. It will place the bets, the bets will be conveyed on-course to the Greyhound Tote and 6¼ per cent. will be paid to the Horseracing Tote Board and 6¼ per cent. to the on-course totalisator. This will mean tapping, to the advantage of both and to the benefit of racing and with increased turnover in betting tax to the Government, money which at present is going off course merely into the bookmakers' hands.
It seems to me, therefore, that if one wants to assist—and one does, because there is at the present time a steady downturn in the greyhound-racing industry; it is going down quite steadily, and if it goes on even the biggest of them will fail—the money which is bet upon the dogs off-course should find its way on to the course. To do that the Horseracing Tote Board, in the interests of all, should enter into an arrangement whereby it takes the benefit of part of the 12½ per cent., with the other half on-course. This is one way in which these other powers can operate, and there are many other ways.
One thing which one has to bear in mind as being absolutely right is that the Bill enables the Horseracing Tote Board to engage in betting overseas if the snow comes. This is vital. It would not apply only to Ireland. We could have Australian and French meetings coming in, those in the South of France, and Cognes-sur-mer, which carries on in February. This is important, and it is important that the Tote should be able to undertake this. It is important because, apart from football, which is completely out, the tote should be able to utilise these facilities throughout the year, and it is important that it should be able to bet on Sunday racing, which may be possible when we change the Sunday observance laws.
It seems to me, therefore, that although with reluctance the tote enters the field of bookmaking, I greatly hope it will be severely limited. I believe in the main that it will involve its buying into a chain of bookmakers. If it does so, I beg it to bear in mind that it will need to buy management and expertise, for to enter into the task of being a bookmaker is something I would not like to do. Whatever experience I may have 764 had of gaming—I have a fairly wide grasp of it—I believe that to become a bookmaker is something totally different from being a pool betting operator. Let us give the tote powers which I hope will be severely limited; and let us make sure that it gets the best possible management at the earliest possible moment, drawing in those who are already expert on their present form.
§ 7.53 p.m.
§ Mr. Frank Taylor (Manchester, Moss Side)
I have no special reason to love bookmakers because on almost every occasion when I have been foolish enough to plunge on a "dead cert" I have had cause to regret the investment. I am very concerned over the question of fair play and open and fair competition between tote and bookmakers.
I am especially concerned at the wording of the Bill and the thinking which lies behind the drafting, because it is obvious from the way it is drafted that there is going to be strong preference for the tote over bookmakers. That, obviously, was the thinking behind the sponsors of the Bill. Despite the partial withdrawal by the Home Secretary, I wonder whether that thinking is still there and will remain. Even if the Bill has fairer wording as between the tote and bookmakers, I am afraid that the thinking on preference will still be there and the interpretation of the Bill will operate against the bookmakers.
Two objectionable Clauses have been mentioned by many hon. Gentlemen—Clauses 3 and 5. The Home Secretary, in his partial withdrawal, said that he will probably take out the reference to the need for the tote to apply for proper authority to open a shop. But what is to happen in an area which is at present fully saturated with bookmakers' shops in view of the Home Secretary's intention to have a fair spread of totalisator shops as against the bookmakers? There will be no room for tote shops unless some influence is brought to bear to obtain licences and permits for them when an area is already saturated, unless the tote is to go out and buy on the open market, which will be very expensive.
The question of subsidising losses by the Levy Board, referred to in Clause 5, has been mentioned. It seems that the word "grant" will disappear, but that 765 in no way puts the matter right. It is possible to have loans at low interest rates and all kinds of other benefits which the bookmakers, as the alternative, will not get. The normal way of getting money in the market is to produce past trading results; and if the tote is able to get loans with a Government guarantee, that is not very different from the Levy Board giving the tote money, because if the tote shows losses the guarantees will have to be honoured. That needs to be tightened up considerably.
I am very concerned at the prospect of a loss by the tote in its new form. I understand—and I stand to be corrected if my information is wrong—that the tote appears to have run a number of betting shops in the past. I am not sure whether it did so directly or through a subsidiary, but it seems that the tote has disposed of those. I wish to know, first of all, did it own shops directly or through a subsidiary, and, secondly, what were the trading results which those shops showed? Did they show reduced or increased profits? Were they satisfactory or not? Next, why were they disposed of, and on what terms were they sold, transferred, or presented to someone?
I feel this is most important because if the tote, havin had experience of running betting shops in the past, showed unsatisfactory results, what reason is there to suppose that in future it will show better results? We must remember that this has nothing to do with giving extra rights to the tote as such. It is purely a matter of running betting shops, which are, and in future will be, no different in regard to the rules under which they run from the past. If the tote was not able to run betting shops satisfactorily in the past, what reason is there to suppose that if it now opens shops it will do better in the future?
If the tote had permission to reopen betting shops, very substantial capital investment, running into millions of pounds, would be necessary. I have heard that the tote idea was to start with about 500, not 200, but that will mean running into millions of pounds with a completely uncertain financial result. There is no certainty at all that it will make profits, as several hon. Members have emphasised. I am asking the Home Secretary to think seriously before plunging into competition 766 with experts. They are up against hard pressures and know their business. I want to be sure that the tote will be in fair competition with the bookmakers and also, if the tote runs shops, that those shops will show satisfactory trading results.
There is no reason why the tote should not achieve those objectives in other ways. One, perhaps unacceptable, way would be to let the tote be taken over and run under strict guide lines by a consortium of bookmakers or bookmakers' associations. It would bring in a certain income and there would be no risk of loss. Another way would be to allow bookmakers to run tote business on a commission basis in their own shops. In both those ways there would be no necessity to find capital investment and there would be certain profit which could be geared to what the Levy Board requires.
Nothing I have said should be taken to indicate that I am against the maintenance and expansion of the tote. I believe it is necessary. I am all for its being made into a viable organisation, and I understand that the bookmaking fraternity is of like mind. We want it to continue, we want it to be healthy and to make profits. We do not want the risks, and we do not want the Home Secretary to say that there is fair competition between the tote and the bookmakers if the tote is receiving favoured treatment. We want this to be clear not only in the wording of the Bill but in the minds of the sponsors.
I am not happy about the Bill until it is made clear that competition will be completely fair. If it is, my objections will disappear. I am sure the bookmaking fraternity has no objection to free competition, but it does not want competition slanted against it.
§ 8.2 p.m.
§ Mr. Marcus Kimball (Gainsborough)
After the excellent speeches of the hon. Member for Bassetlaw (Mr. Ashton), my hon. and gallant Friend the Member for Lichfield and Tamworth (Major-General James d'Avigdor Goldsmid) and my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies), there is little more to say Hon. Members who argue against the Bill forget that the tote is a lame duck because Parliament has clipped its wings so that it is not able to fly in modern 767 conditions. In retrospect, it is amazing that the tote has managed to continue for as long as it has, and has succeeded in making such a valuable contribution to racing.
I share the apprehension of the hon. Member for Leeds, South (Mr. Merlyn Rees) about embarking on further betting legislation, particularly now that the House has been deprived of the experience and knowledge of Mr. Richard Stanley who sat as the hon. Member for North Fylde. I hate to think of debates on betting and gaming without his skill, knowledge and guidance. I also shudder to think of the errors made in the 1961 and 1963 Acts which resulted in such disaster. Those Acts had side-effects which were never intended by Parliament. I hope the Home Office knows what it is doing.
I sincerely trust, if the activities of the totalisator are to be extended, that we shall have assurances that there will be capable staff and direction. I share with the hon. Member for Bassetlaw the gravest worry about the danger of a bookmaking monopoly, with the three big bookmaking firms getting hold of all the betting.
Since 1963 the bookmaking profession has become respectable. The Treasury claim to be surprised by the amount which it collects in betting taxes. The Levy Board has gradually succeeded in raising the contribution. The ninth levy, up to 31st March, 1971, was more than £3 million. As the hon. Member for Bassetlaw said, this is not a large contribution to racing when taken as a percentage of the betting turnover. In France and the United States, where there are tote monopolies, the amount of money going back into racing is between 6 per cent. and 12 per cent. compared with the half of 1 per cent. of the betting turnover that comes to racing from the bookmaking fraternity in this country.
I have only one small practical experience of the amount of money bookmakers used to be prepared to give to racing until there was a stick with which to beat them and a yardstick with which to judge them. When I was an undergraduate involved in the university point-to-point, the tote used to give us £400 if we had five races. If we succeeded in getting enough entries to make a better 768 day's sport for the punters, and if we were able to bring more people to the meeting by getting more horses and splitting the open race, we used to get £600 from the tote. What does one get from the bookies? One is lucky to get £25 or £30 for six races. That shows the contribution which the bookmaking fraternity used voluntarily to make towards the welfare of racing.
I do not believe that punters as a whole are getting such a good deal from the bookmakers as people think. Bookmakers are not as popular amongst the discerning as it is sometimes thought. Even without a bookmaking monopoly, the bookmakers are beginning to squeeze the odds. Taking a 10-horse race with three favoured horses, it is probably fair for the favourite to start at evens. The second favourite is now put at two-to-one and the third at three-to-one, whereas they should be put at three-to-one and five-to-one.
The hon. Member for Bassetlaw quoted from a letter published in Sporting Life on 18th January. The letter went on to prove that during the 1971 flat racing season the tote had beaten the bookmakers in the odds it was giving to the racing public. In 451 races the tote paid out more on winners than did the bookmakers.
It might be advantageous for the Totalisator Board to look at the way in which the tote works in other countries. I am told that one of the most successful totes from the punters' point of view is in Hong Kong. There are two pools, not just one pool for three horses. All the money for a win goes into the winning pool and all the place money goes into the place pool We should consider this idea for our tote, as it would enable better odds to be given.
The tote provides for the small man going on the race course the only way of being certain that he will be fairly treated. It is important, therefore, that we should keep the totalisator in being. The House would be wrong to be persuaded that the way to expand the tote's activities is by the jackpot and other devices. When the jackpot first came out it was the biggest talking point on every race course. But now, according to the expert betters—and I am not one—the jackpot is not nearly as popular as it used to be, or as attractive to the betting public.
769 My hon. Friend the Member for Isle of Thanet spoke of allowing small race courses and, in particular, small point-to-point meetings, to run their own tote. The Amendment which he seeks to put down to the Bill in Committee is exactly what is needed. It is far too expensive for the tote to run at a whole series of point-to-point meetings in the West country or in Scotland, even with voluntary labour at those meetings.
I do not think that the House realises that the Betting Levy Board, through the tote, gives to the small point-to-point races over £31,000 in any one year varying from a grant of £120 to the Ayrshire Yeomanry point-to-point in Scotland to the Western Hunt point-to-point in the West of Cornwall. These are substantial amounts to these small concerns for a day's racing. They are racing days at which the attendance of the tote must mean a loss to it as it is so organised. I entirely endorse what was said by my hon. Friend the Member for the Isle of Thanet about the organisation of the tote in more rural areas.
We must keep the tote in order to avoid a bookmakers' monopoly in this country and to give the Government a stake in the betting industry so that they know what is going on. so that they have a thermometer with which to judge the temperature of the industry and to be absolutely certain that the Betting Levy Board has sufficient information about betting to ensure that it is able to fix the levy at the proper level.
I sincerely hope that we shall expedite the passage of the Bill to the Statute Book.
§ 8.11 p.m.
§ Mr. J. R. Kinsey (Birmingham, Perry Barr)
It is usual at the outset to declare one's interest. On this occasion my personal interest is very small. Unfortunately, I do not own any race horses, but I have noted that hon. Members who do have been here in quite good numbers today to make their points.
I am not a betting man. I go in for a big race flutter the same as millions of other people in this country. I consider that 50p on that occasion is an extremely large amount to bet. Therefore, I am one of the small punters who look more to a low stake and a high return, which 770 only jackpot or football pool betting is able to provide.
I consider the Bill the most anti-Conservative, anti-small business-measure which any Government could bring in. It was not the William Hills, the Ladbrokes or the Corals who were contacting us in their numbers in our constituencies; it was the small bookmakers who were representing to us their views and fears about the tote entering the High Street in competition against their businesses.
It is absolutely shameful that it has been the Opposition who, in the main, have been speaking in support of the small businessman and against the Bill, apart from my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) and two others of my hon. Friends. It was and is almost a Birmingham contingent line-up from both sides of the House against the Bill.
There is a past criterion on this matter which the House ought to recognise.
§ Mr. Ernie Money (Ipswich)
I hope that the enthusiasm of my hon. Friend and his hon. Friends will not lead them into putting all their money on Birmingham City against Ipswich Town on Saturday, because we all know that that is a foregone conclusion.
§ Mr. Kinsey
It would be through the football pools that I would place my money, not on the Floor of the House. I have confidence in Birmingham. I do not think that that intervention was worth while in view of what the result will be.
I never thought that I should find myself nodding agreement with the Opposition Front Bench and shaking my head at my own Front Bench. It was a most unusual position in which to find myself.
I am not satisfied with the Amendment promised by my right hon. Friend. Let us look at it. Clause 1, agency basis. What is meant by "agency basis"? Who will have the agencies? Which preferential bookmakers will get the agency basis? Not all of them. It will be just a few. My right hon. Friend must give us more explanation on this matter.
Turning to Clause 3—I read from the Explanatory Memorandum—we are taking out,a betting office licence may not be refused".771 and replacing it possibly with building in a preference for the local magistrates to operate. What is the difference? I cannot see any difference. It will be given in any case. Why do we not tell all the other people who want betting shops that we will give them preference?
Turning to Clause 5, we are apparently to consider that in Committee. That simply is not good enough. If my right hon. Friend could see a satisfactory answer, he should give it to us today.
In the short time that I have been a Members of this House, the past 18 months, I have served on many Committees. I have been worked very hard as a backbencher.
The first Committee was on the Coal Industry Bill, to hive off the non-related industries to the coal industry. The miners' representatives on the other side of the House turned. We had all the Lefties of the day shouting out against the Government. I served on that Committee to carry out the Government's work, and most approvingly I did it.
The second Committee was on the Transport Holdings Bill, to denationalise Thomas Cook. The transport workers' representatives and the Lefties again were up in arms against that Bill, but I was pleased to support the Government.
The third Committee was concerned with the denationalisation of the State breweries in Carlisle. The hon. Member for Carlisle (Mr. Ron Lewis) was up in arms about that. Again I suported the Government in denationalising that undertaking. My right hon. Friend knows that I was pleased to support him, and I believe that he was pleased to have my support on that occasion. We went through the long weary hours of the night. Why? Because the Opposition had decided, line by line, Clause by Clause, comma by comma, to fight the Bill—and indeed they did.
But in today's move in this House there has been half-hearted opposition. There has been support for the Government's action; no vote. This is a public shame. Secretly, and wholeheartedly, the Opposition support this Measure. There is danger in that, because the Bill plays into their hands. Future Home Secretaries will have it all on a plate, because the "nationalised bookies" definitely comes 772 in under the Clause 1 procedure, as the hon. Member for Birmingham, All Saints (Mr. Brian Walden) pointed out. He made no secret of that.
The Government should be alerted to this open show of feeling by at least one member of the Opposition in that direction. I am not entirely blaming the Home Secretary, who has had his hands pretty full in this Parliament. To be kind to him, this Bill has been slipped in, as was said by my hon. Friend the Member for Edgbaston. It has been left to others to devise the Bill on the tote working in their own interests. Civil servants are always inclined to Government control. Lord Wigg is not exactly a Tory philosopher. All these people must have shared at some time and been concerned in devising the Bill. They must have been consulted. They have presented a Bill of very doubtful parentage. They have not created a Conservative Bill by any means, otherwise my hon. Friends would not have been so concerned about it. But my hon. Friends have shown their dislike of the Bill. That is the reason why we have had a promise to amend it. As I said, it is not enough.
It is amazing that there was no consultation with the other people concerned who have expertise on this matter, the bookmakers, until after publication of the Bill. They were hanged before they could appeal. My right hon. Friend the Home Secretary would never have allowed that on any other occasion. It was wrong for him to have dealt with them so.
We have not considered the Bill enough. I have listened with interest to my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies). He had many good things to say. But even at the end his rather involved interpretation of greyhound racing and how we could get over the problems has nothing to do with the Bill, although if he wants to introduce it as an Amendment he will take the opportunity. The other things he was saying had a good basis for tote betting.
In our interpretation of what bookmakers wanted we should have listened to them, because they want to keep the tote system. The key is an alternative betting system. We want an alternative system to bookmaking. We do not venture out to an alternative system 773 when we advocate an ordinary betting system for the tote. This is not an alternative system to that available at present. Pool betting, well conducted, is an alternative. That is where we should be looking.
The tote has been losing for the last two years. It has been no great shakes for the past two or three years. It has been overtaken in the contributions from the bookmakers. The tote has made no contribution to the Levy Board in the past two years. The tote blames television. I was amazed to read that show jumping had risen to an eminent place in sport simply through television. How can television operate in favour of one sport so much but in the disfavour of another? This needs to be examined.
The Bill is not an answer. It is obvious that the tote has been very badly managed. I think that all hon. Members will agree about that. It has done nothing in the face of all these things.
§ Mr. Carlisle
Will the hon. Gentleman accept that the bald fact is that attendances at racecourses have dropped by about 20 per cent. over the last four or five years.
§ Mr. Kinsey
But what has the tote done to attract custom in the face of all this? Television has worked in favour of other things. Why has it worked against the tote? It is no good hon. Gentlemen shaking their heads. If the money was not going into the totalisator, what has it done? It has increased the betting stake. People now have to pay 30p, or six shillings, to bet on the tote. That is far too much for most people. The tote has done nothing about multiples or jackpot betting, or about taking in money. It still has a large staff, but has not got down to settling how to take the money in. If it could do so now and look forward to a further extension by the possibility of borrowing money, raising it on the market, why has it not done so in the past to streamline itself, as others have done. It would have been in a monopoly position to do so. I would venture that many a bookmaker would willingly swap businesses with the tote to gain that monopoly position. We should then be saying how well he was doing.
The tote has failed to make itself pay. It is the same in other nationalized 774 undertakings. It should not be said that the tote is not nationalised, because it could not operate unless the Government had given it permission. The Bill proves that. It is not advocating less activity but more activity. The tote wants more activity. Where it wants this activity is in amongst the betting shops, amongst the competition. But the tote has been there before. I quote from a pamphlet issued by the bookmakers:Once before the Tote invested a considerable amount of money in buying betting shops from bookmakers and opening others of their own. They failed to appreciate the dangers of the cash betting offices, lost money and subsequently chose to transfer the control of these shops to a public company bookmaker.My right hon. Friend is living in a peculiar world if he considers that we shall solve the problems by putting the tote back in that position. We shall worsen them. If the tote has a monopoly and cannot pay, with no bright ideas to help it, no quick movements to solve problems—I emphasise the quick movement, because this is a field of operation in which quick action is imperative; one's stock in trade is money, and one is at risk as soon as one's door is open—we have to ask where the operators are coming from.
The hon. Member for Bassetlaw (Mr. Ashton) quoted from a directive that the bookmakers were bad employers. He criticised long hours and the amount of time the staff had for meals; but this is what has made the bookmakers' profit. Office hours are wanted for the tote. It will not do. It will not pay. This policy is a criterion for failure. The Home Secretary must not allow us to throw the baby to the lions. I do not want that. The bookmakers agree that there is a need for the tote as an alternative system. When at last the bookmakers were consulted they put forward a plan to the tote board that would give it a guaranteed £825,000 net profit each year, before corporation tax. This plan was put forward oh the basis of opening up the bookmakers' offices to take jackpot bets, something that has not happened before. This could then have taken place, providing enough money to make the tote viable. That would seem to solve the problem.
The tote would welcome the scheme, and my right hon. Friend the Home 775 Secretary seemed to like it. But he still thinks he needs the Bill to underpin it. He cannot have his bun and his ha'penny. He cannot allow it to happen by moving people in and giving the Board powers to enter the high street. It could be a dangerous power in the future. That explains the mild opposition we have seen from some Labour hon. Members.
The Tories are giving a Heaven-sent opportunity to the Socialists. While the Socialists want to see a monopoly bookmaker for the State, the bookmakers are prepared to meet competition, as long as it is fair. But they are being asked to finance it out of their own pockets, as Clause 5 clearly shows. Whatever the cost, it will have to be financed through the Levy Board, through which the money comes not only from the tote but from the bookmakers and the betting public. If there are losses they will again be met in that way.
My hon. Friend the Member for Isle of Thanet indicated that we shall build a guarantee into the Levy Board's proposal to support the tote in raising money on the open market. That will not do, because the guarantee is one of the worst forms of financing anything. Again, it will be the bookmaker and the betting public that will have to support it. To use a good old Americanism, we are making the bookmakers and the betting public real patsies.
§ Mr. Kinsey
They are people we set up to knock down, and we are setting up the bookmakers and the betting public.
This will be the first time any Government have carried out nationalisation without compensation. The Socialists have said they will do it, but here are the Conservative Government doing it. Not only are we failing to compensate, but we are to make the bookmakers provide the money to bring about their own demise. It is amazing. We are patting them on the back, calling them our friends and leading them to the chopping block.
The bookmakers have much to offer, and we should listen to them. We should now redress our failure to consult them in the first place. They have created a successful business. A Tory Measure changed the pattern of betting and led 776 to its becoming respectable in this country. It no longer generates the feelings that gambling always used to generate. Let us not spoil that situation with the Bill. I urge my right hon. Friend not to drive betting underground, which he might well do. Let us talk, listen and produce something better than the Bill. I wish there were an opportunity to vote against it, because I would do so.
§ 8.33 p.m.
§ Mr. Michael Cocks (Bristol, South)
I had not intended to intervene in the debate, but I cannot resist the temptation to follow the hon. Member for Birmingham, Perry Barr (Mr. Kinsey), who is a very ardent advocate of private enterprise and a successful exponent of it.
The Bill was only recently brought to my notice by a public relations exercise. Like many other hon. Members, I had an invitation to a blow-out in the bowels of the House, and this morning I had a copy of Sporting Life in my post. I do not normally have that literature. It reminded me of when I was a member of the Standing Committee considering the Licensing (Abolition of State Management) Bill, when I used regularly to receive copies of the Morning Advertiser, as did the hon. Gentleman. The stage was set for substantial pressure groups.
I ask myself why the present P.R. exercise had been mounted and what effect it was supposed to have on hon. Members. I am very glad that this time the Under-Secretary is on the side of the angels. He had the very unpleasant job of piloting the Bill for the abolition of state management through Committee. He was then doing a demolition job on a successful State enterprise, but today he is standing up for the tote. I welcome this. I urge him to resist the presures to which he and other hon. Members are being subjected and to stand firm on the Bill, which I believe is a good Measure.
§ 8.35 p.m.
§ Mr. Ernie Money (Ipswich)
Like my hon. Friend the Member for Birmingham, Perry Barr (Mr. Kinsey), I do not have to declare an interest in this matter—save in the most tenuous way. I found myself, on a basis of somewhat involuntary odds, coming into the House at the last election as an outsider. I understood from some of my 777 constituents that I was at 300 to 1. That led to one or two of them making a fairly nice deal on the result. I suspect that that is a kind of result which cannot be got on the tote, but to that extent, and to that extent only, I declare an interest in the Bill.
I came to listen this afternoon most carefully to the statement made by my right hon. Friend the Home Secretary in some doubt as to whether I could support the Bill or not, because the two matters on which I felt great anxiety, both as far as the industry is concerned and as far as my constituents are concerned, were Clauses 3 and 5. Having spent a good deal of my professional life involved in licensing in one way or another, I must say that I was totally taken aback by the introduction of the new principle of a compulsory licence, which seemed to me to fly completely in the face of a carefully built up and very sophisticated system by which it has been possible for licensing justices and licensing committees to work in the knowledge of the feelings and attitudes in their own areas, wholly on the basis of knowledge of an area, which has been a criterion which has always seemed to me right, whether applied to liquor or gaming or betting.
I am glad that my right hon. Friend has been able to give an assurance over that, particularly because I think there has been a good deal of misunderstanding in the public mind about it. A lot of people thought that all that was to be introduced here was a tote shop, as such, in the High Street, rather than a full-scale betting office licence. and this is something which has been obscured in a good deal of the discussion which has taken place about the Bill. I am particularly glad that my right hon. Friend has been able to give an assurance that the basic principles of licensing will still be maintained in this matter when the Bill is in Committee, and upon recommendations put forward by the Government.
I am particularly glad because the suggestion of compulsory licensing was not only inequitable but, I think, dangerous, in that the whole appeal system is now to the Crown Court rather than to quarter sessions, that involves far larger areas. That seemed to me to militate against the old system of the 778 licensing committee in the first instance, and also through quarter sessions, having close knowledge of the area involved. This is one of the matters about which I came here to listen most carefully to my right hon. Friend, and certainly, on the basis that I am quite sure that he means what he says, that this matter will be changed in Committee, I fully accept the undertakings and safeguards which he has put forward in that regard.
The second matter which caused me a good deal of concern was the element of unfair competition involved in Clause 5, and I hope very much that the words which my right hon. Friend used this afternoon mean that the bookmaking industry will be protected from unfair competition by changing the scheme of grants into a scheme of loans, and a scheme of loans which means just that, and not a hidden grant which will be written off in due course.
There are the strongest grounds for feeling that both sides of the betting amenities available to the public serve the public very adequately at present. Over recent years in fact we have had a good deal more service from the bookmakers than from the tote. Bookmakers have provided a good deal more to support the industry in the shape of their contributions to the levy. As my hon. Friend the Member for Birmingham, Perry Barr suggested, there has also been a total change in the attitude of the ordinary individual to the licensed betting office and the bookmaking fraternity as such. One of the "Georgian" poets wrote about the prospect of a departing bookmaker,Alas, what boots it that my noble steed, Chosen so carefully, the field outran.I had not reckoned, bookie, on thy speed. The proper study of mankind is man.Those days are well past, and allegations about welshing bookmakers are generally very much a thing of the past.
This is a maligned industry. It has been misunderstood and criticised unfairly by those who have approached it with a fixed moral prejudice rather than with an understanding of the service that bookmakers give to the public and the contributions that they make to the industry. To that extent, I am sure that there is room for both the bookmakers and the tote.
779 My hon. Friend the Member for Gains-borough (Mr. Kimball) put forward the argument that it was necessary to go on maintaining the tote as such because of the amount of money which came from it to support small racecourses. I quarrel with my hon. Friend in that respect. My belief is that probably we are nearing the situation in this country where we have too many racecourses. With greater ease of communications, I believe that it is more necessary to have money put into the bigger courses, where it is needed, than to put it into supporting large numbers of small meetings which do not appeal to the public and do not provide to the public the facilities and amenities which justify their being kept alive.
When this Bill goes into Committee, the House will be watching the extent to which Home Office Ministers intend to justify the doubts which were felt about whether this was a Measure which interfered with the system of licensing, with the rights of the individual to have a choice and with the basically equable working of both sides of the profession.
I accept that what was said by my right hon. Friend today was meant. To that extent, I withdraw the original opposition that I felt to the Bill, though not entirely my doubts. I am sure that what is done in Committee will justify my withdrawing both.
§ 8.44 p.m.
§ Mr. Marcus Lipton (Brixton)
When the Home Secretary was introducing the Bill, I intervened to ask him why it was felt necessary to spring it upon the House without any previous warning or discussion. The right hon. Gentleman's answer was that that would have given rise to all sorts of financial difficulties. He painted a picture of the horrific possibilities which might have ensued if there had been any discussions with the interests concerned. However, I still believe that much of this debate and argy-bargy and some of the pressure which has been applied in the last week or two could have been avoided if someone in the Home Office had taken the trouble to have friendly discussions with representatives of the bookmakers. I cannot see what harm would have been done if such discussions had taken place. They are normal before a Finance Bill and many other projected pieces of legislation. A 780 lot of trouble could have been avoided had a similar course been followed here.
It is true that the Home Secretary, sensing the danger of revolt in the Government ranks and possibly in the Labour ranks, has announced some concessions. They were not officially announced until today. By a remarkable degree of prescience on the part of the political correspondent of the Guardian, as long ago as 28th January he announced exactly what the line of the concessions would be. He said:Mr. Maudling is now expected to tell the Commons that the Government is ready to table amendments to Clauses 3 and 5. The first would strike out the proposal to allow the tote to establish betting shops without first obtaining a magistrate's licence in the same way as private bookmakers. The second amendment, it is understood, would delete the Bill's original proposal to permit the Horse Race Betting Levy Board to subsidise tote betting shops.It will be interesting to see in what way these pledges and undertakings, which were known to The Guardian long before they were known to any hon. Member, are carried out. Before the Bill reaches the Statute Book it will have to be amended in more ways than one to secure the unanimous support of the House. I look forward with interest to seeing the results of the forecasts of Mr. Ian Aitken of The Guardian. If he has backed two winners in one article that is not bad going for any political correspondent.
I must reserve my judgment until I know what the Government do in Committee. If the Government are sensible and the Bill comes back to the House suitably amended, I shall have no hesitation in supporting it.
§ Mr. Lipton
The hon. Lady could not have come into the Chamber at a more fortuitous moment because she has heard some words of wisdom with which, for some reason, she finds herself in agreement. This is the first time that she has ever agreed with anything that I have ever said on any subject.
§ Mr. Marten Maddan (Hove)
The hon. Gentleman spoke of a degree of agreement. Does he consider that there is a reasonable degree of agreement between himself and the hon. Lady, or is there unanimous agreement?
§ Mr. Lipton
I would hesitate to pronounce on anything that the hon. Lady says. She is well capable of looking after herself without any assistance from outside, particularly from this side of the House. The Bill will be changed considerably in Committee, I believe, and then we shall be in a better position to judge. If the Government behave and listen to the numerous representations and adopt a reasonable and sensible approach, they should have no difficulty in getting the Bill through.
§ 8.50 p.m.
§ Mr. John Page (Harrow, West)
The hon. Member for Brixton (Mr. Lipton) was rather late coming under starters' orders, and he bagged the beginning of my speech. I wanted to draw attention to three very successful consultative documents which the Secretary of State for Employment has put out with huge success. There are also consultative documents on V.A.T. which have changed the Government's attitude and that of other people. This is an occasion on which there could have been more consultation. It would have taken a lot of sting and argument out of the proceedings but it would also have made the Committee stage much duller.
This has been almost a Friday morning seminar, with cross-party debate. It is wonderful to find myself agreeing so much with the hon. Member for Basset-law (Mr. Ashton). The Under-Secretary will have a frisky ride in Committee. I hope that he will not be thrown and will get his Bill in the end—although it will be very much amended.
I endorse completely the amazement of the hon. Member for Birmingham, All Saints (Mr. Walden) at the Conservative Party propping up a lame race horse. I liked his view of the unlikely prospect of success of an institutional bookmaker.
The hon. Member for Bassetlaw was absolutely certain that the tote was needed. I believe that we need it, but I like to think of it as a pool tote. I do 782 not agree with those, like my hon. Friend the Member for Birmingham, Perry Barr (Mr. Kinsey), who seem to think that it does not matter whether we have a tote or not—
§ Mr. Kinsey
My hon. Friend must not misrepresent me. I made it clear that an alternative system had been put forward to save it, which would give us a tote which I would like to see if I were to have any bets—a jackpot pool system.
§ Mr. Page
I will read my hon. Friend's speech tomorrow. It was a little too esoteric for me. He has become unnecessarily complicated.
My hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) made a most interesting speech. If he had left out one sentence, I could have gone with him all the way. The tote can and should exist and I think that it will thrive. We need a strengthened board. Although some more members are to be added to it, it would be fair for the Jockey Club to lose one or two of its present nominees.
If we have a more sympathetic approach from the Treasury and if the tote takes advantage of the opportunities for pool betting, it could turn into a profitable venture. We need more comfortable race courses and larger gates. We must try to keep the best horse racing in the world in this country instead of seeing so many of our best horses going abroad. We should also back up a flourishing breeding industry. The new board should immediately be strengthened by people with knowledge and success in the pools industry.
The Tenth Report of the Horserace Betting Levy Board pointed out on page 40 that of the total prize money—and it is prize money that keeps the horses racing—the owners contributed 30 per cent. and the racecourses 30 per cent. I would therefore like to see representatives both of the Racehorse Owner's Association and the Racecourse Association on the Board as well. Their knowledge and information would be extremely valuable.
I cannot go along with my right hon. Friend happily in the idea of the board 783 going in for starting price betting. I suggest, therefore, that that part of Clause 1 which allows S.P. betting be put in cold storage for a few years and activated, perhaps by order, if the new ideas of the reformed board prove not to be successful. I believe that in the coming two or three years the tote could find that it has an important part to play, and of course the greatest ally for a successful tote is a sympathetic Chancellor of the Exchequer.
It is the most absurd idea in the world to think that one can have a successful nationalised bookmaker. This organisation does not have the right kind of expertise and people to run a gambling organisation. A nationalised bookmaker is likely to be as successful as a milk-drinking crocodile. I hope that my right hon. Friend will put on one side this part of the Bill but will go ahead with the rest.
§ 8.58 p.m.
Mr. Martin Maddari (Hove)
The apearance of this Bill, whether or not after consultation, drew my attention once again to the subject of betting, a subjcet in which, frankly, I do not have any great interest.
In so far as I have any interest, I start with a rather puritanical prejudice I may think that there is too much betting, particularly off-course betting, for the social health of the nation.
I apologise for not having been in my place to hear my right hon. Friend's speech. I was engaged upstairs in a Standing Committee.
I have been glad to hear that my right hon. Friend intends to move some Amendments and I am sure that they will help to make the Bill more acceptable to me, particularly from the point of view of the tote having to go through the usual hoops when it wishes to open a betting shop otherwise we might be providing an in-increase in the volume of betting facilities whether or not they are required.
I understand that my right lion. Friend is not prepared to remove the provision which allow the tote to operate S.P. bets. This is unfortunate because this provision appears to extend the tote's operations into a sphere where it is neither necessary nor desirable.
784 I understand that an Amendment is to be moved to Clause 5 to ensure that money lifted out of the bookmakers hands shall be only loaned to the tote rather than given to the tote. I suppose that is a certain concession, but this brings me to a fundamental point which one cannot help mentioning in discussion on this Bill. It is the difficulty which the Government have got themselves involved in over horse racing and betting. I find it rather mysterious and difficult to understand why the clever and ingenious hardworking people in the horse-racing and betting industry cannot regulate their own affairs without the Government regulating them for them in this way and intervening to arrange the finances of these various interests. I therefore think that this Bill may be regarded only as an interim Measure while we consider further what the rôle of government and Government institutions should be in this matter.
The only people who have come to see me about this Bill are on-course bookies. They, of course, are an essential attraction in the racing scene and just as essential as the tote. They are labouring under conditions just as difficult as, if not more difficult than, those under which the tote labours. I shall be told that what can be done to help them would be to increase the differential of tax in their favour and that this cannot be done in this Bill but we shall have to wait for the Finance Bill. When that comes we shall be told that while dealing with V.A.T., corporation tax and many other things, there is no time to consider the differential. I hope that in reply to the debate the Under-Secretary will be quite precise in indicating the Government's intention about this.
It has been said by my hon. Friend the Member for Harrow, West (Mr. John Page) that the root of this question is attendances at races and so forth. I think it cannot be denied that whereas in a new sport, such as go-carting, television may excite more interest, racecourse owners find it difficult to negotiate with television interests suitable fees for the televising of races. That is because there are only a few television interests but a whole multiplicity of racecourse owners. It would be very difficult for them to go on strike. One can hardly imagine Royal Ascot or 785 Brighton Corporation, which owns a race course, taking part in a strike. Owners should band together and not allow themselves to be picked off one by one, so that collectively they could secure adequate television fees in the same way as betting interests have a kick back which helps to finance the industry.
In discussing this Bill one cannot help considering matters surrounding it, but I shall go no further on that in view of the time. I exhort my hon. Friend, when he replies to the debate, to pick up some of the points which I have tried to make.
§ 9.5 p.m.
§ Mr. Arthur Davidson (Accrington)
Reluctant as I am to say so, the person I feel most sorry for today is the Home Secretary. It is not a state of mind I am particularly used to but I must admit it because whatever he had done today he would not, I am convinced, have won the support of his back benchers. If he had, on taking office, found that the tote was a thriving concern, that it had made a vast profit, we would have been having a very different sort of debate. I am sure that we would have been discussing how best the Government could sell it off to private enterprise, to the bookmakers, because that is the inevitable conclusion to be drawn from some of the speeches by hon. Members opposite.
§ Sir H. d'Avigdor-Goldsmid
The hon. Gentleman may or may not know that bookmaking interests have made an offer for the tote, so he is not using a very strong argument.
§ Mr. Davidson
It might not be very strong, but some of the arguments used by hon. Members opposite have not exactly been strong either, although I exclude the speech of the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid). Member after Member opposite has said, "We must keep the tote going because it is very important". They have told us that the bookmakers also want a tote. Indeed, the bookmakers I have spoken to have told me that they want a tote. But not one hon. Member has come up with any practical suggestion as to how the tote can be kept in being except by this Bill. That should be the whole point of the debate.
786 To some extent, the right hon. Gentleman has himself to blame for the trouble he is in. He introduced the Bill on a quiet Friday rather stealthily, for all the world as though he were ashamed of himself for doing so. Perhaps he thought that no one would notice it, but he should have known that if no one else did my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) would—and, of course, within a few hours my hon Friend had put down a Motion drawing attention to the inequities, bad timing and irrelevance of the Bill.
Of course my hon. Friend the Member for Thurrock (Mr. Delargy) is quite right. It does have a certain quaintness, to say the least, that we should be discussing this Bill when so many much more important and far-reaching events are happening elsewhere. Nevertheless, we are discussing it, and the fact is that whoever had been in Government would have had to introduce a Measure along these lines if the tote was to be saved. That should be stated fairly and squarely.
I agree with what my hon. Friend the Member for Bassetlaw (Mr. Ashton) said in his interesting and forthright speech. We are discussing not an irrelevant industry but one which has the biggest turnover of any in the country. He gave the figures. The total turnover on horse racing in the last year was nearly £1,000 million—and that is only the legal betting. Most of us know that a great deal of illegal betting goes on as well, and probably one could add 25 per cent. to the £1,000 million to cover that. The turnover on dog racing was about £305 million. So, whatever else can be said about the state of the industry, there is no shortage of punters. Enough people want to bet on horse racing.
One of the surprising things about the debate has been that we have had great arguments in favour of bookmakers, and criticism of them, and speeches putting forward the splendours of the tote, and speeches condemning it. But we have heard very little about the people who make the racing industry prosper, who make these enormous profits possible; that is, the punter, the ordinary man in the street. What we should be concerned about is how we, as a House, can bring in legislation that will as its main concern benefit the punter and make sure that 787 if he wishes to bet he gets the best possible odds in the best possible conditions.
Why do we all say we need a tote? We need a tote because we need competition—and I would have thought that that is a word which would strike at the hearts of all hon. Gentlemen opposite. It is a good Tory philosophy. I find it extraordinary that some bookmakers who really have had a completely free hand since 1960 when the new Gaming legislation was brought in, in facilities to open betting shops, should somehow cavil at the prospect of a little competition from a statutory board, the tote.
Why do we need the tote at all? If I was a small bookmaker, I would be a lot more perturbed at competition from the big public companies that run the three biggest bookmaking concerns in this country than I would be over competition from the tote. If we did not have a tote and did not have an alternative form of bookmaking, then have no doubt at all that the betting industry would be dominated ultimately perhaps by one large concern. That would not be good for the public and, I would have thought, in the long run would be bound to be the death of the small bookmaker.
After all, Ladbroke has said that by 1973, I believe, it hopes to open something like 800 betting shops. William Hill has increased the number of its betting shops from one to about 500 in the space of three or four years. This has all been done because they have had access to the most profitable part of the betting market, which as everybody knows is cash betting. It is the small punter from whom bookmakers make the biggest profit. The small punter invariably bets in cash. He has not a credit account. For hon. Members to "kid" themselves that somehow the tote can compete with bookmakers without having access to cash bookmaking at S.P. prices is really delusion. If they want to keep the tote in being, they have to say just how they will do it.
A lot has been said about the fact that the bookmakers have offered to bail the tote out of its difficulties by operating, or helping the tote to operate, a jackpot system. I will deal with the deficiencies in tote management a little later. Severe criticism can be levelled at the management of the tote.
788 If the bookmakers are serious about helping the tote to operate the jackpot, will they do it as principal or agent? In other words, will they have to put a limit on the amount of money to be staked on the jackpot? I have heard reports, true or not, that the bookmakers offered a top limit of 5p on every bet on the jackpot. That would not go anywhere near getting the tote through its difficulties.
The Home Secretary should not present the Bill as the sole remedy for getting the tote out of its difficulties. He should also do something about reorganising the management of the tote. Why has the tote been so unimaginative in the betting schemes offered to the public? Why have not forecasts on any race been offered? The tote is eminently able to do this. Why have not doubles been offered on the second and third races, the third and fourth races, which would be attractive to punters? Why has the tote run a jackpot on all the races on the card when a large number of people do not turn up until after the first race? It would be common sense to run the jackpot on the second to the seventh races. Many more people would join in. There are many criticisms to be made of the day-to-day administration and lack of imagination of the management of the tote.
We are told that the tote is necessary because it will ultimately pay money to the Levy Board and racing will benefit. That is true. It has made substantial contributions to racing. One of the greatest contributions it could make to racing would be to get rid of the stuffy, upper-class image of the Jockey Club It is incredible that in 1971 it should be an event of fantastic revolutionary importance that women trainers are allowed to operate under Jockey Club rules. Why are there not more fresh faces in the Jockey Club? Lord Wigg has done a tremendous amount for racing because he is different from the stuffy, antiquated person who has for far too long dominated the councils of the Jockey Club. Perhaps the Under-Secretary of State will bear those observations in mind. It may be that he has plans for revolutionising the Jockey Club.
One reason for the difficulties of the tote is that it has had to make payments 789 to the Levy Board between 1962 and 1969. They were a heavy burden, as the Home Secretary was right to point out. The tote paid about £5¾ million in those years. It contributed about 25 per cent. of the total income of the Levy Board, although it was responsible only for about 4 per cent. of the total turnover. No concern could be financially prosperous in those circumstances.
Many criticisms have been made about the management of the tote, and some are no doubt justified. I do not know. I have never met the gentlemen who form the management of the tote. But I think that the tote has had to operate under extraordinarily difficult circumstances under which no firm of bookmakers would contemplate operating.
The Home Secretary said that, because of the appalling financial position of the tote, he was unable to find any person to serve on the board, which is why a vacancy has existed for about two years. I should like to know what plans the right hon. Gentleman has for filling that vacancy and what sort of criteria he will use for appointing people to the hoard; indeed, from what group or groups of people he will draw, what experience they will have, and what overall plans there are for reorganising the tote.
A lot of criticism has quite rightly and understandably been levelled at the now notorious Clause 3. It is an offensive Clause in many ways. Hon. Members on both sides who criticised it were right to do so. The House ought to bear in mind the resentment among a large section of the population about the proliferation of betting shops up and down the country. We would he foolish to ignore that resentment. Many of my constituents, as indeed many constituents of right hon. and hon. Members on both sides, object to betting shops, to Bingo halls and, indeed, to amusement arcades opening up all over the place. We shall have to give very careful consideration to the exact wording of Clause 3 and how it is to operate.
However, I must say—one has to be utterly honest—that it is difficult to see how the main purpose of the Bill will be achieved without something like Clause 3. It is no good saying that the tote should have the right to operate as bookmakers 790 to take starting price bets and to deny it the outlet for doing so. It must have an outlet, and Clause 3 is perhaps the only way of providing it, offensive as it is in many ways.
How many betting shops does the Under-Secretary envisage the tote opening in the next few years? My inquiries indicate that it will be very lucky if it has the equipment and the staff to open about 25 in the next 12 months. My inquiries also indicate that if it is to be financially viable as a concern it will need about 100 betting shops. Indeed, it is doubtful whether, with or without a watered down Clause 3, it will have the facilities to get anything like 25. So is the Bill worth while? Are we to see a position in 12 months or two years when the Home Secretary will have to come to the House again and say that the Bill is not effective, that the tote cannot operate under it, and that more money is needed to bail it out?
I give warning that in Committee we shall go into this Clause, the viability of the tote and the tote's prospects very carefully. I hope that it will be a most constructive Committee stage. The Clause, which empowers the tote to borrow from the Betting Levy Board, has been severely criticised. People have said, "Why can it not borrow money from the City or somewhere else?" Contrary to what has been said, the tote does have the power to borrow. It is in the Act. But, in view of the appalling financial state of the tote, no one would remotely consider lending it money. I would not lend money to the tote, neither at present would any respectable financial institution. What the whole House wants to see is a position whereby the tote is reorganised on a firm businesslike footing so that it can, with the facilities provided by the Bill, go to the City and borrow money if necessary. Without the Bill its prospects of doing so are next to zero.
Finally, much criticism has been levelled at the bookmakers for the way they have conducted a sort of lobby campaign. If I were a bookmaker I should feel apprehensive in some way about the Bill. Bookmakers have every right to express their fears and objections. I consider that they have done this in a perfectly open and above board 791 manner. I have no criticism of the bookmakers in that respect. But I feel that they have rather overstated the apprehensions that they need have about the tote being in competition with them.
I hope that the Bill reaches the Statute Book. I hope that it will be considerably amended, if we can find a sensible way of amending it; that as a result it will act in providing a genuine competitor to the bookmakers; that the racehorse industry will benefit, and that those benefits will ultimately be passed on to the people who ought to receive them—the punters, the British public.
§ 9.28 p.m.
§ The Under-Secretary of State for the Home Department (Mr. Mark Carlisle)
I apologise to the House in advance, for I shall speak fairly quietly and hope that my voice will last until ten o'clock. I am afraid that my anti-influenza injection did not succeed.
We have had so me fairly rumbustious speeches during the debate. Hon. Members on both sides of the House feel very strongly about some of the Bill's provisions. The prize for hyperbole must go to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Kinsey), who described the Bill as nationalisation without compensation. I can understand people objecting to and expressing their views on certain provisions; but to describe a Bill the purpose of which is to remove the statutory fetters that have existed on the Totalisator Board, so as to allow it to compete on the open market with the private bookmakers as being nationalisation without compensation is slightly exaggerating the situation.
I am sure that I shall carry with me all hon. Members in congratulating the hon. Member for Accrington (Mr. Arthur Davidson) on his first winding-up speech from the Front Bench. It is a great pleasure to me to be the person to congratulate the hon. Gentleman, as we started at the Bar together and entered the House together. We look forward to hearing the hon. Gentleman in Committee and on many other Home Office matters in the near future.
§ Mr. Davidson
May I just say that the hon. and learned Gentleman lost his £7 apprentice allowance far more quickly than I did.
§ Mr. Carlisle
The purpose of the Bill is not to attack the private bookmaker but to provide a viable future for the tote, which, for all the reasons my right hon. Friend the Home Secretary gave, we believe to be in the interest of racing, the punter and society generally.
I think that it was my hon. Friend the Member for Colchester (Mr. Buck) who reminded the House—and it is no criticism of the bookmakers to say this—that in considering the history of gaming legislation any Government must appreciate the potential danger if the whole of commercial gambling gets into a very few hands, without any form of adequate control. That is why the last Government felt it necessary to set up the Gaming Board. For gambling on horse racing we have never had, and have never been tempted to have, such control as exists in gaming. We have always relied on the competition provided by the tote with those in the private market. The purpose of the Bill is merely to restore the financial position of the tote, which has been losing money over the years, to enable it to compete with the bookmaker on fair terms and to provide the public with an alternative method of betting.
In an extremely powerful and well-argued speech, the hon. Member for Birmingham, All Saints (Mr. Brian Walden) suggested that my right hon. Friend was being contradictory when he used the terms "compete" and "an alternative service" with regard to the totalisator, and that we looked upon them as meaning the same thing. The Bill envisages the possibility for the tote to compete in starting prices, should it choose to do so, but also to provide an alternative method of betting to the public by means of totalisator betting. We must ask whether it would be able to provide an adequate alternative system of pool betting without being given the opportunity to earn some of its revenue in competition in starting-price odds with the bookmaker.
The hon. Gentleman suggested that the proposal was a breach of faith in that in 1928, when the tote was set up, it had been made clear that the tote facilities would be limited to pool betting. He drew various analogies and said that cries of dissent would be coming from these benches on this side of the House if we 793 had allowed statutory bodies to expand in other ways.
I would point out to the hon. Gentleman that he ignored one fact, which is, that Parliament itself specifically changed the whole competitive set-up by itself legislating in 1960 to permit, for the first time ever, the betting shop for the private bookmaker. At the time when the tote was set up, all off-course betting was illegal, and one had the tote with its pool betting providing an alternative service to that of the private bookmaker with his starting price betting on the race course.
What we did in 1960 was to change the whole balance by legislating specifically to allow the bookmaker to have the off-course betting shop. With respect, I do not think that, powerful as the argument appeared, the hon. Gentleman's analogy was accurate, as I think it avoided this one vital fact of the statutory difference we have made in regard to this matter since the time the tote was formed.
§ Mr. Brian Walden
All that the hon. and learned Gentleman is saying, as he will see if he thinks about it afterwards, is that, whether the change was done statutorily by this House or not, circumstances have changed, and have changed in favour of the private bookmaker—as circumstances have changed adversely against the coal mining industry. What would hon. Members opposite say if the N.C.B. decided to sell petrol on the basis that, after all, it is a fuel anyway, just as the Home Secretary is saying, "After all, this is betting anyway"? That is the analogy I gave the hon. and learned Gentleman. It is simply that circumstances have varied. Whether the House was statutorily responsible for it or not, in fact has nothing to do with it.
§ Mr. Carlisle
With respect, it has. I appreciate the analogy, but the point I was trying to make was that the cause of the change of circumstances in this case was a deliberate decision of this House to allow the private bookmaker to go into an area into which, up to 1960. he had not been allowed to enter—
§ Mr. Carlisle
Legally. I accept that. Of course, there was illegal betting, but 794 I do not think anyone would seriously suggest that illegal betting, although substantial, was of the same degree of turnover as exists in the betting shops today.
On the whole, as the hon. Member for Accrington said, most of the speeches we have heard on both sides of the House have, with certain honourable exceptions, given support to the principle of the Bill, of putting the tote in a position to survive and to provide competition, to provide an alternative; and the real issue, and the questions which have been asked, and the dispute which has arisen, are about the method by which it is intended to achieve the end. It is clear, after what has been said from the Front Bench opposite, that the Bill will get an unopposed Second Reading tonight but that we are in for an interesting and heavily argued Committee as to what is the right way in which to put the tote in the position which the Home Secretary has decided it is necessary for it to occupy if we are to see the continuance of a viable tote.
Before I turn to that, let me take up one or two points made by the hon. Member for Leeds, South (Mr. Merlyn Rees) about what the Totalisator Board is. The board is a statutory corporation and, therefore, can do only what its specific statutory powers, given by this House, enable it to do. At present those powers are limited to conducting pool betting on approved horse races, to negotiating bets at tote prices, and, for the purpose of its main functions, to holding land, to borrowing, to making loans. It can do it through subsidiary companies as long as they are acting within the statutory powers given to it, and it is right that originally it set up the company which has been referred to in order to deal with its credit betting side.
As for parliamentary control, the annual accounts are laid before Parliament, and my right hon. Friend the Home Secretary appoints the chairman and the board. But we have to remember that basically it is a commercial organisation which has been created as a statutory non-profit-making corporation really for social reasons, and I doubt whether there would be any advantage in having day-to-day responsibility for its actions to this House by a Minister.
§ Mr. Merlyn Rees
The hon. and learned Gentleman is right in that last statement, but what is the line of communication when, every so often, things go wrong and it has to go to the Home Office? Who is monitoring on the way through, bearing in mind that eventually it is to the Government that the organisation comes? I accept that the day-to-day administration should not be in the hands of the Home Office, that it is not a nationalised industry, and so forth, but what is the line of communication which enables the Government to keep an eye on what is going on?
§ Mr. Carlisle
All that I can say is that obviously a close relationship exists at personal level between the members of the board and officials of the Department concerned.
The other general point that was raised concerned the appointment of members of the board and the qualifications that are appropriate. Obviously I cannot comment on the criteria which have been applied in the past. At the moment, there are three members and one vacancy on a board of four. Two were appointed during the lifetime of the previous Government. One was appointed then but may well have been recommended for appointment just before the 1964 General Election.
My right hon. Friend has made it clear that one of his desires under Clause 2 is to create an opportunity for the provision, if necessary, of a strengthened board in numbers. He intends to bring on to the board people with an interest in racing, a knowledge of finance, and a knowledge of betting. I take the point that my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) made about the need to remember that one wants people with a knowledge of pool betting rather than merely a knowledge of starting price betting.
The hon. Member for Accrington asked why there had been a vacancy for so long. The hon. Gentleman misquoted my right hon. Friend slightly. My right hon. Friend did not say that we had been unable to fill the vacancy as such. His point was that it was impossible to approach people of the sort we wanted to serve on the board before we were in a position to say what the powers of the board would be and what job they would 796 be required to do. My right hon. Friend said that, for that reason, he felt that it was right for the Bill to be read a Second tune before attempting to fill the vacancy which exists on the board at the moment.
I return to the point about how one achieves the end of providing a viable tote. If it is to be given the opportunity to do business in the highly successful off-course market and to achieve the objects that the Government have in mind, three factors have to be taken into account. It must be given the power to operate with much more commercial freedom than it has at present. It must be given access to the off-course market. It must have access to capital to enable it to implement its plans. Of those three matters, greater commercial freedom is covered by Clause 1, access to the off-course market is dealt with in Clause 3, and access to capital is covered in part by Clause 5.
If one wants to dwell on the reason for the decline of the tote, it is that in the past the tote has had to rely, and has always relied, on on-course betting and credit betting for its turnover. What has hit the tote, as the hon. Member for Bassetlaw (Mr. Ashton) so accurately said—at least this is my impression—is a combination of the existence of betting shops and televising of racing. This has led to a drastic reduction in the number of people attending racecourses which is where the tote used to get its turnover. Since 1966 racecourse attendances have dropped by about 20 per cent., or over a million in overall numbers. In the early 1960s a day out at the races for the average member of the betting public meant joining the crowd at the race course, standing alongside the rails or in the stands, despite the weather, and going either to the bookmaker or the tote to lay a bet between races.
A day at the races for the average member of the public in 1972 means calling into the betting shop and then sitting, feet up, in front of the television with possibly an occasional trip to the betting shop between races. It is this reduction in the number of people attending which has meant a drop in the on-course betting while off-course betting shops have flourished. In 1966–67 the tote turnover was £40.4 million. In 1970–71 it was £28.9 million. It ma be asked, "How can the tote lose 797 money?" It is because if turnover gets so low that overheads cannot be met, money is lost, although in theory it can be argued that it is impossible to do so on any individual race. It is my right hon. Friend's view that if the tote is to be kept viable it must be permitted to penetrate into the off-course market.
§ Mr. Walden
How does that conclusion follow from the analysis? If it is television which is having this damaging effect on attendances, why did not the racing authorities—like the football authorities—allow only so much live coverage? Surely the most sensible thing to do would have been for the racing authorities to place some restriction on television.
§ Mr. Carlisle
That may be. It may be that the racecourse authorities decided that it was in their interests to enter into various agreements with the television companies. Since 1966 racecourse attendances have dropped 20 per cent. and the turnover has dropped from £40.4 million to £28.9 million.
§ Mr. Davidson
Would the hon. and learned Gentleman agree that if it were not for tote facilities at some of the smaller tracks, attendances would be even smaller, because it is the opportunity of betting in small sums which attracts the punters, particularly the women punters? Bookmakers who, understandably, complain about the difficulties of on-course betting would have far more to complain about but for the tote facilities.
§ Mr. Carlisle
The hon. Gentleman is quite right. The tote, through its presence on the smaller courses, has probably reduced the fall in attendances and in that way enabled some courses to remain open. Although a great deal could be done by extending some of the tote's existing forms of betting, my right hon. Friend is satisfied that it must penetrate the off-course market to be successful.
Hon. Members must face some practical facts in regard to Clause 3. It is very difficult for anyone to open a new betting office today. The existing bookmakers have established a closed shop, in effect, in any particular area. 798 That is not a criticism but simply a fact to be recognised. Any hon. Member who has appeared in betting applications in the courts must accept that any new application is regularly opposed by the bookmakers in the area on the grounds that the demand is already adequately met.
In the two fields in which we apply control of the retail outlet—liquor and betting—the purpose of the control has never been to prevent competition, any more than we would prevent competition among grocers' shops. The purpose is a social purpose. In betting, this means preventing the proliferation of betting, shops and the over-encouragement of gambling generally.
§ Mrs. Knight
Does that mean that there is any possibility of setting up State-owned liquor shops as a form of competition?
§ Mr. Carlisle
I do not think that the Government have any such intention. My right hon. Friend has said that he is reviewing whether there are any longer social needs for controlling off-licensing of liquor. These would not be State-controlled betting shops and this is not State money. Accepting that it is a social purpose which justifies the control, in Committee we must balance the weight to be attached to the need to prevent an extension of gambling against the social need of keeping the tote viable and preventing gaming interests from falling eventually into very few hands.
§ Mr. Money
Does my hon. and learned Friend agree that if Clause 3 were unamended and the tote were to go into this business as bookmakers as a commercial undertaking and any of these entries—which, as Clause 3 stands, it would be allowed to have almost as of right—proved to be non-viable, it would be able to go to the market and achieve a transfer, probably to the big bookmakers of whom my hon. and learned Friend has been speaking?
§ Mr. Carlisle
I wish to make it absolutely clear that I was making a general point about the difficulty, to which the hon. Member for Accrington referred, of abandoning Clause 3 entirely.
My right hon. Friend said earlier that we proposed to amend Clause 3 which, as 799 drafted, would remove any form of control on demand from licensing justices. We accept that this was the wrong approach. The approach we proposed to recommend to the Committee—and I accept that it must be argued out in detail—is to restore to the licensing justices the power to grant licences, but to require them, in deciding whether the demand provision is met, or whether there are adequate facilities in the area to meet the demand, to take into account the need to provide facilities through the totalisator as well as through private bookmakers.
I repeat, in connection with Clause 3, that whereas I fully appreciate the strength of feeling that various people have expressed against the Clause in its present form, and while I have made it absolutely clear that the Government are prepared to amend it in line with what my right hon. Friend stated in his opening remarks, it is necessary, nevertheless, to realise the practical fact, the difficulty that faces a new body such as the totalisator in going successfully into the off-course market.
What my right hon. Friend said earlier probably answered, even before they were made, the criticisms that were made of Clause 5. As he said, it is clearly the intention of the Government to listen to what is said about this Clause, to look at its provisions and to consider Amendments limiting the width of the Clause.
If the tote is to succeed, it must have access to capital. I do not take the view of the hon. Member for Leeds, South that it cannot get it through the market. I agree that many people might not at this moment wish to lend money to the tote. But if, as we believe, the Bill will provide a more viable tote, then it will be able to obtain its capital through the market.
I commend the Bill to the House. I appreciate that many points have been raised which will need to be argued in Committee. We shall listen with great care to what is said. We want the support and co-operation of the bookmakers with the tote to continue, but we believe that the framework of the Bill is necessary to provide a viable future for the tote.
§ Question put and agreed to.
§ Bill accordingly read a Second time.800
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).