HC Deb 28 April 1993 vol 223 cc1010-8

'.—(1) Schedule 2 of the Betting, Gaming and Lotteries Act 1963 (registered pool promoters) shall have effect with the following amendments.

(2) In paragraph 14 (which enables the rules applicable to competitions promoted by registered pool promoters to contain certain provisions as to prizes)—

  1. (a) after paragraph (b) there shall be inserted—
  2. (b) for "sub-paragraph (c)" there shall be substituted "sub-paragraph (bb) or (c)".

(3) In paragraph 20 (statement to be sent by pool promoter to accountant after competition) after paragraph (b) there shall be inserted—

(4) In paragraph 21(1) (statement to be sent by pool promoter competitors after competition), in paragraph (a) for "the aggregate prizes in" there shall be substituted "the aggregate prizes in all those competitions (whether or not payable or payable in full)".

(5) In paragraph 23 (annual statement to be sent by pool promoter to accountant and registering authority)—

  1. (a) in sub-paragraph (1) for "the aggregate prizes in" there shall be substituted "the aggregate prizes in those competitions (whether or not payable or payable in full)";
  2. (b) in sub-paragraph (2)(a) after "competitions" there shall be inserted "(whether or not payable or payable in full)";

(6) In section 7 of the Betting and Gaming Duties Act 1981 (pool betting duty) after subsection (4) (which provides that the expenses and profits taxable under subsection (1)(b) of that section are to exclude expenses provided out of stake money) there shall be inserted— (4A) Where any amount applied in accordance with paragraph 14(bb) of Schedule 2 to the Betting, Gaming and Lotteries Act 1963 in increasing the amount payable in the case of winning bets qualifying for, or for shares in, prizes would not (apart from this subsection) be treated for the purposes of subsection (4) as provided for out of the stake money, it shall be so treated.".'.—[Sir Malcolm Thornton.]

Brought up, and read the First time.

Sir Malcolm Thornton (Crosby)

I beg to move, That the clause be read a Second time.

There are some good reasons why I and other hon. Members from both sides of the House have tabled the new clause, which is supported by scores of hon. Members from all parties. It would allow the limited carrying forward of dividend, otherwise known as roll-up, in pools competitions. The Government have some way to go before we can believe, with confidence, that the pools industry will be able to compete effectively and fairly with the national lottery. My hon. Friend the Under-Secretary announced in Committee the Government's decision to legalise the sale of pools coupons in shops and that is a welcome development and certainly a move in the right direction.

However, the change in the law on the sale of pools coupons in shops and the right to sponsor television and radio programmes that are unrelated to football results are simply not enough in themselves to put the industry on an equal and competitive footing with the national lottery. On the basis of what my hon. Friend told the Committee, the lottery is to be allowed to roll up its prize three times, whereas the pools are prohibited from doing so at all.

The new clause provides that in a week in which no one claims the maximum number of points on a treble chance coupon, the promoters may be permitted to carry forward a proportion of the first dividend prize to the subsequent competition. The number of occasions on which the roll-up may be permitted will be limited to three—the same number as my hon. Friend the Minister said would apply to the lottery.

This is an important issue to the pools industry because rolling up the prize over a number of weeks is an extremely effective means of increasing the game's attractiveness to potential customers. A game that is allowed to roll up its prizes will naturally become more successful and popular than competitive games that are not allowed to do so. It is the classical means by which state lotteries abroad have the market rigged in their favour at the expense of other soft, long-odds gambling.

No one doubts that the pools and the national lottery are equivalent forms of gambling. That point was made by the Select Committee and by my hon. Friend the Minister of State in Committee: They are a form of low-stake, long-odds gambling from which the threat of social harm is small. That is why the Government tabled an amendment to reduce the age of pools entrants to 16, to match that for the national lottery. The two forms are so similar that they must, by the rules of the marketplace, compete for similar markets. There is nothing wrong with that. The Government have always stood for free and open competition and I hope that they always will.

I tabled new clause 9 because I feel strongly about that issue. It seeks to allow the pools to compete freely and effectively with their closest competitor, which is something that my hon. Friend the Minister must welcome.

In Committe, my hon. Friend the Member for Ribble Valley (Mr. Evans) made similar points on a roll-up amendment. His words echoed many of my own sentiments: I tabled the amendment in the spirit of fair play. I seek no advantage to the pools companies but parity on roll-up. Similar to national lottery prizes, pools prize money could be rolled up for three weeks. I hope that my hon. Friend feels able to support new clause 9.

I have read reports that a number of Cabinet colleagues of my right hon. Friend the Secretary of State have lent their support to allowing the pools a limited roll-up. In an article in The Guardian on 21 April, my right hon and learned Friend the Home Secretary viewed the existing restrictions on pools operations as "unnecessary and bureaucratic". My right hon. Friends the Secretaries of State for Wales and for Scotland are also reportedly concerned about likely job losses if the pools are not allowed to maintain their markets through fair and free competition. Allowing the industry a limited roll-up would be a big step towards ensuring that.

I am also concerned about the job losses that would be generated by a pools industry that was robbed unfairly of its customers by having the market rigged against it. As the constituency Member of Parliament for Vernons on Merseyside and for many of the city's thousands of Littlewoods employees, I would regard it as unforgivable if my constituents lost their jobs after their companies' products were put out of business solely because of Government legislation. I am concerned not just about Liverpool; the pools industry is a healthy and competitive industry that employs thousands of people in areas of significant unemployment throughout the United Kingdom, in particular, in Glasgow and Cardiff.

Doing the pools is a great British institution. In his excellent speech on Thursday, my right hon. Friend the Prime Minister spoke of the pools as one of the enduring characteristics of British life that must continue regardless of how far we progress towards the European single market. He said: Fifty years from now, Britain will still be the country of long shadows on county grounds, warm beer, invincible green suburbs, dog lovers and pools fillers. I am sure that we all agree with those sentiments.

If the lottery is to be allowed a limited roll-up, so should the pools. The reasons are that they would both be competing for similar markets; are both long-odds, low-stake competitions; they pose a low risk of social harm; and they generate sizeable sums of money for good causes—the pools more so than the national lottery, as a result of the Government's decision to set the lottery prize fund at 50 per cent.

No sensible person can seriously accept that there is a distinction between the pools and the lottery on the basis that one is run for good causes and the other for commercial gain. That cannot be so when my right hon. Friend the Chancellor of the Exchequer takes 37.5 per cent. of pools turnover in tax and the pools donate a further 10 per cent. to good causes in sport and arts and take less than 3 per cent. profit.

I urge the House to accept new clause 9. The pools companies and the national lottery can and should be allowed to co-exist on fair and level terms. As the Bill stands, they will not.

Mrs. Ann Clwyd (Cynon Valley)

We recognise and welcome the progress that was made in Committee. On Second Reading, we argued that there should broadly be a level playing field between the national lottery and the pools industry. In that regard, the Bill certainly left the Committee in a more acceptable state than it arrived. I congratulate all those responsible.

It is good news that pools coupons will be legally available in retail outlets, including licensed premises and betting shops. That move sensibly brings the letter of the law into practice and forms an essential element of measures necessary to ensure that the pools are given a reasonable opportunity to compete with the national lottery. That is not to say that we have been completely reassured that the pools will be able to compete on fair and level terms. The change in respect of shops takes them some way towards that, but, as the Government know, there remain a number of other important changes to be made to allow the pools to compete fairly.

Allowing the pools a limited roll-up is one. If the national lottery is to be allowed to roll up a prize three times, as it will be, so should the pools companies. We welcome new clause 9 for its attempt to redress the balance. The fact that hon. Members of all three main parties have put their names to it signals the strength of feeling on the issue.

The words of the hon. Member for Ribble Valley (Mr. Evans) have been quoted on many occasions, and they were particularly important in respect of establishing a level playing field. The Government claim to believe in fair competition. If that is the case, I hope that they will demonstrate their belief this evening by supporting the amendment.

We are well aware of the dangers with roll-up, and in other circumstances we would like to have seen that practice denied to both the national lottery and the pools. We heard much in Committee about the detrimental social effects of the rolling up of large prizes and the frenzied ticket buying that that generates. In Committee, my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) outlined the dangers. He warned that lotto mania can lead to huge surges in lottery ticket buying in the days leading up to a draw. We are also aware of the syndicates of professional gamblers who exploit a rollover system through bulk ticket buying. If the national lottery is allowed a limited rollover, so should the pools. As my hon. Friends have forcefully argued today, there are too many pools employees' jobs at risk in Liverpool, Cardiff, Glasgow and London for us to accept such unequal and unfair treatment.

As we all know, there is no intrinsic difference between the pools and the national lottery. For that reason, there can be no sound economic rationale for discriminating between the way that each is allowed to operate in the marketplace. To do so would be contrary to the principles of free and fair competition. The pools are for a long-odds chance of winning a large prize for a small, usually consistent, stake, on the basis of a modest, once a week bet. That can in no way be regarded as a harder form of gambling than the national lottery.

If contributions to good causes are a determining factor in deciding whether one gambling activity is softer than another, the pools also make a substantial contribution. If, of course, there were any future circumstances in which roll-up could be restricted further, we should wholeheartedly support it and would seek similar restrictions for pools roll-up also. Until we obtain that guarantee, we shall support new clause 9. That will ensure that the pools companies and their employees can compete effectively alongside the national lottery.

Anything less than a clear commitment from the Minister today that he accepts the underlying principle in new clause 9 will be unacceptable to this side of the House. If the Minister finds that the principle is one that the Government can accept but that he wants to bring it back to another place, we shall accept that. However, we will not—nor will many hon. Members on both sides of the House—accept anything less. I hope, therefore, that the Minister will respond positively and accept new clause 9.

7 pm

Mr. Nigel Evans

I am grateful for the opportunity to support new clause 9. I am also grateful for the kind words of my hon. Friend the Member for Crosby (Sir M. Thornton) and the hon. Member for Cynon Valley (Mrs. Clwyd).

The Bill has come a long way since it was considered in Committee. Hon. Members have commented on the fact that people aged 16 will now be able to participate in either the pools or the national lottery and that pools coupons will be made available through retail outlets. I, more than many hon. Members who are in the Chamber, am grateful for that announcement. As you may know, Mr. Deputy Speaker, my retail outlet was one of the 20,000 that distributes pools coupons until I sat on the Standing Committee, when it was pointed out to me that it was illegal.

Immediately I started to look for the grey areas. I found only black and white, however, and therefore had to cease distribution of pools coupons in my retail outlet in Swansea. I cannot wait for the day when the Bill becomes an Act so that once again we can distribute pools coupons. The Government have gone a long way towards altering the Bill in such a way as to enable the distribution of pools coupons by retail outlets once again to become a reality.

As for roll-up, I, too, was not convinced that a £2 million prize, rolled up three times to £6 million, would be any more attractive than the £2 million prize. When I put a £1 stake on Virginia Wade winning Wimbledon and won £16, I was absolutely delighted. I had to sit down for about three hours to get my senses back. If I won £2 million, I should probably have to be put on a life support machine.

We must be mindful of the fact that many small pools companies exist alongside Littlewoods. They would be grateful for the opportunity to roll up their prizes so that their top prizes were more attractive in the weeks when no one won the top prize outright.

The pools industry is extremely important to this country. It has a turnover of just under £1 billion. The Exchequer benefits to the tune of a third of a billion pounds in pools betting duty. The Sports Council and the Arts Council receive £65 million. Many rural constituencies, such as mine, benefit from having this sum of money to distribute. Moreover, the Football Trust receives £36.5 million.

The creation of the national lottery will have a significant impact on jobs, certainly in the north-west. I know that many of the hon. Members who are in the Chamber are equally concerned about its impact on jobs. We are talking about 6,500 full-time jobs and 80,000 part-time jobs. The 80,000 part-time pools collectors do not receive massive sums of money for the coupons that they distribute, but what they do receive—£30 or £40, or even less—is an important part of their total income. We should ensure, therefore, that that part of their income is preserved.

I support new clause 9 not only because it would help to preserve jobs, but because I believe that there should be competition. All of us want the national lottery to be a great success, with tickets sold and the profits invested in good causes. To enable the national lottery to be enthusiastic about selling as many tickets as it possibly can, we must ensure that, for it to remain enthusiastic about selling tickets, there is competition.

The Conservative party is the party of free enterprise and competition. We want to ensure that the national lottery does not have a monopoly and does not rest on its laurels. I have sufficient faith in the pools companies to believe that they will try to ensure that they do not disappear. Both they and the national lottery will benefit from fair competition. Then the good causes to which I have referred will also benefit.

The point was made in Committee that we did not want a level playing field to be created for the pools companies and the national lottery. It is not so much a question of a level playing field as of adjacent playing fields. We want to ensure that one of the players is not kicked off the pitch and that both playing fields can exist side by side, with healthy competition between them. By giving life to one form of gambling, the national lottery, we should not kill off another form of gambling, the pools. Both are useful as a means of raising funds and creating jobs. I hope that the principle of new clause 9 will be accepted.

Mr. Alton

On Second Reading, the Secretary of State said: I am also minded to outlaw the discounting of tickets and limiting rollover, which will help to avoid abuse."—[Official Report, 25 January 1993; Vol. 217, c. 722.] It would have been better if no allowance for rollover had been made in the Bill, for the reasons which the Secretary of State advanced on Second Reading—that rollover allows syndicates to develop and leads to abuse. We should be concerned about the fact that rolling up prizes could lead to the discrediting of the national lottery and possibly, in due course, to the discrediting of the football pools.

I shall support the hon. Member for Crosby (Sir M. Thornton) because I believe that, if the provision is being made available for the lottery. It should also be made available for the football pools. However, it would have been better if the principle of equality were applied by allowing neither to roll over their prizes. Of course, it is still not too late for the Government to consider that idea.

The hon. Member for Ribble Valley (Mr. Evans) rightly said that there should be fair and free competition but not a monopolistic practice. The lottery should certainly not be allowed to set out like a whale to swallow the minnows in the sea around it. It would be highly undesirable if the Bill were to complete its Report stage with provisions allowing only the national lottery but not the pools to roll over.

The hon. Member for Ribble Valley also mentioned the size of prizes. I am very apprehensive about such large prizes being offered. The devastating effect on the life of an average family of winning such large prizes has not been properly considered. I would prefer more modest prizes to be awarded, perhaps on a wider basis with smaller amounts of money being given to a larger number of winners. I am worried that we are feeding the idea that people should always want bigger, faster, better and more, which seems to be a feature of our society. It may be rather old-fashioned to say so, but we should not deliberately stimulate such an idea. I hope that the Government will consider that issue before the Bill reaches another place.

Mr. Peter Lloyd

I am glad to have caught your eye at this stage in the proceedings, Mr. Deputy Speaker, because I may be able to help the House to reach a conclusion a little more speedily.

Choosing my words carefully when speaking to amendments ably moved by my hon. Friend the Member for Ribble Valley (Mr. Evans), who has made a similar case today, I said that the Government remained to be persuaded that the rollover facility for the pools was necessary or desirable. In particular, I said that the circumstances in which the pools companies proposed to roll over prize money did not seem to be altogether fair and were certainly quite different from those in which the rollover would operate for the national lottery.

My hon. Friend's amendments would also have given the pools companies a free hand to roll over prize money in any circumstances they cared to invent, the only restriction being a limit of three in the number of successive rollovers. Had we accepted the amendments, the result would have been not fair competition between the pools and the national lottery but a clear competitive edge for the pools.

New clause 9, ably moved by my hon. Friend the Member for Crosby (Sir M. Thornton), responds helpfully to some of the criticisms that I made in Committee. By providing for more limited rollover facilities, the new clause is a move in the right direction, but I regret that it does not go far enough. Let me take a few minutes to explain my continuing reservations.

We have been told by the big three pools companies that, under their present rules, the rollover arrangements set out in the new clause would produce six rollovers a year for Littlewoods, about a dozen for Vernons and perhaps 26 for Zetters. Of course, those figures are estimates; the actual number of rollovers could turn out to be higher. In any event, it would be open to the pools companies to change their rules of competition to produce more frequent rollovers. Let us compare that with what is likely to happen to the national lottery.

The experience of most other European state lotteries suggests that rollovers are used sparingly. Single rollovers might happen perhaps once or twice a year whereas successive rollovers would be extremely rare. We expect the operator of the national lottery to set the odds so as to produce a similar pattern in this country. The operator will, regardless, need to obtain prior clearance for the rules for any particular lottery from the Director General Office of the National Lottery.

Mr. Ashton

The Minister cites only the European experience. When I, my hon. Friend the Member for Oldham, Central and Royton (Mr. Davies) and other members of the Select Committee went to America, we found that rollover occurred every week. People were convinced that that whipped up the frenzy about the big prize on Saturday night and that that was what brought in the money.

Mr. Lloyd

I accept that there are other ways of running national lotteries. Most lotteries abroad have rollovers only twice or three times a year, which is what we expect in this country, but I accept that other countries do things differently.

As I was saying, the pools companies would be free to set their own rules. However, the director general will want to ensure—I direct my remarks especially to the hon. Member for Bassetlaw (Mr. Ashton)—that the rules are fair to the participants, and he will also be aware of public feeling against excessive first prizes. That point was made by the hon. Member for Liverpool, Mossley Hill (Mr. Alton).

New clause 9 would not, therefore, produce the level playing field sought by so many hon. Members. The national lottery, operating under the close supervision of Oflot, would roll over prize money perhaps once or twice a year. In contrast, the football pools would have rollovers six or more times a year and would have a free hand to change their rules to engineer more frequent rollovers. In such circumstances, the national lottery would—to repeat a phrase that has already been used—have the market rigged against it.

7.15 pm
Mrs. Jane Kennedy

This is the first time that I have heard that argument. I understood that rollover occurred when a prize was not won in the draw, whether on the pools or in the lottery. How can one predict with such apparent accuracy how many rollovers there will be on the pools or in the lottery?

Mr. Lloyd

By chance. There are odds which can be predicted to a certain extent in the way that the rules are drawn up. The rules which the pools company suggested to us initially, and which I said in Committee I did not find very convincing or fair, meant that if there were one winner, he would receive the whole prize. However, if there were two winners, instead of them halving the prize between them, half would be rolled over for the following week and the two winners would each get a quarter of the prize. That was one suggestion.

The hon. Member for Mossley Hill mentioned spiralling jackpots. The fear was expressed in Committee that we could be turning the United Kingdom into a Las Vegas island. The new clause would allow that to happen but only with the pools, not with the national lottery. It would stoke up jackpots without let or hindrance. There would be pressure for the national lottery to compete and to ensure that it too had rollovers at least six times a year, perhaps more. The Bill could come to be seen as a Trojan horse that unleashed an explosion of jackpots—if jackpots can explode—for which I do not think the public would thank us in the long run.

For those reasons, I cannot accept new clause 9 in its present form. However, the passion and eloquence behind and in front of me, some of which I feel is still pent up and not yet unleashed—perhaps it will be unleashed after I have sat down—is very compelling. I am glad to be able to say that I am convinced that there is a good case for allowing the football pools to operate limited rollovers similar to the national lottery.

I can tell my hon. Friend the Member for Crosby, those who have spoken in favour of the new clause and those who would have liked to have done so that we intend to introduce our own proposals in another place to ensure that where rollover is involved the pools will enjoy similar freedom and opportunity to those enjoyed by the national lottery. I think that that was what the hon. Member for Cynon Valley (Mrs. Clwyd) wanted.

In view of my assurance, I hope that my hon. Friend will feel that he has achieved his primary purpose in tabling the new clause and will be willing to withdrawn it so that the Government can introduce one in another place in due course.

Sir Malcolm Thornton

Perhaps I can assist the House and avoid the unseemly spectacle of so much pent-up emotion being unleashed. I am grateful to my hon. Friend the Minister, who is correct. I seek parity between the pools and the lottery, and nothing more. In view of his assurance, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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