HC Deb 05 March 1980 vol 980 cc620-32

Motion made, and Question proposed, That this House do now adjourn.—[Mr. MacGregor.]

10.23 pm
Mr. Bruce George (Walsall, South)

I am delighted at long last to be able to bring the subject of the tote to the Floor of this House. We all know how difficult it is to obtain an Adjournment debate. It involves a combination of chance four days a week and Mr. Speaker's personal choice on the fifth day. Certain comparisons can be made between that and the way in which the tote has been operating. I hope that I shall not be admonished for taking that comparison too far.

As regards the tote, the element of chance and equity has been undermined by the number of occasions on which the personal whim of the chairman of the tote has intervened. It has also been undermined when employees—and we are told that they are low-level employees—doctor the dividends. That was first revealed in The Sporting Life in July of last year. The chairman subsequently called it the "Carlisle cock-up". An inquiry was wrung out of the tote and the Home Office. The findings of Mr. Aglionby, a recorder, spoke of the "misplaced enthusiasm" of tote staff.

He said: The opportunity existed therefore, for this procedure to he abused by the staff of Tote Credit Limited. It was abused … Advantage was taken … to transmit to the pool further bets which bore no relation to the bets received from the clients and which were intended to reduce artificially the dividend. However, we are told that nothing illegal took place. The Home Secretary made a speech yesterday in which he said: But since all the necessary action has now been taken, the matter should be regarded as closed. He may regard it as closed. However, although this stink may not have entered the nostrils of those specially invited racing establishment figures at yesterday's tote lunch, it will linger for a long time in the noses of punters. They have been swindled out of their rightful winnings. The chairman, like some wounded animal, has lashed out at those who dare to criticise him. The Sporting Life is held to be in the pocket of the bookies. I am said to be one of those "Left wingers." Some members of my constituency party will be delighted to hear that. When I questioned Mr. Wyatt about his famous 50-1 bet on Troy, he accused me of "petty sniping" and of conduct unbecoming a Member of Parliament. There are many others that I would look to as models of behaviour, before the chairman of the tote. If everyone to the left of him is a Left winger I share that distinction, along with the vast majority of the adult population of the United Kingdom. In his speech yesterday the chairman called my probing an "offensive and irrelevant attack."

My probing is not intended as a general criticism of the staff. To say that would be grossly misleading.

I have spoken to many of the staff. All of them I spoke to have contacted me and are continuing to do so. They do not reckon that I am undermining them or questioning their integrity. It is not Lord Wigg, The Sporting Life or I who is "creating an unpleasant atmosphere." Apparently we, "the perpetrators", are said to be mean-spirited as well as absurd.

I shall ask the Minister the questions that remain unanswered. First, why has no one at Tote House, except possibly the tea boy, taken any responsibility for the after-time bets scandal?

Second, why does Mr. Wyatt compare the practice of his predecessor, who ensured that all off-course bets were included in pools, with a system that he inaugurated which included bets only with decisions taken after the results were known?

Third, was Mr. Wyatt guilty of defrauding off-course bookmakers when he personally raised the win dividend over Marquis de Sade at Royal Ascot 1976 from 41p to 47p? Was that not a clear breach of section 14(3) of the Betting, Gaming and Lotteries Act?

Fourth, is it right, in a nationalised industry, for the board and senior executives to have credit accounts with their own organisation when junior employees are not allowed to bet in cash? Surely that undesirable practice might understandably lead to public suspicions.

Will the Minister make inquiries and ascertain whether it is true that a board member put £500 on his own horse with Tote Credit Ltd? If that is true, who instructed the control room at Tote House not to do anything with the money and not to hedge it over the course? That shortened the starting price for the horse and, indeed, it won. Over £1,000 was won from the tote.

Fifth, did Mr. Wyatt obtain odds of 50-1 from the tote against the Derby winner Troy nine months before the race? The best price quoted elsewhere amounted to considerably less.

Mr. Hugh Fraser (Stafford and Stone)

Surely the hon. Gentleman must know, if he follows racing at all, that at the time one could get any price one liked on Troy. He had just been beaten and was way out. One could ring up and get any price one liked.

Mr. George

Others argue quite differently.

Sixth, why is the tote management so frightened of its employees communicating with the press? A directive has gone out threatening dire consequences to anyone who does.

Seventh, why has "misplaced enthusiasm" been accepted as an excuse for fraud in a nationalised industry when elsewhere those responsible would have been in court?

Eighth, why have the views of the Law Officers of the Crown not yet been obtained to ascertain whether they believe that a breach of statutory requirements on common law occurred?

Ninth, last week the Prime Minister referred to so-called social security scroungers, and said that fraud was fraud wherever it occurred and that it should all be treated in exactly the same way. Why should the tote be allowed to defraud punters? Does partial restitution expiate that guilt?

Tenth, why have not all the 4,355 races between 1 September 1978 and 16 July 1979 been audited to ascertain where fraud took place, instead of only the sample of 16 per cent. of dual forecasts and 23 per cent. of win pools, as chosen by Deloittes, the accountants? The public has been swindled by a public body, and even if it was a minute occurrence, as the chairman alleges, surely the public, especially those swindled, have a right to know.

Eleventh, how much was the managing director of Tote Credit, Jeff Wells, paid when he resigned last month? If he resigns, is he entitled to redundancy payment, or what was his recompense?

Twelfth, does the Minister believe that the management of the tote has been conducted to the standard expected in public life?

Thirteenth—and this a very important question—did the chairman receive a copy of Mr. Aglionby's report? If so, does that mean that evidence given in confidence to the recorder was made available to the chairman? I understand that in a written answer to Lord Wigg, the Under-Secretary of State for the Home Department said that the chairman did receive a report. That is serious if it is true. It means that evidence that was given by tote employees is available or has been made available to the chairman. That, I suggest, is something that the chairman should not have seen. If it is true, I should like to know whose responsibility it was that the report, with confidential information, was divulged to the chairman? It has been thrown in my face many times when I have called for the report to be published that the evidence was given in confidence. If that principle of confidentiality has been breached, it is a serious matter.

The next question that I wish to ask relates to the infamous events at Royal Ascot in 1976. Is it true that the documentation relating to Royal Ascot is no longer available? I have been told, and I should like to have it authenticated by the Minister, that documents have been shredded so that evidence relating to the number of dividends doctored personally would not come out. I understand that that documentation was not signed by the control room manager, Mr. Dickie King, who ought to have signed it.

The racing public, I believe, owe a debt of gratitude to The Sporting Life and to John McCrinick for the revelations. Although they may not put Mr. McCrinick at the ton of the chairman of the tote's popularity book, those revelations earned from his peers the title of campaigning journalist of the year. One could speculate how long these malpractices would have continued had they not been revealed in July of last year.

If the chairman defends himself by saying, as he has done, that private bookies have their crooked staff, I should like to tell him that I expect higher things from a public body. We are told that the tote makes a profit. If one looks at its position and the number of betting shops that it has, one sees that those profits are not exceptionally high. To seek high profits as the justification for what went on is quite unsatisfactory.

I do not want to draw the comparison too far, but my mind returns to those sycophantic journalists surrounding President Nixon, who justified what he had done by saying that he was very successful in his foreign policies. The chairman may or may not have been the most successful tote chairman, but the wrongdoings going on within his organisation should have been known to him. He should be full-time, not part-time. If there were wrongdoings, it was the responsibility of the chairman, the board and senior executives to find out long before they did. We are told that ignorance is bliss, but in a court of law it is no defence to plead ignorance of the law.

Reading the speech that the chairman delivered yesterday, I could not help remembering something that I was told by one of the tote employees. It was clear from that that what the chairman has been saying, including what he said yesterday, is not entirely spot-on in terms of its truth.

I restate my demand that the chairman should be sacked, although the likelihood of that has receded now that he has the full confidence of the Home Secretary. Public confidence will not be restored until he goes. Organisations damaged by scandal rarely recover public confidence without major changes at the top. This episode may be closed in the Home Office's view, but for others this sordid saga awaits a proper, honourable and final outcome.

10.36 pm
Sir Timothy Kitson (Richmond, Yorks)

We are all grateful to the hon. Member for Walsall, South (Mr. George) for raising this matter, but one must be careful not to exaggerate.

I agree with the hon. Gentleman that it is probably unwise for the members of any organisation to bet with it. It happens within bookmakers' organisations, as it apparently happens with the tote. I think that this is mistaken. I do not think that directors of Ladbroke's or Hill's should bet with their company; they should bet outside. It would be much better if members of the tote were to do that as well.

We all know that if we ring up a friendly bookmaker and ask him about a price in a race he may give us half a point or a point better if he owns the firm. He is not working against his shareholders; he is working only against himself. The chairman of a large organisation can get that if he rings up his ante-post clerk and asks "What price can you give me on Troy or Hawaiian Sound?" I backed Hawaiian Sound at 66-1 for the Derby, and Mr. Woodrow Wyatt got only 50-1 on his horse; his won and mine came second. I think on reflection that it would probably be better if people did not bet with their own organisations against their own shareholders, or against the tote.

A great deal of explanation has been produced by the report. I am basically satisfied with many of the points that are made.

Mr. Walter Johnson (Derby, South)

In newspaper contests of any sort—whether predicting the result of a race or whatever—the staff of the newspaper concerned are forbidden to enter. I think that the point here is the same. We should try to emphasise to the chairman of the tote that there should be no participation by him, senior members of the board or members of the staff, and that their betting facilities should be withdrawn. I think that that would be the right way to deal with the matter.

Sir T. Kitson

I agree, and I think that hon. Members on both sides of the House agree. That would eliminate any criticism that can develop from the remarks of the hon. Member for Walsall, South.

However, we have been assured that what happened cannot happen again, and we are all gratified by that. It is wrong to juggle with dividends. We should not complain on behalf of our constituents when the tote raises dividends, although I believe that it works against bookmakers who are licensed to bet at tote odds.

I should like to make one point. I have looked carefully at the legislation on the tote. I cannot see any suggestion that dividends can be altered. The right hon. Member for Birmingham, Small Heath (Mr. Howell), who was the Minister responsible for sport, knows, as I believe I know, that nowhere in that legislation is it suggested that dividends can be altered. It does say that deductions can be altered. The tote is entitled to deduct its take from the pool, but the punter has to be advised what that deduction is. There is no way, at any stage of a race meeting, in which that deduction can be altered. To say that it can be altered is wrong. I am pleased that we are now told that it cannot happen again.

The punter is entitled to know, as with football pools, what the proprietor deducts, what the taxman takes and what remains in the pool to split. It is exactly the same with the tote. People betting on the tote must know what is the deduction in tax and what are the deductions in takes for the charges of the tote. Those figures should not be altered. People are also entitled to know, and do know, that the percentages on first and placed horses are set out clearly. Those figures should not be altered. It would be interesting to know whether it is possible. Any loophole should be stopped.

10.42 pm
The Minister of State, Home Office (Mr. Timothy Raison)

Before replying to the arguments and the allegations of the hon. Member for Walsall, South (Mr. George) on the subject of the Horserace Totalisator Board, I should like to say a word about the constitutional position of the tote and the responsibilities that the relevant legislation imposes on the Home Secretary.

The tote board is constituted under the Betting, Gaming and Lotteries Act 1963, although it has existed in one form or another since the Racecourse Betting Control Board came into existence in 1928. The board has a statutory monopoly of pool betting on horse-racing on approved horse-racecourses and also has authority to act as a bookmaker. It is free to regulate its own business within the requirements of the law such as are contained in section 14 of the 1963 Act.

The responsibilities of the Home Secretary in relation to the tote are of a limited nature. The chairman and members of the tote board are all appointed by the Home Secretary, but my right hon. Friend has no responsibility for the employment of the board's staff. That is all I shall say of the statutory position.

I shall now turn to the matters raised and the inquiry by Mr. Francis Aglionby, a recorder of the Crown court, on the tote board's procedures for the inclusion in its on-course pools of bets made off the course. This inquiry, as the House knows, was commissioned by my right hon. Friend the Home Secretary at the request of the chairman of the tote board following allegations last July about the transmission of off-course bets to the on-course pools. In announcing the setting up of the inquiry, my right hon. Friend gave an assurance that the findings would be published. The findings were, indeed, published on 4 February in a reply to a written question by the hon. Member for Walsall, South.

Since the 12 paragraphs of the findings have been published in this way, in the Official Report, I do not propose to recite them all here. Regrettably, Mr Aglionby found that an improper practice of omitting losing money which normally would have been transmitted before the race had, on some occasions, been adopted.

Some employees of Tote Credit Limited transmitted to the pool bets which bore no relation to the bets received from clients, and this was done for the purpose of artificially reducing the dividend. Fifteen out of 697 forecast pools examined by the tote board's auditors were certainly affected in this way. Mr. Aglionby also found that the procedure by which bets laid off by outside bookmakers for inclusion in the pool were transmitted to the course was abused on some occasions. The abuse occurred because not all losing bets were put into the pool. Six out of 995 win pools examined were affected in this way.

It is a matter for great concern that these events should have taken place, and my right hon Friend would not for one moment wish to minimise their seriousness. It is also right to point out that the serious malpractices which occurred did not, so Mr. Aglionby found, arise out of a desire for personal financial gain and that no individual in the tote benefited.

Moreover, Mr. Aglionby found that the chairman and members of the tote board, the chief executive and other senior officials were ignorant of the abuses which took place. It has been suggested that, if the board did not know of these abuses, it should have done. It is not, however, surprising that the board was unaware of the abuses, since most of the small number of dividends which Mr. Aglionby found to have been improperly reduced by a significant amount were not, on the face of it, lower than would have been expected. The malpractices occurred on a small scale and over a limited period. The transmission of bets before September 1977 was conducted properly.

What the board did, immediately the abuses came to light, was to alter its procedures. Mr. Aglionby examined the new procedures and was satisfied that they were entirely fair. Following the publication of Mr. Aglionby's findings, the board took appropriate action as regards the staff concerned. The managing director of Tote Credit Limited, who was suspended, has subsequently resigned and the junior staff involved have been reprimanded. The tote has emphasised to staff that engaging in transmission or attempted transmission after the "off" is an offence for which they can be dismissed. The board also published full particulars of the occasions on which Mr. Aglionby found that tote dividends had been improperly reduced, and announced that it would be prepared to make good the losses of any persons who could prove that they had these winning bets.

There have been suggestions that, in addition to publishing Mr. Aglionby's findings, my right hon. Friend should publish the entire report, or even that he should publish all or some of the evidence given to the inquiry. Those who have urged this course on my right hon. Friend, however, fail to recognise that persons giving evidence to the inquiry were assured that what they said would be treated in confidence. I understand that Mr. Aglionby decided to give this assurance so that all those whom he interviewed would feel entirely free to tell him all they know of these unfortunate occurrences. If that assurance had not been given, Mr. Aglionby might not have had the benefit of all the evidence which was given.

Mr. Walter Johnson

The hon Gentleman must be aware that the staff of the tote board have been advised that they should make no comment to the press or anybody. They have been told that if they do so they are under the penalty of dismissal. That is absolutely ridiculous in this day and age and something should be done about it. Otherwise, there will always be the suggestion that there is a cover-up.

Mr. Raison

I was coming to that point. However, it must be a matter for the management of the tote itself rather than for my right hon. Friend.

In his statement to this House on 4 February, my right hon. Friend explained that Mr. Aglionby had had the benefit of a special audit carried out by Messrs. Deloitte, Haskins and Sells. This audit was a very extensive operation lasting four months, and the sampling procedure was specifically designed to bring to light instances of improper reduction of the dividend as a result of the inclusion of off-course money. There is no reason to think that the audit conducted by Deloitte has not succeeded in identifying all the cases in which the dividend was improperly reduced by any significant amount.

A good deal of publicity has been given to the fact that the chairman of the tote raised one of the tote's dividends at Ascot in June 1976. That was mentioned in the House. He did this in exceptional circumstances, when the favourite had been withdrawn from the race and at a time when the tote was operating a system of variable deductions from its win pools. These were deductions to cover the board's expenses and liability to pay duty and levy. The variations were made according to various formulae which were different for the different pools with the general objective of making the tote's prices compare favourably with starting prices. This system was subsequently discussed, as the House knows, by the Select Committee on Nationalised Industries, and in May 1977 the tote changed the system so that there is now a flat-rate deduction from all win pools. Moreover the chairman has assured my right hon. Friend that at no time since June 1976 has he or any other member of the board ever altered any other dividend, nor will they ever do this in the future.

It has been suggested that some action should be taken against the tote board. It has been suggested this evening that my right hon. Friend should dismiss the chairman or that the board should be charged with conspiracy. I think we need to keep a sense of proportion here.

The inquiry found that a very small number of dividends had been improperly reduced. The board was unaware of this at the time that it occurred, but when the irregularities came to light last July, and before the inquiry was set up, it changed the procedure so as to make it impossible for the malpractices to recur. It has since taken appropriate action in regard to the staff concerned. It has invited claims from punters who, if they do not obtain satisfaction from the tote, may have their claims referred to the editor of The Sporting Life or to Tattersalls, whose decision is final. I see no basis here for my right hon. Friend to take any action whatever against the tote board.

Equally, I see no grounds for instituting any further inquiries. As I have already explained, the sampling methods used in the special audit were such as to bring to light all cases in which dividends were significantly affected by off-course money. Absolutely no evidence has been produced of any other irregularities. Indeed, almost the only new development since the publication of Mr. Aglionby's findings has been the disclosure, to which I have already referred, that at Royal Ascot in 1976 the chairman of the tote increased a dividend.

In the remaining few minutes I shall try to answer some of the specific points which the hon. Gentleman listed. He asked whether it is right in a nationalised industry for the board and senior executives to have credit accounts with their own organisation, when junior employees are not allowed to bet in cash. That was a point to which my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson) referred. It is true that members of the board may bet with the tote, and such bets are treated in precisely the same way as bets from the public. The board sees advantage in being able to test the tote's services in this way, and my right hon. Friend does not think he would be justified in initiating action designed to alter the board's practice in this respect.

I was asked whether Mr. Wyatt obtained 50-1 against the Derby winner Troy nine months before the race from the tote, when the best price quoted elsewhere was 25-1. I understand that this bet was placed at a date when no ante-post lists had been published. These odds were available from the tote at that time to any member of the public who asked for a bet on Troy. The hon. Gentleman also asked about the press, and I have tried to answer that.

I was also asked why "misplaced enthusiasm" has been accepted as an excuse for fraud in a nationalised industry while elsewhere those responsible would be in court.

The Metropolitan Police discussed the matter with officers of the tote after the seting up of the inquiry was announced, and the conclusion was reached that, on the information available, there were not sufficient grounds for a police investigation. The Metropolitan Police have been informed of Mr Aglionby's findings.

I was asked why all the 4,355 races between September 1 1978 and July 16 last year have not been audited to ascertain where fraud took place, instead of the 16 per cent. of dual forecasts and 23 per cent. of win pools as sampled by Deloitte. The answer is that the audit was a very extensive operation lasting four months, and the sampling procedure was specifically designed to bring to light instances of improper reduction of the dividend as a result of the inclusion of off-course money. Further auditing of the pools would not be justified.

I was asked how much Tote Credit's managing director, Jeff Wells, was paid when he resigned last month. That is a tote staff matter about which my right hon. Friend has no details and no responsibility. I was asked whether the management of the tote has been conducted to the standard expected in public life. Mr. Aglionhy found that the chairman and members of the tote board, the chief executive and other senior officials were ignorant of the various abuses, and my right hon. Friend has not felt called upon to take any action as regards the board—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at seven minutes to Eleven o'clock.