POOL BETTING DUTY

HC Deb 16 July 1990 vol 176 cc790-5

Mr. Tom Pendry (Stalybridge and Hyde)

I beg to move amendment No. 4, in page 2, line 36, leave out '40' and insert '37'.

Madam Deputy Speaker

With this we may take Government amendment No. 1, and amendment No. 5, in page 2, line 38, leave out '28th May' and insert '5th April'.

Mr. Pendry

I am aware that amendment No. 4 will not strike much of a chord with the Government. However, their amendment deals with my proposal in amendment No. 5—apart from replacing "5th April" with "6th April"—and meets the points that I made and my hon. Friends raised in Committee on 28 June. We are grateful for that: it seems that at long last there are some genuine football buffs in the Treasury team.

I first raised the issue on the Floor of the House on 8 May. The Economic Secretary informed me then that he would enter into negotiations with the Football League and the pools promoters, and would make an announcement in the House shortly. He has now done precisely that. I am also grateful to him for giving me notice last Thursday of his intention to meet the points that I had put to him.

I welcome the Government's sensible move. It is imperative that our football clubs be given as much as possible of the £100 million that the Government propose to provide over the next five years up front, so that they can meet the tough timetable laid down by Lord Justice Taylor for them to adapt their grounds to comply with the recommendations in his report. For some clubs taking part in the UEFA high-risk matches, the deadline could be as close as 1993, and for all first and second division clubs it is August 1994.

Unfortunately, the Treasury's good sense has not been matched in the Home Department, which has been guilty of appalling complacency and incompetence in its failure to set up the Football Licensing Authority in time to meet its own deadline—a failure that was admitted today in a letter to me from the Minister of State, Home Office, Earl Ferrers. I hope that the Home Secretary will ensure—as a matter of the utmost urgency—that that vital body is set up without delay so that work can begin on ground improvements. Already, I fear, a whole year has been lost from the timetable.

We would be deluding ourselves—and every football supporter—if we believed that the Government's proposed reduction of the pool betting duty to 40 per cent. would be enough to address the financial problems that face our national game.

Mr. Beith

As the Minister for Sport is present, would it not help us to consider the pool betting aspect if he intervened at some point—perhaps in the hon. Gentleman's speech—to tell us what on earth is happening about the setting up of this body?

Mr. Pendry

Normally I would respond to such a question, but on this occasion I must come to the defence of the Minister for Sport. He has been stripped of most of his Football League responsibilities, which have been transferred to the Home Department. This time, at least, we can say that he is not responsible for the debacle. Nevertheless, I take the hon. Gentleman's point.

As we know, the Government have reduced the betting levy to its 1982 level. The Government inherited from the previous Labour Government the level at which they are now pitching the levy. That move flew in the face of the recommendations of the 1978 Rothschild Royal Commission on gambling which carried out an in-depth study of the game's finances and argued at that time that the 40 per cent. betting levy was too high and that it should be lowered to 37 per cent. My amendment seeks to implement that recommendation.

The Rothschild inquiry remains to this day the most systematic and thorough investigation into the finances of the game. Its recommendations have been strengthened by the Popplewell report on the Bradford disaster and Lord Justice Taylor's report on the Hillsborough disaster. If funds for football were important in 1978, they are vital now. However, the amendment is not just about funds for football. The House should consider the best way in which such funds should be administered. [Interruption.] Do I have the full support of my hon. Friend the Member for Bolsover (Mr. Skinner)?

Mr. Dennis Skinner (Bolsover)

My hon. Friend seems to want to know what we were talking about. We were discussing sport and I suggested that, according to conversations taking place between the Minister for Sport, who was on his knees, and the new Secretary of State for Employment, who is sitting on the rebel Bench in the place normally occupied by the ex-Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), the former Secretary of State for Trade and Industry has a three-year ban in Europe.

Mr. Pendry

I never doubted that my hon. Friend was following my speech and making pertinent comments across the Chamber.

We must act upon the royal commission's support for the establishment of a football levy board accountable to Parliament and with its chairman appointed by the Secretary of State. I readily accept that the Football Trust, which receives its funding from the pools promoters, has done much over the years to help the game, notably by its assistance in installing closed-circuit television at Football League grounds. That was a major factor in combating hooliganism. But surely no hon. Member thinks that that is the body to help bring about the necessary changes envisaged by Taylor and demanded by the Government.

A levy board is the answer. The idea of such a board did not begin with Rothschild because its roots are to be found in the Chester report of 1968, which envisaged the state of the national game and recommended that a statutory body be set up to channel the money raised from the reduction of the betting levy to the football authorities. Rothschild enthusiastically endorsed that recommendation, saying: There is no other way of achieving the objective of putting Association Football on a permanently sound footing. Not surprisingly, that proposal received widespread support in the House and throughout the game. On 13 May 1985 my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) argued that such a move was essential. On 3 July 1985 my hon. Friend the Member for Bassetlaw (Mr. Ashton) said that it was the only answer to the problem of financing football. Three weeks later my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said it was the only solution. If that was the case before the Taylor report recommended improvements to safety at our grounds, how much more essential is it now? Such reasoning prompted me to table the amendment.

In June 1986 I introduced a private Member's Bill which sought to establish a levy board. It received all-party backing and was supported not only by my right hon. Friend the Member for Small Heath, but by the hon. Members for Luton, North (Mr. Carlisle), for Broxtowe (Mr. Lester), for Cornwall, South-East (Mr. Hicks), for Staffordshire, Moorlands (Mr. Knox) and for Nottingham, East (Mr. Knowles). As recently as March 1987, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) told a meeting in Fulham that money must be channelled into the game and that a football levy board should be set up to do it.

As I have shown, such a board has all-party support and support within the game. On 30 January, when we debated Lord Justice Taylor's report, I said that my only criticism of Taylor was that his report did not fully consider the possible range of options for funding his recommendations. If he had gone into the matter in more depth, he would have found many supporters of my idea within football. I have the minutes of a meeting that I chaired in my capacity as chairman of the all-party football committee. Also involved were the Football Association, the Football League and the Professional Footballers Association. All concluded that a football levy board was the answer. I shall soon bring my remarks to an end, Madam Deputy Speaker, because I am aware of your perspicacity. I appreciate that you have allowed me to follow this line of argument for some time. I referred to the report of the Rothschild commission because I wished to connect the 37 per cent., for which I am asking, with a vehicle which I am sure the Government do not have in mind.

11.30 pm

By following the recommendations of the Rothschild commission, the Government would make available to football an extra £220 million over the next five years. That would be an addition of £120 million to the sum which is proposed. That may seem to be overly generous to some hon. Members, who may not be familiar with the latest estimates of the costs of implementing Lord Justice Taylor's proposals. I ask those hon. Members to reflect that, when the Government announced their decision to reduce the levy to 40 per cent., it was believed that the bill would be about £130 million. Since then, further research undertaken by the football authorities has revealed that to bring grounds up to the standards outlined in the full Taylor report four or five times that sum will be required.

There must be a transformation of the conditions that are offered to football supporters and not merely the meeting of minimum standards. Anything less would be to repeat the mistakes of the past, which were so heavily criticised by Lord Justice Taylor in his report. The condition that the Government should place on football for increasing revenue should be that it makes its grounds community grounds.

The House should be aware that the financial demands that are placed upon football do not stem solely from the demand for ground improvements. There is a crisis within the game that stems from the rocketing of the bills for the policing of matches in recent years. Charges for policing increased by 13 per cent. in 1987–88, and again by 23.2 per cent. in the season 1988–89, to stand at a record £4.1 million. However, arrests at or near grounds have declined quite markedly over the past three years.

On 19 June, I asked the Under-Secretary of State for the Home Department to tell me the total charge that was levied on clubs for policing during the 1989–90 season. The Minister stated that such information was not collected centrally by the Government and that the Football Trust had not yet published a figure for that season. I can tell the Government and the trust that the total bill for the policing of league matches last season was £6,205,000. That figure was supplied to me by the Football League, and it is a staggering 50 per cent. increase on the previous record figure. That must call in question whether the funds that are made available to football by the Government are sufficient to meet the demands of Lord Justice Taylor. How can clubs make the necessary investment in ground improvements, given their limited resources that are already stretched to the limit, if they have to meet appalling bills for policing? More money is needed immediately, and the amendment would release that money.

I recognise that I shall not budge the Government. I suppose that my colleagues on the Opposition Front Bench would have heart attacks if I were to press the amendment to a Division and won the day. I am convinced, however, that next year one of my colleagues will be moving from the Treasury Front Bench an amendment similar to the one that I have moved and I am sure that it will pass into law. I shall not conclude without once more congratulating the Government on meeting amendment No. 5, which stands in my name, and in so doing meeting my wishes and those of my hon. Friends who argued so convincingly in favour of such a provision in Committee.

Mr. Beith

The hon. Member for Stalybridge and Hyde (Mr. Pendry) put forward a convincing case for an amendment that would still leave the rate of pool betting duty significantly above that of corporation tax. He does not suggest a ludicrously low level of tax. The revenue forgone would be used for football improvements of the kind set out in the Taylor report. That seems to be eminently reasonable when one considers the task that faces football clubs, both large and small. Some of the larger clubs will face significant bills. That is without considering the plight of clubs such as Hibernian football club as it tries to pick up the pieces after Mr. Wallace Mercer's daring bid to have only one club in Edinburgh, or Berwick's struggle to finance the building of a new stand, having had to cancel all matches on windy days in case the stand blew down on spectators. It received that direction from the county council. That kind of problem may not yet be experienced by other football clubs.

Substantial costs are involved. They fall particularly heavily on those clubs that are not at the hardest commercial end of football—the ones that do not have the money to spend on players so as to attract the largest crowds. Few clubs are now able to do that. Therefore, I hope that the Government will consider sympathetically this attempt to extend the helpful proposals that they introduced in the Budget.

Dr. Marek

I do not believe that we shall divide the House on the amendments. I am pleased that the Economic Secretary, who I know takes a great interest in football, changed the date, after receiving representations from the Opposition. The Government amendment provides that the date 28 May should be deleted and that 6 April should be inserted in its place. I thank the Economic Secretary for the change. It will benefit football.

My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) made a pertinent point when he referred to football duty being 40 per cent. He proposes that it should be 37 per cent. The Government have increased taxation. As a percentage of gross domestic product, it is now about 38 per cent. In 1979 it was only about 34 per cent. A high taxation party is in office. Football pool duty was raised to 42.5 per cent. from 40 per cent. Therefore, I accept my hon. Friend's point that football pool duty is simply being reduced to what it was when the Government first took office in 1979. However, I am glad that it is being reduced. One wonders whether that reduction will be sufficient to enable football clubs to improve their grounds, but we are grateful for small mercies. I am glad that the Government have tabled the amendment, and I hope that it will be passed speedily into law.

Mr. Ryder

The hon. Member for Stalybridge and Hyde (Mr. Pendry) has worked hard for sport for many years. I thank him for his kind and generous remarks about the Budget announcement about football and our subsequent decision on backdating, to which the hon. Member for Wrexham (Dr. Marek) has just referred.

I promised in Committee that the Government would table an amendment to backdate the cut. Our amendment differs only slightly from amendment No. 5 and has exactly the same effect. It differs by only one day. Amendment No. 4 is the main Opposition amendment. It would reduce pool betting duty to 37 per cent. I am not persuaded by the hon. Gentleman's argument. I was aware that the Rothschild Royal Commission on gambling recommended in 1977 a cut in pool betting duty from its then level of 40 per cent. to 37 per cent. Lord Justice Taylor, in his report on the Hillsborough disaster, considered Rothschild's proposal but, even so, the suggestion in his report was for a cut to 40 per cent., not 37 per cent. That is why we chose 40 per cent. in the Budget. It will release about £100 million over five years towards the cost of meeting the Taylor recommendations. It is a significant help to football grounds all over the country. I recognise that football will still have to find further money from its own resources, but it is right to strike a balance between self-help and the sort of help that the Government can provide with the assistance of the taxpayer.

In view of what I have said, I hope that the hon. Member for Stalybridge and Hyde will not press his amendments, particularly the last one to which I have alluded.

Mr. Pendry

I recognise that the Government are not enlightened enough as yet to meet the requirements of amendment No. 4. However, time will prove me right, and I believe that it will not be long before the House recognises the full weight of my argument. Nevertheless, I congratulate the Government on amendment No. 1. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 1, in page 2, line 38, leave out '28th May' and insert '6th April'.—[Mr. Ryder.]