HL Deb 02 December 1925 vol 62 cc1060-100

LORD NEWTON had given Notice to move, That with the view of providing an additional and immediate annual revenue and thereby diminishing some of the crushing burdens on industry, as well as of securing its better regulation, it is desirable that betting should be taxed; and to ask whether His Majesty's Government will consider the advisability of putting into operation the scheme declared to be practicable by the Betting Committee in 1923.

The noble Lord said: My Lords, this is a Motion which is practically identical with one which I moved rather more than a year ago and consequently I have nothing fresh to say on the subject whatsoever. I do not know that I need worry myself about that, because it is very seldom that anybody has anything new to say upon any particular subject, and so far from making any apology for reviving the question, I consider that the necessity for this tax which I am advocating is more evident than it was when I last moved in this matter. Since I put the Motion on the Paper we have had an additional burden imposed upon us in the shape of the coal subsidy. I consider that the Chancellor of the Exchequer ought to be extremely grateful to anybody who has any reasonable proposal to put before him, with a view of enabling him to meet the difficulties which are accumulating upon his head.

It will be remembered that in 1923 the Government of which Mr. Bonar Law was then the head, appointed a House of Commons Committee to consider this question of betting, and incidentally I may remark that of all bodies a House of Commons Committee, when it is appointed for the purpose of considering a highly contentious question, is about the most unsatisfactory body you can conceive. Everybody knows perfectly well what happens on these occasions. The Whips hunt about for people who are supposed to understand the question under discussion and very often they choose people who know very little about it. Then, on the other hand, they set out to find people who are opposed to the particular question under discussion, and having collected them they throw in a few others as make-weights, and the result is invariably unsatisfactory. It is perfectly obvious that if you set about an inquiry in that kind of way it is impossible to arrive at a unanimous decision and that gives the Government an excuse for doing nothing at all.

In addition to the unsatisfactory nature of the tribunal the reference, if possible, was still more unsatisfactory. These gentlemen were invited to consider, first, the question as to whether the taxation of betting was practicable, and, in the second place, if it was desirable. It is perfectly obvious that what ought to have been done was that the Government ought to have appointed a Committee to decide whether such taxation was practicable, and ought to have settled the question of desirability themselves. It is not much good discussing those errors now. But although, as I have explained, the form of tribunal was unsatisfactory and no direct result was arrived at, yet at the same time, thanks largely to the efforts of the Chairman, Sir Henry Cautley, who presided with great ability over it, a vast amount of extremely valuable information was obtained, and that is embodied in a very bulky Bluebook, which really contains much better reading than most official publications.

This Committee established the fact—though most people knew it before—that betting in this country has spread to an almost incredible extent. Every class bets, from the so-called idle rich to the recipients of the "dole." Men bet, women bet, and it came out in the course of the evidence that owing to the unsatisfactory nature of the present law vast numbers of children at elementary schools bet as well. This is a circumstance which reflects very little credit upon us as a nation. It was also established that the present law, which I may remark incidentally is founded upon two ancient Statutes, is archaic and illogical, and provocative of much discontent and difficulty because it appears to discriminate unfairly in favour of the rich as against the poor.

I will give some very short facts to illustrate the magnitude of the betting industry as disclosed by this inquiry. There were various calculations made, but this figure was accepted by the Chairman—the annual turnover in betting is something like £200,000,000 a, year. As a matter of fact, there were many people who contended that the annual turnover was a great deal more and it was stated that it reached £500,000,000. About ninety per cent. of this betting is done away from race courses. In Glasgow, for instance, £30,000 a day is expended in betting during the flat racing season. There is one bookmaker—there are probably several—whose bills for telephones amount, in the year, to between £2,000 and £3,000, and it came out that the annual turnover of certain individual bookmakers reached the enormous figure of about £1,500,000.

I turn from betting to what I will venture to call the affiliated industry of horse-racing, and although it may sound rather disrespectful to speak of the sport of kings as an affiliated industry, I maintain that it is a perfectly correct description because, whereas it would be perfectly impossible for racing to be carried on without betting, it is the easiest thing in the world to carry on betting without, racing. This affiliated industry appears to be in just as flourishing a condition. I happened to come across the other day a well-known sporting publication, and I derived various items of information from it which seemed to me specially interesting It appears that at the present day, in spite of the shortness of money which is supposed to prevail everywhere, the racing stakes are of considerably higher value than they have ever been before. I could not say what the average is, but at all events it is a fact that every race is worth more than it was last year, or any year previously. For the first nine months of this year, out of the enormous number of thoroughbred yearlings which were sold I found to my astonishment that no fewer than 151 realised an average of something like £5,000 apiece. Remember, this is only a fraction of the number of yearlings that are sold. One of these animals, apparently, fetched as much as £12,000 and another £10,500, and the price of £5,000 or £6,000 was not so very exceptional. I find that a mare called "Straightlace" fetched no less a sum than 17,000 guineas, and one enterprising gentleman gave no less than £10,500 for a gelding, a steeplechasing horse.

It will be in the recollection of the House that when the last Derby took place a competitor arrived from France. This horse did not travel in the ordinary way but had a special steamer, with a special band of attendants, and was guarded and ministered to in an elaborate fashion. This horse, I may remark incidentally, was not even placed, and must really have cost its owner almost as much as one or Mr. Lloyd George's expeditions to the Continent when the War was over. As an additional instance of the way in which money is spent I find that although, as I understand, there are only five days' racing at Epsom in the year—I should be glad to be corrected if any racing Lord is present (racing Lords never are here when their presence is required)—yet the Epsom Grand Stand Company pays the enormous sum of £8,000 yearly in rates. On the Epsom Downs there is a gigantic advertisement of a most objectionable character, with an enormous image like the wooden statue of Hindenburg, advertising a particular bookmaker, with the device: "No limit," which conveys a good deal to people who understand what it means.

I saw in the Press that the Chancellor of the Exchequer was sending abroad a sort of Commission in order to study luxury taxes. But here is obviously a gold mine, so to speak, at his feet. There does not seem to me to be any necessity to send people abroad to enquire into luxury taxes. Here you have everything you want, and, as the gambling temperament is probably more developed in the Chancellor of the Exchequer than in almost any other inhabitant of these islands, I cannot conceive why he does not immediately avail himself, if he has not already done so without my knowledge, of the opportunity afforded him. Nobody has ever disputed that this particular tax would bring in money. The only dispute has been as to the amount which it would bring in, and Sir Henry Cautley adopted as the basis of his calculations the sum which I mentioned—namely, £200,000,000—as the annual turnover. Upon this he suggested that a two and a, half per cent. tax should be imposed. That would bring in a revenue of £5,000,000 a year.

Fortunately, we are in a position in this House, owing to the knowledge of certain noble Lords, to estimate more correctly what a tax on betting might bring in. In the debate last year my noble friend Lord Liverpool, who was Governor of New Zealand, informed the House that the tax on betting in New Zealand brought in rather over £600,000 a year. The population of New Zealand is about 1,300,000. Here the population is, roughly speaking, thirty times as large. Therefore it is not altogether absurd to argue that a tax of this kind, assuming that Englishmen bet as much as New Zealanders—and I cannot conceive of any nation betting more than we do—should realise not a sum of £5,000,000 but a sum of £25,000,000 a year.

When this subject was discussed last year my noble friend Lord Arnold was put up by the Socialist Government to oppose the Motion, and the noble Lord, with the exercise of a certain amount of ingenuity, reduced Sir Henry Cautley's £5,000,000 to a sum, I think, of £3,500,000. This, he said, was a sort of niggardly sum which really was not worth thinking about at all. Incidentally, I might remark, that I think it is only a Socialist Government which would speak of £3,500,000 as a niggardly and negligible sum. But I was not so much struck with my noble friend's arithmetic as with his arguments, and what struck me particularly was, if I may say so without offence, the ultra-British arrogance which he displayed.

"Here," he said, in effect, "we have not got this tax and we do not intend to have it. Let these miserable foreigners tax gambling as much as they please. Let the benighted inhabitants of the Dominions get as much as they can out of gambling. We will not do anything of the kind. We have the finest system of taxation in the world, and we are not going to alter it for anybody. If we were to alter it we should be inflicting serious damage upon our financial credit and a shock would be given to our financial policy from which it would be difficult to recover." I wondered at the time whether it had ever struck the noble Lord that we have survived even greater shocks than that. I cannot imagine a greater shock to the financial prestige of the country than the advent of a Socialist Government to power, the Government of which the noble Lord was himself a member. We survived this tremendous trial, and it seems to me, on the whole, that we need not be very much alarmed if it is now suggested that we should imitate the example of every civilised country on the face of the globe.

I do not know what sort of an answer I shall receive this afternoon from the present Government. I hope that, I shall not be told I am damaging the financial credit or financial prestige of the country by making proposals of this character. Whenever I hear this subject of the taxation of betting discussed outside Parliament—that is to say, on its merits—the discussion always takes the same form. The advocates of this tax are able to make out a practically unanswerable case. They point out that it is a tax on luxury, that it will bring in a great deal of money, that Government officials say there is no trouble to collect it and that nobody need pay it unless they choose to bet. The discussion always terminates in the same way. Their opponents say: "We have no doubt that you are perfectly right and that this is a most desirable thing in every way; but it is no good talking about it because the Nonconformist conscience will not have it."

I ask your Lordships' House in all seriousness how much longer we are going to put up with this ridiculous bogey of the Nonconformist conscience. I do not wish to say anything disrespectful of the Nonconformist conscience, but it always seems to me that, it is easy to measure its importance. I measure its importance and its strength by the number of Liberal members in the House of Commons. At the present moment, unless I am much mistaken, there are fewer Liberal members in that House than there are Liberal Peers who sit behind my noble friend Lord Beauchamp. I cannot help thinking that the Nonconformist conscience has gone out of business or, to use a bookmaker's phrase, it has been temporarily knocked out, and I cannot see why we should any longer have a superstitious fear so far as that particular influence is concerned.

I cannot help thinking that the attitude assumed by the opponents of this particular tax is of a singularly unheroic character. They tell us that betting is a disgraceful thing; that it ought to be put an end to, and that it is, so to speak, a national disgrace. Let me instance the Labour Party. If they had an opportunity, I suppose they would vote against, this tax as one man. Yet, such members of the Labour Party as I am acquainted with are much keener gamblers than I am and are much more ready to risk their money than I should be in ordinary circumstances. What has the Labour Party ever done to stop betting? Have they ever made the smallest attempt to do so? Can anybody quote a Resolution carried or even moved at a Labour Conference, or a Trade Union Congress, to the effect that trade unionists should be turned out of the Party if they betted?

Then, the Labour Press devote a considerable portion of their space to sporting intelligence. They keep tame prophets. The leading daily organ, if I am not mistaken, devotes a whole page practically to gambling, and if that page was suppressed their circumstances would become so bad that they would be forced to rely even more than they are supposed to do upon assistance from outside countries. I should have a great deal more admiration for these opponents of the tax if they endeavoured to do something—if, for instance, they had the courage to stop the publication of odds in the papers, which would be the most mortal blow that anybody could possibly deal at gambling, at all events at gambling on horse-racing. But they do not do it, and for the most obvious reason—they are afraid to do it; and I admit they have very good examples to quote for taking this very unheroic and undignified course.

Every Government up to now, although it has made a show of disapproving of gambling, and so forth, has been only too glad to take advantage of it, so to speak, on the sly. Governments have always refrained from taxing betting; but they take very good care to make what they can out of it. They make bookmakers pay Income Tax and Super-Tax. There is, too, the Entertainment Tax. And they help them unofficially and officially, in a certain sense, as much as they can, because they place the resources of the Post Office at their disposal. The Post Office is delighted to fit up any number of telephones upon application. The Home Office, not to be behind-hand in the good work, will provide any number of police that may be asked for. As an example of the way in which Government offices try to derive indirect and so to speak, surreptitious profits out of gambling, I may mention that not long ago I saw in the mast conspicuous place on the outside of the back cover of the official Telephone Directory, which, I suppose, is one of the best known works in this country, the advertisement of a well-known London bookmaker. That is typical of the attitude adopted on this particular question by one Government after another, and I think the time has come when that attitude, which only excites ridicule, should be abandoned.

So much has been said on the subject of the morality of betting that I hesitate to add much to it, but at all events we have the authority of a distinguished Prelate, now dead, for saying that betting is not a crime. I will admit that betting is a vice if it is carried too far, but personally I do not know whether it is, because I am a person totally devoid of imagination. I never have been, and never shall be, able to distinguish between the morality of betting upon a racecourse and gambing upon the Stock Exchange. Perhaps the noble Lord, Lord Arnold, who, I understand, in his spare time is, or was, a stockbroker, will enlighten me upon this point, and explain what the difference is. Equally, I have never been able to understand why it should be moral to bet on credit and immoral to indulge in ready-money betting. In the same way I am unable to distinguish between the morality of backing a horse by telephone or by telegram and doing so by means of a slip handed to a bookmaker's tout.

I can even, if hardly put to it, find something to say in favour of betting, provided it is not carried too far. I have always thought, and have expressed the opinion before, that there is one advantage about betting, and that is, sometimes it is the only method of ascertaining the truth. Apart from that, betting has now become not only a national amusement, but a kind of national occupation, and, although it may seem very deplorable, it is a means of imparting variety to existences which are often very dull and tedious. I will go further and say it may prevent something worse. I am absolutely convinced that if starting-price betting, football coupons, and such things had prevailed in Russia, Bolshevism never would have obtained possession of that country, and from what little personal experience I have had of Soviet Russia, I should infinitely prefer to be governed by bookmakers rather than by Bolsheviks.

The Committee to which I have made so many references this afternoon pointed out that there were three courses before us. The first course, naturally, is to leave things as they are, to ignore as much as you can the evils which everybody knows exist, and at the same time to make as much as you can out of the industry by what I have ventured to call surreptious methods. The second course is to attempt to suppress it by force—that is to say, to increase the police force, to harry the street bookmakers, and to increase the penalties. Anybody who has taken the trouble to read the Report will see that such a course is practically impossible, and nobody seriously recommends it. Unfortunately, owing to the state of the present law, the sympathies of nearly everybody are now on the side of the person who is committing illegal action. There remains the third course, which is adopted in every country but this—namely, that of control and taxation. I do not for a moment believe that the control of bookmakers and the taxation of betting will increase the volume of betting. On the contrary, I am prepared to believe that it will decrease it and I believe those noble Lords who have experience of the methods adopted in the Dominions will be able to bear out what I say.

I may adduce a further reason, a practical reason, why I think that betting would diminish, and that is that, as the tax would have to come out of somebody's pocket, presumably the bookmaker's, he will take it out of the backer, and, therefore, the backer will get shorter odds, and there will be less inducement to him to bet. I absolutely decline to believe for a single moment in the theory, which apparently prevails, that if you tax betting and recognise it a lot of people will set to work straightway and bet who hitherto have refrained from doing so. I do not believe for a single moment in the existence of a class of that kind. You might just as well argue that there are a number of people in this country who do not travel by train, but who would do so if you were to nationalise the railways. There is much more that could be said on this particular point, but I am not going to say it. I am going to leave it to noble Lords who know much more about this question than I do. I see noble Lords present who are greater authorities than I am. I am not referring to racing Lords, because they very seldom come here, and I have never known them to be here when their presence was required. The noble Lords to whom I am alluding are noble Lords—and there are several present—who have had experience in the Dominions, such as my noble friends Lord Beauchamp, Lord Liverpool, Lord Stanley of Alderley, and others. They have had practical experience of the working of this system, and I sincerely hope that they will give us the benefit of their experience. I should be much surprised if they do not express the opinion that this is almost an ideal tax, and one which, if it is imposed, can only result in benefit to everyone concerned.

When last I brought forward this Motion there were only fifteen noble Lords who voted against it, and they were composed of the henchmen of the Socialist Government, of some obstinate Prelates, and my noble and learned friend Lord Darling. I fully intend to take a Division on this occasion, because, although all Governments systematically ignore Motions passed in this House, I am convinced in my own mind that on a non-political question of this kind our opinion really must carry some weight in the country. For that reason I am determined to take a Division, and I sincerely hope that its effect will be to embolden the Chancellor of the Exchequer and his colleagues to embark upon a form of taxation which, I am not exaggerating when I say, has met with the approval of most of the sensible people in this country. I beg to move.

Moved, That with the view of providing an additional and immediate annual revenue and thereby diminishing some of the crushing burdens on industry, as well as of securing its better regulation, it is desirable that betting should be taxed.—(Lord Newton.)


My Lords, I rise to support the noble Lord whose Motion is before your Lordships' House. I do not propose to traverse the ground which I covered in 1924. At that particular time both the opponents and those who supported us in the Division that took place were doubtful whether a tax of this kind would not lead to an increase in gambling generally throughout the country. There were listening to that debate some Australian Ministers and some New Zealand Ministers, and I had the benefit of discussing the matter with them afterwards. I have been to some trouble since then to obtain figures to try to prove that in His Majesty's Dominion of New Zealand, at all events, the tax which has been placed upon betting by the Government, so far as racing is concerned, has not increased gambling in the country. I know figures are always very boring and dry, but I must use them in this particular instance to prove what I have to say. The number of racing days in the Dominion of New Zealand is, roughly, between 284 and 289 days in the year. The number of races there is from 2,235 to 2,285. The amount of stakes varied from £502,000 in 1920, the year I left, to £593,000 in 1924. As to the amount placed on the totalisator, I ought first to mention that the population in 1919 was 1,100,000 and to-day it is nearly 1,300,000. In 1920 the amount passed through the totalisator was £8,792,570. Last year, with the increase of 200,000 in the population, the amount passed through the totalisator was £7,224,000, or a reduction of rather more than a million pounds.

As regards the tax, Lord Arnold estimated the possible revenue, taking the turnover figure as £200,000,000, at £3,750,000, out of which he would deduct £150,000 for collecting, bringing it down to £3,600,000. I do not quite understand whether he intends to deal with the tax only under the heading of investments in betting, or whether he is going to take the same idea as in the Dominion of New Zealand, where the tax is divided into three portions: on the totalisator investments, the winnings and the stakes. There the Government takes 5 per cent. of the totalisator investments, 2½ per cent. of the winnings and 5 per cent. of the stakes. The amount which accrued to the Government up to July 31, 1923—that date being the end of the racing year—was £592,416 and up to March 31, 1924, the end of the financial year, £618,425. At the end of the financial year, March 31, 1925, the Government got £590,385, showing that there was a reduction of about £28,000 in the amount of taxes received by the Government. Everybody in the House will agree that from a population of 1,300,000 more than half a million pounds is not a bad amount of money for the State to get.

Lord Arnold, in March, 1924, said he did not think the tax was a business proposition, that there was not enough money in it. Even if you take off the tax on the stakes, which would probably not be very easy to carry out here at the present moment, you still would have an amount on those figures of between £18,000,000 and £20,000,000. I do not think that there is any Chancellor of the Exchequer who would be unwilling to accept that sum. Personally I think it would bring in a considerably larger sum, a sum nearer the £25,000,000 which Lord Newton mentioned.

The point was raised whether it would be advisable to have the totalisator in this country. There are two reasons why you could not do it at the present moment. The first is that it would be very unfair to the bookmakers. The bookmakers are not all bad, as some people would have us believe. Secondly, in New Zealand they allowed the bookmakers to exist for ten years before the, totalisator was instituted. Again, it would take a considerable time to erect the totalisators. The newest one took nearly eighteen months to construct. You would, therefore, have to do exactly the same thing as did the Dominion Government to which I have been referring, to use the means you have at your disposal at the moment; if any Government in the future thinks fit to abolish the bookmaker it can do so, and then we can have the totalisators.

The contention is raised that because the Dominions are new countries they can do things which the Old Country could not do. There were several of His Majesty's Dominion Ministers in this House on the night when that was said. They smiled and said that when they started to do anything new they were met with the same contention, only conversely to that made here. All kinds of difficulties are raised but, although there are difficulties, I do not believe that fey could not with care be overcome so that a very fair income would be provided to the State. On the moral question raised by those who say that all betting is wrong, I have nothing to say at all, except that I do not agree with it. You are not going to abolish betting by a stroke of the pen or an Act of Parliament, but if you clean it up you will improve the effect on the population, particularly in the large industrial areas. Betting does not go on only on the racecourse but in other places, and on other things, too. Once bookmakers are licensed you would have a hold on them and be able to do away with a great many of the very unpleasant points connected with betting in this country.

I had intended to raise the question of lotteries to-day, but it would defer the question before your Lordships' House and I prefer to leave it to another time. We have had so many tries to get this question before the Chancellor of the Exchequer that anything would be unfortunate which would delay it from being included in next year's Budget. If the noble Lord is willing to go to a Division, as he said he was, I shall be only too glad to support him and I hope your Lordships will do the same.


My Lords, perhaps your Lordships will allow me to intervene at this stage on behalf of the Government. Lord Newton has initiated a discussion on a subject which has commanded a good deal of attention during the last few years. He has taken a very great interest in it for a long time. As far back as 1902 he was a member of the Select Committee of your Lordships' House which went into this subject. He has made a very thorough examination of it and has a great knowledge of it. Naturally, I can make no pretence of having studied it in the same way as he has or to have acquired the same amount of knowledge. I noticed in reading through the debate on this subject which took place in March of last year that the noble Lord confessed that he occasionally betted; indeed, that he frequently did so if he saw a good opportunity of winning and getting paid. Although I am afraid I cannot claim to have an absolutely clean record in so far as this vicious or laudable practice, as you like to call it, is concerned, I am afraid the noble Lord has an advantage over me from the point of view of theoretical knowledge and practical experience of the subject.

The noble Lord suggested that there was really only one side to this question. There is no doubt that taxation of betting bas very attractive features indeed, and there are many things to be said in its favour. No one would deny that; but I should like to urge upon your Lordships that there are some very real objections which must be faced and dealt with before such a tax can be imposed. You will remember that this subject was first hinted at by the present Prime Minister in another place, when he said that it was a question which involved a great deal more than the mere imposition of new taxation. The scheme which was placed before the Select Committee of 1923 on this subject contained certain salient features. It was, confined for practical reasons to professional betting; but the main features of the scheme were these—the licensing of bookmakers; the imposition of an ad valorem duty upon all stakes; the collection of the duty from the bookmakers; the registration of betting houses, and, as street betting was to remain illegal, the legalisation of cash betting off the racecourses in any licensed betting house.

I should like to say a word with regard to the comparison or analogy which has been drawn with other countries and particularly with the Dominions. I do not think the analogy is altogether a fair one. Betting in the Dominions is, broadly speaking, limited by law to the race course. Your Lordships know that that is far from being the case in this country. Something like 90 per cent. of the betting which takes place here takes place away from the race, course, and therefore an entirely different problem has to be faced here from that in other countries. I was interested to hear Lord. Liverpool say that he did not think the totalisator could be introduced into and used in this country, at any rate exclusively to begin with. I feel certain that he is correct in making that statement, and I gather that where the totalisator has been introduced it has first been made use of in conjunction with the method of betting we have here—namely, with bookmakers—and with the rather natural result in the course of time that the bookmaker has been gradually squeezed out. I mention that because I do not think the analogy between this country and the Dominions and other foreign countries is one upon which great stress can be laid.

Undoubtedly, the subject which has aroused the greatest interest and controversy in connection with this scheme is the suggestion that there should be registered betting houses. The Chairman of the Select Committee of 1923, to whom Lord Newton has several times referred, made it perfectly clear that the registration of betting houses was absolutely an essential part and feature of the scheme. I suggest that the setting up of such houses, sometimes, perhaps, in close proximity to public houses, is not a prospect, to say the least, that we can look forward to with complete equanimity; and in spite of what Lord Newton has said, there is no gainsaying the fact that it would prove a profound shock to a very large proportion of the community. It is a question that you cannot possibly ignore. But what I really wish to point out in this respect is that if this scheme was adopted it would entail a complete reversal of our policy with regard to this subject for the last seventy years and more, and surely that, is a thing that cannot be easily or lightly undertaken.

It involves, in the first place, a repeal of the Betting Houses Act, 1853, and the repeal of most of the measures in connection with this subject which have been passed since that date. The Betting Houses Act of 1853 was, as your Lordships know, passed because of the grave scandals which occurred in betting houses at that period. Public opinion was so strong on the subject that the Government of that day were compelled, practically, to pass the Betting Houses Act, and it is a possibility which we must face that if this Act were repealed and betting houses were instituted once more throughout our large cities, and perhaps in the country as well, scandals of this description might recur. But registration was considered necessary by the Committee, and for two main reasons—(1), to control the credit bookmaker, and (2), to bring within the scope of the duty the cash betting carried on illegally in the streets.

Undoubtedly the real problem is the problem of this street betting. As Lord Newton has told you, and as your Lordships are well aware, there is a vast amount of street betting indulged in throughout the country, and the question is what would really be the effect of the legalisation of betting on the general character of the population, and also, and this is very important, upon the amount of crime which is at present committed. It is generally acknowledged that a very large proportion of crimes committed by first offenders may be traced to the fact that they have got into debt by excessive betting, and undoubtedly there is a large body of opinion in the country—we cannot get away from it—which firmly believes that these new facilities and wider legalisation of betting would lead to a deplorable increase in betting, with very disastrous results. It is difficult to say whether this view is justified or not. Lord Newton holds the opposite point of view very strongly. I think it depends, to a large extent, upon the spirit in which the law would be administered when it was put into effect.

Obviously, if the main object of the law was to obtain revenue, then every facility, with certain limited restrictions, would be given to people to bet, and the supply of these betting houses would only be limited by the demand for them. Here I may say that I am not quite certain with what object in view Lord Newton suggests that this tax should be imposed. On the other hand, if his primary object were to diminish the volume of betting in the country, a totally different policy would have to be adopted. In practice, I should think that probably an endeavour would be made to compromise between those two different points of view, and to take a middle course. As I have said, I think it is very difficult to state what the effect of a tax on betting would be. I think that any forecast on the subject must be pure conjecture and guess-work. The noble Lord, as I have said, believes very strongly that it would have the effect of diminishing the volume of betting. So far as credit betting is concerned, I think probably that is the case, but with regard to street betting I think that, if you take everything into consideration, you would say that if it was made as easy to bet as it is now to buy a Postal Order at the Post Office, then the result would not be, to say the least of it, to diminish the amount of betting which is carried on at the present moment. In fact, I do not think it is certain that illegal or street betting would be eliminated altogether. I think it is very doubtful whether the police efforts to suppress this form of betting would be any more successful than now.

There is one other question which I should like to mention, although it has not been referred to, and that is the question of the validation of betting contracts. It is not part of the scheme which was submitted to the Committee of 1923, but it is a subject which is very freely discussed in connection with the whole problem. There would be, of course, objections to a law validating betting contracts mainly for this reason, that the fact that they are not recognised at the present moment is the very greatest safeguard against illegal betting in the streets, because under present conditions the stake which any particular man is able to put on a horse, or whatever other kind of animal it may be, is limited to what the backer has in his pocket at the time. If, on the other hand, betting debts were made recoverable by law, it would give a great impetus to credit betting, and might have very serious results indeed.

Another point to which I want to refer is the question of how such a tax would be received in the country generally. It has been suggested, I think Lord Newton has suggested it this afternoon, that the tax would be a very popular one. I am not so sure that he is correct in making that statement. Undoubtedly, there would be very great objection, as he has already told us to-day, from the Free Churches of the country, at any rate, and to a very considerable extent, I should imagine, from the Church of England as well. Then I know that bookmakers themselves are very strongly opposed to the proposal, and I doubt very much whether it would be popular with a large number of the people who bet. I doubt it very much indeed, for the very obvious reason that if a tax were imposed upon betting they would not be so likely to get such good odds from the bookmakers as they do now, and would quite rightly be told that the reason for that was the imposition of this tax.

May I be allowed to say a word or two on the question of the revenue which is likely to be derived from this tax if it were imposed? Lord Newton has referred to this, and I agree, from my information, with the figures he has given. It has however, been suggested that £10,000,000, and as much as, £20,000,000, might be derived from this tax. That is obviously a great exaggeration. Sir Henry Cautley stated, as Lord Newton has said, that so far as can possibly be ascertained—and I suggest the figure is a very correct one—the volume of betting transacted throughout the country yearly is about £200,000,000. There has been a very great deal of discussion on the subject of the amount of duty that ought to be imposed, but Sir Henry Cautley recommended that at first, at any rate, the tax should not exceed a 2½ per cent. ad valorem duty, and he did so because he felt strongly that it should not be too high at the first, in order that people should not be induced to evade the law, but rather encouraged to come in and try to make the law work. If you put on a 2½ per cent. duty that would bring in £5,000,000 a year, but—and here I wish to fill in a gap which Lord Newton left—in arriving at this figure no allowance is made for the evasion of duty or the exemption of laid-off bets, which I under- stand both Sir Henry Cautley and the greater number of the Committee were strongly in favour of granting. In the circumstances it is very unlikely that in the first full year of the duty the receipts would exceed £3,000,000. In the first year they would probably be very small indeed.

I have tried to state briefly what the difficulties are in this case. I hope I have not given your Lordships the impression, by what I have said, that the Government do not intend further to examine this question. That is not the case. In these times of financial stress and stringency the Government certainly mean to explore every avenue, in order to try to find new and legitimate sources of revenue; but while they do realise the advantages which are to be derived from such a tax, I wish to point out and emphasise that the Government cannot possibly ignore the fact that there are very serious difficulties and objections. These difficulties must be faced, and they must be dealt with or overcome before a tax can possibly be imposed. I am sure your Lordships will agree that in the circumstances it is obviously impossible for me this afternoon, on behalf of the Government, to give any definite undertaking which would in any way interfere with or embarrass the freedom of decision of the Chancellor of the Exchequer with regard to this matter in view of future Budgets.


My Lords, this, as the noble Lord, Lord Newton, reminded your Lordships, is by no means the first time that he has brought forward a proposal for a tax on betting. On this occasion, so far as the words of the Motion are concerned, he rests his case upon the ground that a betting tax should be imposed as a fiscal instrument. It is quite true that in the course of his observations he carried his argument a little further than that, and, indeed, it is impossible to confine a speech upon the betting tax entirely to such a tax as a, revenue-raising instrument, though, as far as I am concerned, I shall endeavour to discuss the fiscal side of the problem. The reason why that cannot be done entirely is that changes have to be made, as the noble Earl, Lord Plymouth, pointed out, before a betting tax could come into being at all. The tax would require a certain degree of State control, and certain machinery would have to be set up which would make a great change in the attitude of the State towards betting. The noble Earl has just pointed out that it would be necessary to license bookmakers and to have licensed betting offices. That means that in future betting would be legalised. That is a very great change. Hitherto the State has not regarded betting as fit for legal recognition, but if this tax were imposed legal recognition is necessarily involved and therefore the proposal of Lord Newton is fundamental. Whatever the noble Lord may say about the Nonconformist conscience, or anybody else's conscience, he knows as well as I do that this proposal would evoke very great opposition among large sections of the population.

He twitted me—I am not objecting to it, I always enjoy his badinage; in fact, I regard his speeches in your Lordships' House as one of the greatest pleasures which I enjoy here—he twitted me with having been a stockbroker and asked how I could reconcile that with opposition to the betting tax. This is really rather a personal matter, but I will say that I never bet myself and I am opposed to betting. Although I am not basing my opposition to this tax on moral grounds, I think a very strong case can be made out on those grounds. I do not wish to be drawn into a long dissertation on the difference between betting and transactions on the Stock Exchange, but I will say that the two things are fundamentally different. There is no difference in principle between buying stocks or shares on the Stock Exchange and buying a house and land, and I do not think that the noble Lord will compare the latter operation with betting.

There is a good deal of controversy as to whether a tax on betting will decrease or increase betting. Much can be said on both sides. The noble Lord, Lord Newton, argues that it will decrease betting. It is a little unfortunate for him that several members of the Select Committee came to precisely the opposite conclusion. They did that because they considered that the licensing of bookmakers and the setting up of licensed betting offices would increase the facilities for betting and, therefore, would increase betting. Street betting, which at present is illegal, although it is very largely carried on, could in future be car- ried on in complete security. Moreover, street betting is at the present time very largely confined to the big towns and the great centres of industry. But if licensed betting offices are to be set up all over the country, it seems very probable that betting will increase largely in the smaller towns and in the rural districts. So I say that it is not surprising that many people take the view that a tax on betting would increase betting.

The noble Earl, Lord Liverpool, spoke about the effect in this regard of a tax in the Dominions, and he put forward certain figures and considerations to show that in his opinion the tax did not increase betting. There is a great deal of difference of opinion and conflict of evidence upon that point. When I was a member of the late Government I had more opportunity for going into this than I have now, and I found that there was a good deal of evidence to show that the result of a tax in the Dominions has been to increase betting, or, at any rate, that betting has increased largely, although there is a tax there. There is also a good deal of evidence to show that in New Zealand, despite the betting tax, the increase in betting has been very much greater than the increase in this country. I would refer the noble Lord to page 323 of the Select Committee's Report, where evidence on that point is given. Mr. Isaac Foot, who is a great authority on this tax, also said that the evidence from the Dominions goes to show that a considerable increase in betting has followed State sanction in any specific way.

I now come to the fiscal side of the question. My task there has been very much lightened by the speech to which we have just listened. I was going to put the matter pretty much as the noble Earl, Lord Plymouth, has done. I was going back to the figures which I gave last year, because my noble friend Lord Newton challenged those figures, but I do not think that he challenged them in any very close or scientific way. My noble friend cites for his purpose, when he wants it, the Report of the Select Committee on Betting, as he does in his Motion, and then, when he comes to a point—one of the chief points in the whole matter—which has been worked out by the Chairman, Sir Henry Cautley, in his draft Report, and that does not suit the noble Lord, apparently he dis- cards it. It seems rather like "Heads I win, tails you lose." If this Report is such a good one, then I think that the noble Lord ought more or less to adhere to it throughout. The fact does remain however much may be said to the contrary, that the investigations of the Select Committee seemed to show that the annual turnover on betting was round about £200,000,000, and Sir Henry Cautley was strongly of opinion that the rate of the tax should be two and a-half per cent.

The noble Earl, Lord Liverpool, gave certain figures suggesting other taxes as well, arriving altogether at a considerably greater percentage than two and a half, but—and this is vital to a consideration of this matter—those figures were based, I think, entirely upon a tax done through totalisators, and yet the noble Lord destroyed his own argument when he told your Lordships a moment or two later that we could not have totalisators in this country to any extent, at all events for a long time. Even Lord Newton, in his opening remarks, admitted that ninety per cent. of the betting is done away from the racecourses. I should not have put it so high myself.


That is the evidence before the Committee.


Very well, that does not make it any easier to introduce a betting tax through the operation of totalisators. The conditions in the Dominions are different. The tax there is levied by means of totalisators. If you were going to have a betting tax, and if all the betting in this country—which is not the case, and, as far as anyone can see, never will be the case—were done through totalisators, then I agree that, so far as the rate of the tax is concerned, that could be higher. I dare say you could have ten per cent., because you could get the money by that means. But here it is different. The noble Earl, Lord Plymouth, pointed out that Sir Henry Cautley had omitted from his draft Report the most important consideration—the evasion that would take place upon this amount of £200,000,000. I think that the amount for taxable purposes would be reduced by evasion to well below £150,000,000. Then there are other considerations which might even bring it below that. On the other hand, it might be—I am quite prepared to argue it myself—that in rural districts and small towns, owing to the setting up of licensed betting offices, there would be some increase in the betting; so that probably, altogether, we should not be far wrong in taking a figure of about £150,000,000. Two and a-half per cent. upon that amount is £3,750,000, and if you take off the cost of collection you bring that down to about £3,500,000, which is the very figure I suggested last year.

I have always attempted in any financial statement I have made, or figures I have given, to be moderate, but I find that I really put the yield too high, because the noble Earl, Lord Plymouth, has said, to-day, that the actual yield, at any rate in the first year or so, would not be above £3,000,000. There is not very much between us; but there is a very great deal between us and the noble Lord, Lord Newton, and the noble Earl, Lord Liverpool, who talked about £10,000,000, or £20,000,000, or £25,000,000. All I will say about that is that the figures which I have given and those which the noble Earl, Lord Plymouth, has given are the only figures which are based on any real authority. They are the only figures which are based upon the investigations of a Select Committee, and I think they are much more likely to be right than mere guesses, especially guesses made by those who favour the tax and therefore are naturally inclined to guess in a certain direction. For my own part, unless and until these figures are proved to be wrong, I propose to adopt them for the purposes of argument, and I will continue my speech on that basis.

As a matter of fact, if the yield should be a little more or a little less it would not be very material to the argument. And here I will pick my words with great care, because I have been taken to task by the noble Lord, Lord Newton, as I was last year, on a complete misunderstanding and, indeed, I may say, though it was unintentional, a complete misrepresentation of what I said. I have never said that £3,500,000 was a niggardly sum in itself. Of course it is not, as I will show your Lordships. What I have said is that £3,500,000 is a very disappointing sum and, if you like to use the word, a niggardly sum in relation to the extravagant estimates which have been put forward as the yield of this tax. That is a very different way of looking at the matter. It is a matter of perspective. If you compare £3,500,000 with £25,000,000 it is obviously a very disappointing result.

The noble Lord, Lord Newton, asks in his Notice whether the Government will consider this tax for the purpose "of providing an additional and immediate annual revenue and thereby diminishing some of the crushing burdens on industry." We want to diminish some of the crushing burdens on industry, but you will not do a very great deal in that direction by this tax because of the figures which I have given and which have been confirmed by the noble Earl, Lord Plymouth. It is clear that as a way out of present difficulties this tax does not open up a very hopeful avenue either to the Government or to anybody else. What, after all, is the financial position of the country to-day? The expenditure this year amounts to £801,060,000—let us say £800,000,000. £3,500,000 is less than half of one per cent. of that annual expenditure. It is a little more than a halfpenny on the Income Tax, and although many persons would not object to a reduction even of a halfpenny on the Income Tax, it is not possible to contend by any proper use of language that any such reduction would, in the words of the Motion, diminish some of the crushing burdens on industry.

While I say that, and it is perfectly true—I am trying to put this matter in its right perspective—I would ask that on this occasion no noble Lord will get up hereafter and say that Labour Peers do not mind about odd millions, or will indulge in the usual and baseless gibe about Labour extravagance. As a matter of fact it is the present Government, a Conservative Government, which is the most extravagant Government of the present time, at any rate since the War. It is the present Government, a Conservative Government, which for the first time since the War has increased the national expenditure. It is the, present Government, a Conservative Government, which is spending many millions more than the Labour Government spent last year. Its expenditure on armaments, for instance, is not merely extravagant but profligate. So that I ask that noble Lords will not indulge in irrelevant and baseless talk about Labour extravagance.

Let us face the facts. I have always said that £3,500,000 is in itself a sum well worth having, and if it can be got by sound taxation, by all means let it be got, and it will be thankfully received. It will certainly be thankfully received by the present Government with its reckless financial policy, because of the difficulties that are crowding upon them thick and fast. Their sore need of money is becoming more urgent every day. The fact is that the unwisdom, I might say the folly, almost the criminality, of having given away £42,000,000 early in this year to the Income Tax and Super-Tax payers is becoming increasingly evident, and what will be the condition of the national finances hereafter is a problem from which the mind turns wearily aside. The fact is that the financial position of the country is so grave that £3,500,000 is yell worth having if it can be got by sound means, but it will not do very much to help the country in its grave difficulties. I submit that it is not a wise proceeding to ask the Government to set up complicated machinery to reverse the traditional attitude of the State towards betting and to arouse very strong moral opposition in a great many quarters, in order to obtain, when all has been done, if it can be done, a sum of £3,500,000. That is my case, and that is why I said last year and why, with all deference to the noble Earl, Lord Liverpool, I repeat that it is not a business proposition.

In conclusion, I wish to touch upon a point to which the noble Lord, Lord Newton, referred. It really arises out of the three fundamental principles of sound taxation, which I may remind your Lordships are that a tax should equitable, economically sound, and productive. A betting tax may be equitable; it is very doubtful whether it is economically sound; but it is not in the proper sense of the word "productive." So I say that a betting tax comes into that category of taxes known as fancy taxes which have not, at any rate in modern times, formed part of the system of taxation of this country. I was rather taken to task by the noble Lord, Lord Newton, because I had said that our system of taxation was the best in the world. He called me something, I am not sure what it was, but I really do not mind what I am or am not called. If I think we have something in this country which is good—and I often think so—I shall say so. But I say that we have the best tax system in the world, as the experience of the last few years has proved, and for my part I shall oppose debasing—if I may use that word, because that is my opinion of what it will be—that tax system by the introduction of one of those fancy taxes which do not conform to the principles of sound taxation.

Quite apart from other considerations, I honestly believe that the introduction of this tax would, in a certain way, be be injurious to the national credit. I evoked the adverse comments of the noble Lord, Lord Newton, because I said something of the sort last year, and he seemed to think that the Socialist Government had no particular interest in that matter. I will just say in regard to that, I have not noticed any very particular concern, apart from their words and speeches, which cost nothing, on the part of His Majesty's Government to do anything for the national credit. But the fact does remain that when the Socialist Government came into power many stocks went up, and it is absolutely certain that under the régime of the Socialist Government industry was far better than it has been under the régime of the present Government. There can be no dispute about that. It is not a matter of controversy; it is a matter that can be proved. I believe that the introduction of this tax would in certain senses be injurious to the national credit. Whether the Government will introduce such a tax or not, of course I cannot say. It seems rather doubtful. Personally, as I have said, I very much hope that they will not. You may ask, why will it be injurious to the national credit? Quite apart from other considerations, for this reason, that it would be taken, I firmly believe, as a bad sign both at home and abroad in financial circles, for it would be said that at last we are in such straits that in order to try and balance our Budget, we are driven to resort to one of those fancy taxes which hitherto have been rejected as unworthy of a place in our tax system.


My Lords, I must confess that, unlike the noble Lord who has just sat down, I cannot pretend to any knowledge of the matter under discussion, and if personal knowledge were, indeed, a criterion, I should be quite unable to add anything to your Lordships' discussion this afternoon. In this state of ignorance I shall not venture to detain your Lordships very long, still less shall I wander into the general discussion as to the extravagance of this or the late Government, upon which the noble Lord who has just sat down embarked. I will only say, in passing, that however often he may say it is wrong for us to accuse the Labour Party of extravagance, I shall continue to say so so long as I think it to be the case. Further, it hardly lies with him, as a member of the Government which supported the new race in armaments by building the new cruisers last year, to charge His Majesty's Government with being much worse sinners than the Government of which he himself was a member. I prefer, however, to keep to the point which is under discussion.

It seems to me, after a perusal of the Blue-book, that it is very important, if possible, that the general question of street betting should be taken into consideration by His Majesty's Government, and that it should be dealt with in some way. The present situation is a most unsatisfactory one. The public sympathy is with the breakers of the law, and that, of course, is always an unfortunate situation. When the Government do come to deal with the matter the question of a tax on betting will certainly arise. It is striking, if you look at the figures, to see the amount of money which was spent by the people of New Zealand upon betting. Let us remember in their case that every difficulty is put in their way. You cannot do any betting except betting on horse racing. You cannot do any betting at a distance, you must do it all through the totalisator. In spite of this fact, we find that something like £7,750,000 was paid by -the people of New Zealand numbering some 1,250,000. That is a very remarkable fact. Circumstances here are entirely different, and they certainly would not change for a considerable period. I think it is quite evident that the facilities which are given to betting in this country, the habits of the people in this country, the fact that they bet upon a great many other things besides horse races, the fact that they would be able to bet without being present themselves on the course, would make them spend a very much larger sum of money than we see is wagered even by the people of New Zealand at the present time.

Therefore, approaching it from that angle, it seems to me that the sum of £200,000,000, which has been mentioned as the amount that would be taxed, would be very much greater in the different circumstances which exist in this country as compared with New Zealand. I think the sum of £200,000,000 is a perfectly fair sum to take supposing that there were the difficulties which exist in New Zealand, but in view of the facilities for betting that exist here I believe the sum would be very much larger indeed. Although the matter is not wholly proved, I think there is evidence to show that the existence of the totalisator in New Zealand does tend to reduce the amount of money that is wasted in this direction. That, I think, is one of the objects we should have at heart, and try to bring about. In the present state of things it seems to me that the real thing is to find a new source of taxation, and that does make it very desirable that the matter should at least be thoroughly explored by His Majesty's Government. Not only is betting not necessary, but it does positive harm to the people of this country, and anything which can be done to reduce the amount of money that is wasted on betting would surely be a good thing. I believe that taxation will be a step in that direction, certainly in view of the conclusion of the Committee that it was a practical thing to tax betting. Leaving the matter of desirability on one side, it is evident that His Majesty's Government might very well pursue their investigations in this respect, and if, when the time comes, they see their way to propose a tax on betting I am sure no one could be better pleased than I should be.


My Lords, I am obliged to leave the House in a short time, and I hope noble Lords will allow me to intervene now for a few moments to say one word as to the position in which I stand. I am extremely obliged to the noble Earl who has just sat down for his gallant defence of His Majesty's Government against the assault which it suffered at the hands of the noble Lord opposite. I think his defence was so complete that I might almost leave it at that. But I was a little sorry that into a very businesslike discussion upon what ought or ought not to be an addition to the fiscal resources of this country the noble Lord opposite should have suddenly plunged into a Party attack upon His Majesty's Government. So far as I am aware, until the noble Lord rose, there was no Party question that had been submitted to the House at all.


I am extremely sorry to interrupt the noble Marquess, but I think it is important to point out that the words of the Motion deal with the crushing burdens on industry. That is where the relevancy of what I said comes in.


No one denies the crushing burdens on industry. The noble Lord seems to think it is a Party question. We all know it, and we all deplore it, and when the noble Lord charges us with extravagance, I wish he had spent as many hours as I have in the last few months in helping my colleagues to reduce expenditure in all directions. I think if he knew the efforts which we have made, and are making, he would be the last man to accuse us of remissness in the cause of economy. When he begins to trumpet in loud and strident tones the virtues of the Labour Party and the Socialist Government, I would reply to him that the only contribution I can remember his and his friends making to the cause of economy in the present year was an attempt to try to convert the contributory pensions scheme of the Government into a non-contributory scheme. A very much larger sum of money would have been thrown upon the shoulders of the taxpayers if he and his friends had been so fortunate as to prevail upon your Lordships and upon Parliament to agree with them. We are intent at the present moment upon far too grave matters, the fiscal policy of the country and the necessity of economy, to waste further time upon a purely Party issue.

I cannot for myself share the noble Lord's indifference to any considerable sum of money which might be obtained for the Chancellor of the Exchequer by what he calls fancy taxation. He says that it is only £3,500,000, as if it was only three-halfpence that the Government could possibly gain by this taxation. Whether that be true or not, whether the tax be a good one or not, let it, be quite understood that we do not despise £3,500,000 of national revenue. On the contrary if we approached the national resources in the spirit of the noble Lord, not, caring how many sums of £3,500,000 he lost, then the country, so far from being more economically run, as we are trying to make it, would be ruined and bankrupt. I do not understand what is meant by fancy taxation, but I do know that there is a great analogy—in some respects a rather sinister analogy—between the taxation of betting and the taxation of alcohol. Even the noble Lord would not have the hardihood to condemn the taxation of alcohol as fancy taxation.

We are not disposed to meet my noble friend's proposition with a negative, because we are not going to anticipate what may be the decision of the Government when they come to consider the financial policy of the country in the near future. We are alive to the great difficulties of the situation and, as the noble Earl said who has just sat down, it is our duty to explore every one of these proposals with a view to seeing if something cannot be done upon them. Although we approach it in that spirit and are not prepared to meet my noble friend's Motion with a negative, that does not mean that we do not see difficulties in the road of this taxation. The noble Earl, Lord Plymouth, who spoke so well on behalf of the Government just now, explained to your Lordships in great detail in what those difficulties consist. They are very formidable, formidable partly from the point of view of most legitimate public opinion in this country, but also formidable from the material side—the difficulty of enforcing a tax, the necessary consequences of the tax, all the difficulties which surround registration, the difficulty of the vested interests which must grow up under registration, vested interests almost exactly analogous to the condition of things which prevails in public-houses at this moment. Everybody knows, whatever their views may be on temperance reform or on the liquor question, what an immense difficulty is presented by the vested interests in the liquor trade. All these things are very difficult and, so far as we have been able to examine the maker, the difficulties do not diminish on being looked into. That will not deter us from exploring every avenue with a view to providing the necessary revenue for the country:

Turning to my noble friend's Motion, may I make one criticism? It does not at present read, a thing which is very unusual in an utterance of my noble friend. What happened evidently was that, my noble friend originally intended to put a question to His Majesty's Government and then, as he warmed to the work and saw what a magnificent speech he was going to make, he turned it into a Motion. He turned the first sentence into a Motion and left the last sentence as a Question. I agree with his Question much more than I do with his Motion, for I do not think that in the present position, after the consideration which the Government have given to the matter, we can pronounce either for or against him when he says that betting shall be taxed. We cannot at this time of the year make a pronouncement which really belongs to the, Budget, and the Government cannot vote in that sense.

If he confines himself to "Whether His Majesty's Government will consider the advisability of patting into operation the scheme declared to be practicable by the Betting Committee in 1923," we shall be very glad to consider it. If he chooses to put his Motion in that form His Majesty's Government will be very glad to vote in the Lobby with him. If on the other hand he definitely wishes to lay it down that betting should be taxed—I do not know what support he has in your Lordships' House—we will take no part in the Division. We cannot vote against him as it would be as bad as voting for him. I suggest that he should be content with the second sentence of his Motion. If he does that the Government will support him; if not, the Government will take no part in the Division.


My Lords, I am not surprised Lord Arnold should have shown in his speech so intense an anxiety to relieve the Socialist Government, of which he was a member, and himself from the charge of financial incompetence. I can quite understand his desire to do that, but when he went on into what I hope I shall not be considered rude in saying was a totally irrelevant disquisition on the alleged extravagance of His Majesty's present Government, I do not propose to follow him. It was not only quite irrelevant, but quite ill-founded. It had no more relevance to this Motion than if we were to talk about the Communist debate last night or the proposed loan of £40,000,000 by the Socialist Government to Russia last year.

I propose to put aside that very considerable part of Lord Arnold's speech and for a few moments to address myself to the subject of the debate. There is one common ground of agreement which appeared in every speech made to-night, and that is that this tax will undoubtedly produce a substantial sum of money, whether £3,500,000 or £5,000,000 or a larger sum no one can predict. Even the noble Lord who spoke, with his great financial knowledge, declined to pledge himself that it would be as low as £3,500,000. Whatever it is we want to get it, if it is a good tax, and there are no grave objections from any source. Therefore, seeing that it is going to produce money if it is imposed, the onus of showing adequate reason against the taxation is upon those who oppose it.

Let me shortly consider the reasons which have been given against the proposal. The noble Lord talks of a fancy tax. I cannot imagine what a fancy tax means. He gave no definition of it. Let me come to the more substantial reasons which have been suggested against it. One reason, and perhaps the main reason, is that betting is wrong and it would be improper for the State to recognise it by getting money out of it. I dispute both those propositions. Betting certainly is not illegal, except certain forms of it. Personally, I do not think it is wrong, and in this I am speaking all the more freely because I do not care about betting myself, not from any moral elevation but because I have never been able to make anything out of it. The time spent on it has been very badly spent as far as any return is considered. But if is not wrong, and I think it affords, very often a legitimate variety in the dull lives of monotony which many of the people of this country have to undergo. I am speaking of betting in moderation. There are other things which are legitimate and proper in moderation; the vice is found in the excess. Take drink. Many people, I might say most people, do not consider that drink is wrong. They say that in moderation it is right. I say the same of betting; and if that is so why should the State object to taking money out of it?

What does the State do at the moment? The State already collects enormous sums of money out of telegrams and telephones, without which betting could not go on. I have heard of one firm of betting agents who pay £2,000 and £3,000 a year for telephone purposes alone. And the State already gets Income Tax from the profits of betting, openly and avowedly from the profits, because a man who makes his Income Tax return has to say where his income comes from, and the State has no hesitation in taking its proper proportion from the man who makes a profit by betting. Am I to be told that it is more wrong to get Income Tax from betting at its source than to take it when the contracts have matured and the bookmaker makes a profit? That argument really rests on a certain amount of conscious or unconscious hypocrisy. I am told that if you bad this new system of betting and you taxed it, there would be an increase. There is a great difference of opinion on that point. The really important point is this: Can any one allege that if there was a tax on betting there would be a large increase in immoderate betting? I do not think the moderate betting matters at all. If there was an excess in betting there might be some reason for objecting to the tax.

The last point I desire to refer to is street betting. To me street betting is the worst kind of betting. Men are caught as they come out of the factories and workshops by the betting agents' touts, and very often make bets which they would not have made but for the touts. It is illegal, and unfortunately if, is difficult to stop it, but there is ground for believing that if the recommendations of the Committee were adopted street betting would be largely diminished. On the whole I am glad that His Majesty's Government have not shut out the possibility of getting this money from a tax on betting, money which we badly want, and unless the arguments adduced in another place are stronger than those adduced here by the noble Lord, I hope the proposal will go through.


My Lords, I have had some personal knowledge of the working of State taxation of betting. In the State in which I lived there was a curious combination, in which the Free Churches took part, with the result that the totalisator was excluded from the State of Victoria. Living on the borders of New South Wales for some years, I visited that State more or less frequently. There I saw something of the operation of taxation of betting which is proposed here to-night. In the State of New South Wales there is a great variety of taxes upon betting and the racing community. The State does not confine itself to taking something out of their pockets by means of a tax on the totalisator. They are taxed, as was said in another connection, from the cradle to the grave; certainly from their entrance on to the race course until they go out of it. There are four or five different forms of taxes imposed on racing men in that State. In the first place the bookmakers have to be licensed by the clubs where they operate, and out of these license fees there is a sum deducted, from 50 per cent. down, to 20 per cent., and collected by the State. That tax alone produced, for 1921, £108,000 or £109,000. When the betting man has got into the race course he has offered to him the option of betting with the bookmakers or with the totalisator. If he elects to bet with the bookmakers his betting ticket has to have a revenue stamp attached to it, again of a varying amount; 3d. in the saddling paddock, 1d. outside the paddock, and 2d. elsewhere; and that same stamp has to be put upon any betting transactions which are conducted by credit with the bookmaker. That small tax amounted in 1921 in New South Wales to £96,000.

Then we come to the principal source of revenue, the taxation on the investments in the totalisator. It is run by the clubs; but there is a deduction from every bet of no less than 13½ per cent. of the stake deposited. One per cent. of that goes towards repaying the capital of the totalisator. According as to whether the club is a proprietory club run for profit or a club which is run as a club, the State takes a varying amount. If the club is run for profit, the State takes 9 per cent. of the stake as a tax. If it is run as a club, the State takes 5½ per cent. The total thus collected amounted to 1921 to £274,000. That is not the end of the taxation. There is a taxation upon the ticket of admission into the race course amounting to 2d. on the flat—that is, the cheaper places where the general public go on the payment of 1s. of 6d.—rising up to 3s. 2d. for men and 1s. 7d. for women. I do not understand why there is this discrimination between the sexes, but, in fact, under the law women are taxed at half the price that men are in New South Wales. If you are a member of a racing club, or hold a season ticket, you do not escape the tax on the entrance fee, because 40 per cent. of the season ticket and member's subscription is collected from the clubs, and that amount is pad into the revenue, with the total result that £597,000 in that particular year was collected by the State out of the racing community, or a sum equivalent to about 5s. 6d. per head of the population of New South Wales. It is a substantial amount.

I do not propose to enter into the rather wider discussion raised by the noble Lord on the Front Opposition Bench, beyond suing this, that he laid down three criteria of taxation. I venture to add a fourth, which I recommend to him and any other founder or inventor of a taxation system. It is that, a tax should be comprehensible, as well as productive and the other things which he mentioned. I think that this tax, whatever faults it may have, at least answers that criterion to a greater extent than some other taxes that I can mention. I could mention other taxes which are far less easy to be comprehended by the taxpayer than this system of taxing betting and racing which has been adopted in New South Wales. It has been said that it would be difficult to raise the same proportion of money in this country as is being raised in the Dominions. I do not know quite why that should be said. There is no doubt that when you have to introduce a tax in the first instance whether it be an Income Tax or any other, it is perhaps wise to begin gently, so as to accustom the eel to being skinned; but the experience of most taxpayers is that while a tax in the first instance is a light one it is possible so to increase it as to bring in a very considerable amount.

So, in the Dominions, taxation on betting has been imposed in the first instance on a comparatively moderate scale, and it has been raised to produce the substantial amount that I have mentioned, and I believe that in this country, too, we may, by beginning with a comparatively small sum of £3,500,000, which Lord Arnold mentioned, ultimately within a few years reach that glorious position held out by Lord Newton, of collecting £25,000,000 a year. Nor is it an answer, I think, to say that you cannot do this without the totalisator. No doubt that does give greater opportunities of easier collection, but they have found it perfectly possible in New South Wales to have a system of taxation whereby those who prefer to bet through a bookmaker do make a contribution to the funds of the State.

May I say a word or two about whether the totalisator increases the amount of betting? It is a matter of opinion, but of opinion which can be formed by observing conditions. I have no absolute figures, and I do not think that any are available on the subject, but I think the experience of those who have watched the operation of betting in New South Wales, where the totalisator is being introduced, would force them to the honest conclusion that there are probably more people who bet where there is a totalisator. It is a machine, and it is always easier to talk to a machine than to a man. There is a certain shyness in going up to a bookmaker, for fear of exposing one's ignorance, and for that reason a good many women abstain from betting; they do not like to face the possible jeers or smiles of the bookmaker. The totalisator cannot put on any expression of contempt. It takes your money, and if you are fortunate it pays out a dividend, and there is no doubt a considerable increase of small betting, because the totalisator takes bets of 5s. and 10s. and £1. There is no doubt that there is a considerable increase in the number of people who make wagers, but, on the other hand, I think it is very probable that there is less temptation on the part of the ordinary betting person to indulge in excessive betting. It is purely a ready-money transaction. You have got to put in your Treasury note to make your bet, and it has been discovered that, in fact, the ordinary person who bets may take £1, £2 or £3 to a race meeting, and when that is gone he stops betting, whereas, if he bets with a bookmaker, there is a temptation after he has lost to bet on credit. Therefore, while the number of bets tends to increase, the amount staked has not been increased by the introduction of the totalisator.

We are told, however, that the totalisator can hardly be introduced in this country, and I am inclined to agree that there is a good deal in that. The racecourses in New South Wales are of limited number, and if you are going to introduce a machine you must use it frequently to get full value. You cannot have a machine running into hundreds of thousands of pounds introduced merely to use it on one or two days of the year. In this country we have a large number of racecourses with only one or two annual meetings, and the total expense therefore for a country meeting would be rather prohibitive. But the totalisator is not the only means of dealing with betting. We have been told that if you are to have this system of State betting you must legalise State betting houses. I dare say that is so, but we must face the facts. Any man, woman or child who wishes to make a bet can do so. I do not know whether your Lordships have had my experience of the noises which take place below stairs after some important race meeting, when the evening newspapers come in—the sounds of cheerfulness or the reverse. I do not inquire too closely into what has taken place, but we all know that nearly all menservants in this country, and a very large proportion of women servants, too, make their bets somehow or other. I have never made a bet myself, except an occasional one on the totalisator in New South Wales, but betting is possible and any person who wishes to do so can make a bet.

If that is the case, and I think it is, ought we not to realise the facts as they are? If, in fact, a very large majority of the population do indulge in betting, it will be better to face the facts and to say: "If you will bet, at least you shall bet under conditions which are made honest by means of Government supervision, and you shall contribute something towards the Government of the country by means of taxation." I ask whether, in fact, the legalisation of betting or the making of betting more easy by means of Government control increases betting. My experience of Australia certainly is this, that betting rises and falls with prosperity, that when people have money in their pockets they bet, and when they have less money in their pockets there is less betting. The takings of the, totalisator in Sydney, and, I think, in every other State where totalisators exist, are very nearly an accurate reflection of the temporary prosperity of the people. When shearing has taken place and the people have money in their pockets the amount put in goes up; when there is a drought the amount falls. The fact is that betting is complementary to prosperity. If that be the case, then I do not think there is any very serious danger in modified State recognition of betting.

At present betting does take place, and you are not preventing it by all your Gaming House Acts and all your legislation. Betting is increasing in spite of that legislation, and will increase so long as people have money to spare. Let us face the facts. Let us recognise that betting is an amiable eccentricity, if you like—I do not think it is worse than that—and out of the amiable eccentricities of the public let us get a contribution to the taxes, which may grow to something very much more as we learn how best to impose this taxation of a luxury. To my mind it can hardly be described as fancy taxation, but it is a very proper taxation imposed upon those who can best afford it.


My Lords, the scheme before us, I take it, is a scheme proposed by the Select Committee, and it boils down to this, that a registered office for betting may be set up in every village in the country. It certainly will be set up in all the small towns, and it will make betting very much easier than it is at present. What would be very likely to happen would be this: a big firm of betting men in London would want to increase their business, and they would have agents in nearly every town in the country, working most likely on commission. The more business they do, the more profit they will make, so that they will try to get as much betting done in the town or village as they possibly can. At present betting is easy for the rich, and not so easy for the poor. I do not look upon that m quite such an ill as some people do, because a great many small people in the villages cannot afford to bet. Still, there is an anomaly, and perhaps an injustice; but, in spite of that I should be very much against providing the facility of a betting office in every little town in the Kingdom. I think it would lead to a great deal more betting and would be a very bad thing.

On the other hand, I think there is a great deal to be said for having a totalisator or a pari-mutuel an the racecourse itself. That does not mean any legislation whatever. The racecourse is a place where betting is allowed, therefore putting up totalisators at race meetings would not interfere with anybody. I should not do away with bookmakers. My principal object is not revenue, although I believe a good deal of revenue would be obtained. My principal reason for advocating this is that the racecourse is now a very rowdy place. There are all sorts of roughs, and they stick at nothing even murder, almost. I think totalisators would do away with a lot of the worst of the betting men and the entourage of low-class betting men, and I believe it would purify the racecourse to a considerable extent I was fortified in that view by reading an article in one of the sporting papers. They are all against legislation for betting, but this article did admit that if you had a totalisator on the racecourse rowdyism would be very much decreased. At the present time it is almost a danger for any well-dressed, respectable man to go on a racecourse. We all know the riots and rows that there have been there. I dare say you might obtain £2,000,000, or £3,000,000, or £4,000,000 if you took 10 per cent. of the money in the totalisators, but, as I say, it is not for that reason only that I advocate this change, but so that the racecourse might become a more respectable and decent place to which people might go.


My Lords, as the noble Lord who introduced this subject referred a little contemptuously to the minority which voted against him on the last occasion when this matter was brought up, and I propose again to vote against him, I should like to state one or two of the reasons why I am unable to support him. I am not for a moment arguing that betting in itself is wrong but I am impressed, as I think most of us are impressed, with the enormous amount of evil and misfortune which arises out of excessive betting. There is no magistrate or police court missionary, no one who is familiar with the lives of the working classes, who is not fully conscious of the enormous amount of evil caused by excessive betting. We were discussing yesterday a Bill dealing with moneylenders. A great deal a the evil caused by people resorting to moneylenders is due to excessive betting. The one question, therefore, which I, in considering my vote, have to ask myself is: Is this taxation of betting likely to decrease or to increase the total amount of betting in the country?

If it were a question of taxation only I should have very little hesitation in saying that taxation would probably decrease the amount of betting. I have no sympathy with those who feel conscientious objections about taking money raised from the taxation of betting. If I dislike a thing intensely I should all the more favour taxing it. Therefore, simply from the point of view of taxation, I am not opposing this proposal, but I do dread the recognition of the very large number of bookmakers who are to be found up and down the country. We are not dealing merely with a few well-known, respectable bookmakers, but with a vast company of men who are to be found in every industrial centre. There is a bookmaker in the background with his touts or runners, as I think they are called, who visit every street regularly. Under those there are people who are technically known in London, at any rate, as "the narks," who watch to see that the proceedings are not interfered with by the police. If this vast body of bookmakers is protected by the State betting will be made very much easier and, as has already been pointed out, there will not only be recognised bookmakers in the great centres of industry, but also in the towns and villages, carrying on their business under the protection of the State. Therefore, I must vote, if necessary with the minority, against the Motion.


My Lords, I rise in consequence of the appeal made to me by my noble friend Lord Salisbury to alter the wording of this Motion. I recognise that it is defective and as the first portion of it is not of essential importance I am prepared to accept his suggestion. At the same time, I cannot help remembering with some pangs of regret that when I moved a similar Motion rather more than a year ago, the whole of the Conservative Front Bench voted wholeheartedly for a direct tax upon betting, as has been suggested this afternoon. It only shows to how much variation one's opinions are liable. I confess that I heard the speech of my noble friend Lord Plymouth with a considerable amount of disappointment and I cannot help thinking that when his chief, the Chancellor of the Exchequer, deals with this question he will treat it in a, very different manner, and it will not surprise me in the least if he brings forward this proposal as a new and original idea of his own. At all events, I am satisfied with the debate to this extent—that I have not met with a direct negative and I have considerable hopes as to what the future may bring forth. The Motion, as amended, will read as follows: That it is desirable that His Majesty's Government should consider the advisability of putting into operation the scheme declared to be practicable by the Betting Committee in 1923

Original Motion, by leave, withdrawn, and, on Question, substituted Motion agreed to.