§ 3.22 p.m.
§ LORD STONHAM
My Lords, I beg to move that the Horserace Betting Levy Bill be read a second time. I believe that in commending this Bill to your Lordships I should declare an interest—in fact, two interests, neither of them financial. The first interest is that when the Betting Levy Bill was being con- 598 sidered in the House on Second Reading in 1961 I supported not only its purposes but also the way in which it was proposed to carry them out. The second interest is in the sport itself, than which, in my view, intrinsically there is none finer. It used to be called the sport of kings, and certainly if it is that no longer it is still a sport fit for a king. Although it has never fallen to my lot, I can imagine no greater thrill than owning and racing a thoroughbred horse. It is a sport in which for centuries we led the world, and in which English bloodstock still holds its own with the world's best.
But in the last two or three decades we have fallen behind. We have fallen behind in the level of race prizes, and certainly we have fallen behind with amenities for racegoers, compared with the United States, France and some other countries. In 1961, when we had the first Bill before us, it seemed to me right, and it seems right now, that the bookmakers, who have the chief financial interest in the prosperity of racing, should pay annually a tiny fraction of their takings towards the maintenance and improvement of the sport. It also seemed to me right that although we were imposing a statutory obligation to pay the levy, we should at the same time accord the bookmakers a major element of self-government in the matter. It is always easy to be wise after the event, but I find myself in the position of advising the House that although the purposes of the 1961 Act have stood the test of time and have proved an outstanding success, in my view the machinery then devised, particularly in respect to the participation and co-operation of bookmakers, has broken down. Hence the need for the short Bill which is now before your Lordships.
The levy has so far raised about £17 million. Of this, over £51- million has been spent on improvements and modernisation of racecourses, and another £4 million on prize money. Transport of racehorses has taken just over El/ million and now defrays the greater part of the cost of transport to owners. Veterinary science has benefited to the tune of £500,000. Racing has been made cleaner and fairer by the measures taken to prevent doping of horses, including security guards, which account for another £500,000.
599 An injury benefit scheme for jockeys was set up in 1964, and so far has received over £250,000. As my participation in the sport is possibly confined, like that of many of your Lordships, to watching it on television on Saturday afternoons, I must confess that my heart is in my mouth for the jockeys until I hear the announcer say, "The horse and the jockey are both on their feet ". I think this amount of £250,000 is one that we should be very pleased is being spent for this purpose. Another Ell- million has been spent on improving technical services at racecourses. I am quite sure that your Lordships will agree that these are wise and proper uses of the levy. The benefits of increased prize money are felt throughout the industry. These and other expenditures help to keep racing alive, and bookmakers benefit as much as the public. In fact, I would say, trying to be as impartial as I can, that the bookmakers benefit more than the public. The other uses to which the money has been put not only contribute to the comfort of racegoers but help to maintain the integrity and vitality of racing.
The purpose of the 1961 Act was to create a procedure for raising a levy from bookmakers to be used for the benefit of horseracing, horse-breeding and veterinary science. The scheme was to be domestic to the industry, with Government intervention kept to a minimum. Noble Lords will probably know that as a result of a dispute between the Levy Board and the Bookmakers' Committee a breakdown in the arrangements for the collection of the levy is now threatened. The provisions of this Bill do not seek to change the basic structure of the 1961 Act, but seek to amend those parts of it which have proved unsatisfactory, so that in future the arrangements for assessment and collection will work smoothly. Your Lordships will recall that under the Betting and Gaming Act 1960 bookmakers had been given a new standing by the establishment of licensed betting offices. Street bookmaking on the run, with its attendant hazards and large expenses, was ended. Its place was taken by more than 15,000 statutory, respectable and less expensive betting offices. There was general agreement among bookmakers, as a sort of quid pro quo, to the principle of a levy which the Peppiatt Committee in 1960 advised should be intoduced. 600 The object of the 1961 Act, therefore, was to provide a scheme which would enable the industry to help itself.
The scheme for raising the levy works at present in this way—that is, prior to the Bill we are now considering. Proposals for the amount of the levy are prepared by the Bookmakers' Committee, which is a representative body of bookmakers. These proposals are submitted to the Horserace Betting Levy Board. This consists of a chairman and two other members of the Board appointed by the Secretary of State. The remaining members are representatives of the horseracing interests—the Jockey Club and the National Hunt Committee (I know they are now merged, but this will be taken care of during the passage of this together with the chairmen of the Bookmakers' Committee and of the Totalisator Board. If the Levy Board agree with the proposals of the Bookmakers' Committee as originally submitted or as revised as a result of observations by the Board, the scheme is promulgated by the Levy Board. If, however, agreement cannot be reached, the chairman and two other independent members may impose their own scheme. In so doing they are required to strike a balance between the needs of the horse-racing industry aid the ability of the bookmakers and the Totalisator Board to pay—the Tote being also, of course, required to contribute to the levy.
The 1961 Act requires that a scheme shall provide for bookmakers to be divided into various categories. On the promulgation of a scheme it is for the individual bookmaker himself to declare into which category he falls. We could hardly be fairer to the bookmaker than that. If a bookmaker does not make such a declaration it is for the Bookmakers' Committee to decide into which category he falls: additionally they have power to revise a bookmaker's declaration if either they or the Levy Board have any reason to doubt it. A bookmaker has the right of appeal to an independent appeals tribunal against his assessment, but if he is to succeed in his appeal he must produce his books to prove his case. The only sanctions against non-payment of the levy are for the Levy Board to proceed against the bookmaker for a civil debt or to object to the licensing justices against the renewal of the 601 bookmaker's permit. The power of the justices is discretionary.
The scheme has worked reasonably well over the past six years. It has, however, I regret to say, been the exception for a scheme to be agreed—indeed, apart from the first scheme agreement has been reached on only one other occasion. But it is only since the imposition of the seventh levy scheme—and more particularly the eighth, which followed shortly after—that the weakness of the present arrangements has become apparent. The seventh scheme—and I ask noble Lords to note this carefully—for the first time substituted turnover for profit as the main basis for assessment. This was done under the existing legislation, with the bookmakers themselves suggesting a scheme based on turnover. The one imposed by the chairman and two independent members, however, amended the Bookmakers' Committee's proposals by shifting the burden from the smaller bookmakers to the larger concerns—something which, in other affairs, we have often done in this House. Under the imposed scheme, the seventh scheme, it was hoped to raise £2.3 million—rather less than in the sixth levy period. At the same time the Levy Board also found that the Bookmakers' Committee's proposals for the eighth levy were unacceptable and announced that a levy for that period producing £3.8 million would have to be imposed. The dispute on the seventh scheme was mainly over the way in which a bookmaker who had both on and off course business was to be assessed. The Bookmakers' Committee, with reservations about the on-course bookmakers, have, I am told, now dealt with the bulk of the outstanding assessments for the seventh levy, but unfortunately a large proportion of the bookmakers' contribution is not paid up.
So much for the unhappy state of the seventh levy: but a far more critical situation has developed over the scheme for the eighth levy. Here the bookmakers challenged the legality of the imposed scheme on the grounds that it did not take into account the bookmakers' capacity to pay. They have not put this challenge to the test in the courts; but the Bookmakers' Committee have instead given effect to the challenge by taking unjust advantage of their powers under the existing law. They have said that if a 602 bookmaker failed to submit a declaration of his category and such cases were referred to the Committee to decide, they would either refuse to deal with them or would place all bookmakers in the exempt category. There is no way of reopening such an assessment. Their action thus virtually amounts to opting out of the scheme and thus sabotaging it.
My Lords, I know that you will agree that the Government cannot tolerate the will of Parliament being flouted in this way. As I explained earlier, failing agreement with the bookmakers the ultimate power to decide the amount of the levy was vested in 1961 in the chairman and the independent members of the Levy Board. But these independent members are nevertheless part of the Levy Board and as such are vitally concerned with the expenditure of the money raised by the levy. However impartial they may be, their position makes it difficult for them to rebut the criticism that they are insufficiently independent to exercise unbiased judgment. Accordingly, this Bill provides for the responsibility for determining a scheme in the event of disagreement between the Levy Board and the Bookmakers' Committee to be transferred to my right honourable friend the Home Secretary—whose decision can be questioned in Parliament. That is what Clause 1 of the Bill does.
In exercising this function the Home Secretary will be completely independent and his discretion will be unfettered. The clause allows, although it does not require, the Home Secretary to seek the advice of independent people. It was argued in another place that an essential safeguard for the bookmakers was being removed in that the Bill does not require the Home Secretary, in making his determination, to consider the bookmakers' capacity to pay. My Lords, I cannot accept that contention. The Home Secretary cannot exercise this function without balancing the capacity of the bookmakers to pay against the needs of the horseracing industry. But what does "capacity to pay" mean? The present impasse has been brought about because the bookmakers have relied on these words to challenge the Levy Board's arbitration. But the challenge has not taken a form which can be determined because the criterion of capacity to pay cannot be given an objective content. It 603 is essential that a measure of finality be given to the determination of the levy. The bookmakers' safeguard will in future be the Home Secretary's independence. We cannot leave the impression that that decision can be open to further challenge on a ground which is so imprecise that it makes any resolution impossible.
This power of determination will apply in the first instance to the eighth levy scheme already promulgated by the independent members of the Levy Board, and I can assure noble Lords that the Bookmakers' Committee will be given every opportunity to state their objections before the Home Secretary makes his decision. The Government are determined in the light of recent experience that the decision on the eighth levy scheme and on future schemes shall be implemented without obstruction. To this end, Clause 2 transfers the power of revising or imposing assessments from the Bookmakers' Committee to the independent members of the Levy Board. The bookmaker's individual right of appeal to an appeals tribunal against his assessment remains unaffected.
Clause 3 of the Bill seeks to strengthen the sanctions for non-payment of the levy by making it mandatory on the justices to refuse renewal of a bookmaker's permit if he has, since the Act, been in default of payment of his levy on any two occasions in a period of five years, provided also—and this is very important—that the Levy Board appear before them to make the objection. The object of this last provision is to ensure that cases of inadvertence or cases of hardship are not penalised but that the hard core of obdurate offenders is effectively dealt with. This is, I accept, a powerful sanction, since without a permit a bookmaker is powerless to carry on his business. However, if he purges his offence by making full restitution he can, with the approval of the Levy Board, apply for a new permit at the next opportunity.
My Lords, so far I have been dealing with the provisions of the Bill which affect the bookmakers: I will, if I may, now explain how they affect the Totalisator Board. The arrangements for determining the contribution to be made by the Totalisator Board are much the same as those for the bookmakers. If agreement cannot be reached between the Tote 604 Board and the Levy Board then it is for the three independent members to decide what the Board's contribution shall be. In coming to their decision they are required to have regard to the same criteria as are applied in determining the levy for bookmakers. I am glad to say that agreement has always been reached in the past between the two Boards but that is not to say it will always be so. Clause 4 accordingly provides that if a dispute should arise between the two Boards it shall he decided by the Home Secretary.
My Lords, the intentions of the 1961 Act have not been wholly fulfilled and the unco-operative attitude of the bookmakers has obliged us to produce this Bill to put matters right. It had to come forward as an emergency measure against a regrettable background of dispute and I hope that I have avoided exacerbating feelings which have been aroused. I wish to emphasise that while the Bill leaves the present law essentially as it is, it seeks to re-allocate responsibility for its administration in such a way as to remove the sources of friction. What is in dispute is not the principle but the amount of the levy. The eighth levy scheme has set the amount to be raised at £3,840,000. This amount, on a turnover from horse-racing which, in 1967–68, the latest full year for which figures are available, amounted to no less than some £830 million, represents substantially less than half of 1 per cent. of turnover; about 1d. in the pound. To put this in perspective I should also mention that the Totalisator Board, with a turnover during the same period of only £33 million, and with relatively higher expenses, contributed a levy of 2 per cent. to the sixth levy and 1½ per cent. to the seventh levy and they have never had a dispute with the Levy Board.
However that may be that it would be quite inappropriate for me to express any view on the proposed level of the eighth scheme. Indeed, the whole purpose of the Bill is to transfer to the Home Secretary the determination of the appropriate level of the levy in disputed schemes. Noble Lords may rest assured that in reaching a decision the Home Secretary will take into account the views and interests of all concerned and, moreover, that the decision ultimately reached will be impartial. I suggest that 605 what we propose in this Bill is just and fair and certainly not oppressive. The levy scheme could not now be effectively replaced; it must be implemented. I ask the House to ensure that it is implemented by giving this Bill a Second Reading. My Lords, I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Stonham.)
§ 3.43 p.m.
§ LORD DERWENT
My Lords, I am glad to see that the noble Lord, Lord Stonham is wearing his racing suit to-day: it is very appropriate. I am not going into all the details of the Bill because they have been explained in great detail, and very clearly, by the noble Lord. May I say straight away that I agree with the principles of the Bill and I completely approve of Clauses 2, 3, 4 and 5. May I also say first one word about the present Act? It was brought in, of course, by a Conservative Government and it has been, I think, in large measure a great success. I do not know how racing would have continued without it.
Although the Act was brought in by a Conservative Government it was, in the event, largely an agreed measure. I seem to remember that, by and large, the noble Lord, Lord Stonham, fully supported it, as did other noble Lords opposite. Even the bookmakers though they did not of course like being levied—nobody likes being levied—realised that they must pay a share of the expenses of the racing industry, and that if the racing industry was unable, because of economics, to continue the bookmakers would all go out of business.
As the noble Lord has said, these levy schemes worked pretty satisfactorily until the seventh scheme. I do not want to go into this unfortunate dispute, but in fact the Bookmakers' Committee more or less said that they were going to wreck the existing Act—in other words, that they were going to thwart the will of Parliament. I entirely agree with the noble Lord, Lord Stonham, that that clearly could not be allowed. So, my Lords, we have this Bill which in certain respects is pretty tough on the bookmakers. It ties them up pretty tight; it ties up quite a lot of other people pretty tight. But I think that is absolutely necessary.
606 May I go back to one thing which was said by the noble Lord. Lord Stonham? He explained (and I think this is important) that in the event of a disagreement over any particular levy scheme in any year between the Levy Board and the Bookmakers' Committee, under the present Act a decision could be imposed by three people who have come to be known as the "Three Wise Men". They are the three members of the Levy Board appointed by the Secretary of State partly because of their knowledge of racing but principally because they do not represent any section of the racing industry. 'They are not bookmakers, and they are not members of the Jockey Club—I think I am right about that. Anyhow, they are independent members so far as anyone in this world is independent. They can authorise a scheme when the Levy Board and the bookmakers fail to agree.
When the present Act was introduced and the Bill was going through the House, I do not think that anyone could have foretold that there was a possible loophole, but it is that loophole of which the bookmakers have now taken advantage. This Bill contains a clause which I think is quite wrong, Clause 1. Under this clause, when there is a lack of agreenient—I will not say a dispute—about a levy scheme between the Levy Board and the Bookmakers' Committee, the Secretary of State, for some extraordinary reason which has never been adequately explained by Her Majesty's Government in another place (and even to-day I do not think has been explained) has to take over the job of the "Three Wise Men".
The Secretary of State may well know nothing at all about racing. He may know even less about betting; and I dare bet that he will get little technical help in the way of advice from anybody in the Home Office. From what I saw of them I should be very surprised if Home Office civil servants ever have the time to go racing. I know that very few of them take the slightest interest in it, except academically as "back room boys" for the benefit of the Home Office. Under this Bill the Secretary of State —this man who probably knows nothing about racing and who has not sat in on any of the discussions between the bookmakers and the Levy Board, or any 607 other discussions which may be going on—can refer for his advice to other people. But, my Lords, to whom can he refer for advice on the arguments which have been put forward, if he wants to know what has been going on, except the "Three Wise Men"? So we are back to square one. He can later see the bookmakers, and even later see the rest of the Levy Board, but the only people who can tell him why they disagree, and what were the arguments, are the "Three Wise Men". Why put in the Secretary of State? My Lords, we have had no reason for this, but I put it down to the love of this present Government of interfering in matters which hardly concern them and about which they know almost nothing. It seems singularly stupid.
I have only one other matter to talk about in connection with Clause 1, and it has been mentioned by the noble Lord. Lord Stonham. As I said, the present Act was, in the event, largely an agreed measure, not only in Parliament but to a large extent by the interested parties outside. Under that Act, the "Three Wise Men", when they come to impose a scheme, are required by Statute to have regard to, among other things, the capacity of the bookmakers to pay. I may say that in another place the Government shifted their argument on this point four or five times, but the noble Lord, Lord Stonham, now says that the words "capacity to pay" mean nothing; that they are not enforceable, and that what in fact the present Act says is that the "Three Wise Men" shall "have regard to" this; they have not to prove capacity, but must "have regard to" it.
In Committee in another place, the Government were defeated and the words "capacity to pay" were inserted—I agree, by rather a snap vote—but they were taken out by the Government on Report stage, without any particular reason being given; so that the Bill comes to your Lordships' House without the reference to "capacity to pay". I have not the slightest doubt of the bookmakers' capacity to pay. May I explain why the bookmakers attach importance to having these words in, or other words to the same effect? They are afraid that when we get a Secretary of State who knows nothing about the subject, he will act as a politician, and the public generally 608 have a healthy distrust of Governments and politicians. They are not afraid about the present Home Secretary. He has given an undertaking for himself, which is all he can do, that he will take capacity to pay into account when he has to decide upon a scheme. And this applies not only to the present Home Secretary but to any other Home Secretary of the present Government.
The bookmakers, however, are naturally suspicious that some Government, or some Home Secretary of the future who may be against betting, will decide that there ought to be a Tote monopoly. They say that if there is to be a Tote monopoly one day the necessary legislation should be introduced. If these words are not in the Bill, the Home Secretary of the day could make a scheme, with a levy which it was impossible for the bookmakers to pay, and thereby get a Tote monopoly "by the back door". Whether those fears are justified or not, I cannot say; but I do say that the bookmakers regard these words as important. In the last few years, we have seen quite a bit of legislation "by the back door".
Government spokesmen have repeatedly said that the Home Secretary could be questioned in Parliament, but supposing he was asked why he had made a scheme with a levy which the bookmakers could not pay, all he would have to say in answer would be that there was nothing in the Act about taking into account capacity to pay. It may sound farfetched, but it is a real fear of the bookmakers. I believe that if this new Bill is to work smoothly, no one part of the industry should be unduly suspicious. We should have the co-operation of the whole industry.
When we come to Committee stage, I hope that your Lordships will consider putting Clause 1 into proper order. I am giving notice now that I shall put down Amendments about the Secretary of State and "capacity to pay". We have not had any proper reason for the insertion of the Secretary of State except that the Government want it. Nobody in the industry, so far as I can see, wants it. As regards "capacity to pay", or words to that effect, they may be useless words, as the noble Lord, Lord Stonham, says. But I believe that they can do no harm and will give confidence to the 609 bookmakers, and I think that they ought to go into the Bill. Apart from these two criticisms, I am sure that your Lordships ought to give the Bill a Second Reading, because the bulk of it is good and of importance.
§ 3.56 p.m.
§ LORD MANTON
My Lords, I know that your Lordships are always generous to a maiden speaker, but I think I have a special reason for claiming your Lordships' indulgence this afternoon. This is a first time that a member of my family has spoken in this House. Another place has become a little prickly lately about the outside interests of its Members. My reasons for coming here to-day to speak in this debate are that I am both interested and to some extent involved in the subject under discussion. I have some knowledge of racing and its problems as a member of the Jockey Club, although I am one of its newest members.
The Bill before your Lordships' House this afternoon has my strongest support. The present 1961 Act is badly in need of an overhaul. This new Bill seeks to impose a scheme under which turnover will be substituted for profit. That is the basis of assessment. The new Bill, as we have already heard, should raise £3.8 million a year instead of, in the current year, £2.3 million. The effect of this will be that the amount of levy paid by many smaller bookmakers will be reduced. This is a point that sometimes has been missed. The small bookmaker in the small back streets and the country villages will not pay as much as he has done under the current levy. But conversely it will increase very substantially the levy paid by the big bookmaking enterprises.
The larger bookmakers, as we have already heard, are threatening to defy the old Act by not putting in returns. I only hope that the Government will not tolerate such wrecking tactics. At present, there are three bookmaking firms who practically control the whole of the horse, racing betting in this country. These three firms the Bill will hit the hardest. In the past, their contributions to the levy have been to my mind totally unrealistic. The articulate and wellorganised opposition to this Bill is by these few large enterprises and is not representative of the feelings of the 610 majority of small bookmakers, many of whom, as I have said, will benefit under the Bill.
However, I should like to be satisfied that there are adequate safeguards and powers for not enforcing the levy where, despite a large turnover, there could be a genuine loss. I must emphasise the word "genuine". The Bill has the wholehearted approval of the racing authorities. It will go some way towards helping to maintain and improve the standard of racing in this country and the amenities of those who go on racecourses. I for one admire the skill of the noble Lord, Lord Wigg, who has persuaded the Government to find time for such a much-needed measure. I will not delay your Lordships or the progress of this Bill any longer, but in conclusion I should like to thank your Lordships for the indulgence that you have extended to me. I hope that I have not overtaxed your staying powers.
§ 4.0 p.m.
§ LORD WOLVERTON
My Lords, it gives me great pleasure to congratulate the noble Lord, Lord Manton, on his maiden speech, which I am sure the whole House has enjoyed. His great knowledge of racing will be much appreciated in this House, and I hope that we shall hear the noble Lord speak often in the future. I had the pleasure for many years of knowing his father, who was also a member of the Jockey Club.
In supporting this Bill, I wish to say how sorry I am that it has had to come before the House. I, like many other noble Lords, was a supporter of the 1961 measure, which was an agreed measure to clean up street corner betting and improve racing. All the bookmakers agreed to pay levy for the privilege of being allowed to set up licensed batting shops, and this, as my noble I Fiend Lord Derwent has said, has brought in the substantial sum over the seven years of £17 million. I do not know where the racing industry would have been to-day without that £17 million.
However, I am worried that it is necessary to bring the Minister and Parliament into this matter because the 1961 Act tried to let the industry settle their own affairs. But, as has been said, we cannot have the will of Parliament flouted. I think the bookmakers have been very unwise in the action they 611 have taken of flouting the will of Parliament and refusing to pay any levy. Therefore, we must do something about it. At the same time, as my noble friend Lord Derwent said, we have to be fair to all sections of the industry. It would be a sad day, in my view, if bookmakers departed from the racing scene. They are part of the British racing scene. The public like to have freedom of choice in their betting, and this is what we try to give them.
It is important to have some words in the Bill, and I am sorry that the Government decided to reverse the decision of their main Committee. The Amendment to have in the words "capacity to pay" was carried by only one vote in Standing Committee in the other place; but it was carried. The effect of the words "capacity to pay" has been one of the difficulties all the way through the negotiations, but, as my noble friend Lord Derwent said, we think that they give some protection to the bookmakers, and this is what they want.
I think it is regrettable to have to bring in the Minister and Parliament, but in the circumstances it is inevitable. It does not seem to be possible for the "Three Wise Men" to settle their affairs with the Bookmakers' Committee hence this Bill. But I feel that we should insert some words for the protection of the bookmakers—words that the Minister should take into account. Therefore I was glad when my noble friend Lord Derwent said that he would put forward an Amendment on the Committee stage, which I think is to be taken next week, to consider this important point. With those few words, I support the Pill regretfully, because I think it would have been much better if the Levy Board and the Bookmakers' Committee could have settled their dispute without having to come to the Minister and Parliament. However, in the circumstances, I see no other alternative, but I think some adequate safeguard should be put in the Bill.
§ 4.5 p.m.
§ LORD WILLOUGHBY DE BROKE
My Lords, I should like to add my humble congratulations to those of the noble Lord, Lord Wolverton, to an old friend of mine, the noble Lord, Lord Manton, on his maiden speech. I should like also to offer my sincere and warm 612 congratulations to the noble Lord, Lord Stonham, on the admirable exposé he gave us of the present situation of the Horseracing Betting Levy Act. It was masterly. I find myself, I am sorry to say, in disagreement with two noble Lords on this side of the House who feel that they would like to see reintroduced during the Committee stage of the Bill the Amendment which I believe was very nearly inserted in the Bill in another place.
I feel that, as other speakers have done. I should declare my interest. I have had the honour to do five terms of office as a Steward either of the Jockey Club or of the National Hunt Committee. That comes to a total of 16 years. I have also been five years Chairman of Tattersall's Committee, which deals with the disputes between the bookmakers and the betting public. So I have a little inside knowledge of the way bookmakers' minds work, and the mind of the public, too. I am also Chairman of the Racecourse Technical Services, the company that operates under the Levy Board and provides all the essential services at racecourses. I am Chairman of two racecourses, and have been an owner and breeder in a humble way for 45 years. I thought that I should explain that.
I should like to stress one point. In my opinion, there has been a great deal of misconception about this mysterious "capacity to pay" by the bookmakers in relation to the small amount that the eighth levy scheme is seeking to impose on them, which is only half the amount recommended by the Benson Committee on the Future of the Racing Industry, copies of whose Report no doubt a number of your Lordships have seen. That sum was fixed at £8 million, which is a little over double the contribution that the eighth levy is seeking to impose. In my view, the bookmakers' "capacity to pay" in relation to these small demands is virtually unlimited. When you look at the sporting papers and the financial papers you see nothing but advertisements every day by the leading bookmakers for more, bigger and better betting shops. Do not tell me that those people are working out of philanthropy, and that they are not going to make a great deal of money out of it. Moreover, one has only to look a little further to see the financial results announced by some of the leading bookmaking firms.
613 I intend to be quite brief, but I should like for a moment to tell your Lordships a little about this so-called "capacity to pay" and the misconception attached thereto. I must give your Lordships a few of the racing figures in relation to what happens over the water in France. In England we have four times the number of betting shops that exist in France, where the Paris Mutuel Urbain, which is their off-course totalisator organisation, provides what corresponds in England to our betting shops. They have about 4,000 in France against about 16,000 over here. Our betting turnover figures, which the noble Lord announced, are just about double what they are in France. Yet French racing receives approximately six times the revenue out of betting that we succeed in getting in this country; that is, something in the neighbourhood of £17 million to £18 million—it naturally varies every year—as against about £3 million in the past few years, both from the bookmakers and from the totalisator combined. So I do not think that anybody can say that the demands that the Levy Board are making at the present time on our betting industry are other than extremely reasonable.
Furthermore, this figure may endear itself to the Chancellor of the Exchequer. I believe that the latest figure in France, with their system of betting, with their smaller number of betting shops and half our turnover, is that the French Treasury get the equivalent of £60 million per annum out of betting, whereas I believe that our estimate is that our Chancellor of the Exchequer will receive about £50 million. So those figures rather speak for themselves. If anything, my Lords, I feel that possibly this Bill does not go far enough in view of the fact that the Benson Committee recommended this very conservative figure of £8 million. On the other hand, there is the good old principle that half a loaf is better than no bread. For that reason, I beg your Lordships to give this Bill a Second Reading and I would ask those of us who will be here next week to do their best to resist any Amendment to the Bill concerning this so-called capacity of the bookmakers to pay.
§ 4.12 p.m.
My Lords, I would join with other noble Lords in congratulating the noble Lord, Lord Manton, on 614 what was in fact a double maiden; it was not only his first speech in your Lordships' House but, although he is the third Baron, the first speech made by any holder of his Lordships' title. I thank the noble Lord for his maiden effort and hope that he will speak again, not only on racing and sporting matters but on other matters, and with the great advantage that his speech had, which my own speeches never have, that he was; brief and to the point. I am old enough to remember as a boy what the name of the Manton Stables meant in racing. I was very glad to hear the noble Lord say that he fully supported the Bill, and in particular the point he made (which I mentioned but did not sufficiently emphasise) that it will have the effect of reducing the amount of the levy paid by the small bookmaker.
I do not want to say too much on that score and must be extremely unbiased in the matter, but it seemed to me extraordinary that some of the strictures made by the noble Lord, Lord Derwent, about the capacity to pay can be made when we look at the scheme itself, which provides, except for bookmakers exempted under Part I, that a bookmaker with a turnover of up to £15,000— that is the lowest— would pay only £50 a year. That is just about £1 a week on a turnover of up to £15,000. At the other end of the scale, with a turnover of over £1 million, bookmakers; will be paying £5,250.
§ LORD DERWENT
My Lords, I do not want to interrupt but I evidently did not make myself clear. I said that I was not in any doubt about the capacity to pay. I was talking about the form of words, which will give comfort to the bookmakers. I am quite certain they can pay.
§ Loin) STONHAM
My Lords, I was very careful to note down the noble Lord's wounding words and I shall come to them in a moment. But first I was dealing with his noble friend Lord Manton in welcoming this point which has been made, because it is quite possible that other noble Lords have not studied these Schedules quite so assiduously as has the noble Lord, Lord Derwent. I always find that whenever I make a point and it goes home I am bound to be interrupted. That is the certain way of being sure that one has made one's point. There are of 615 course other bookmakers who, under Part III of the Scheme, will pay nothing. So when we are considering this matter these points should be borne in mind.
The noble Lord, Lord Manton, also said that the articulate opposition to the Bill is from the large bookmakers. That is perfectly true. I am glad that he made that point so that I do not have to make it. One thing he asked me for was an assurance that the levy will not be charged where there is a genuine loss. This is an assurance that I cannot give. The levy, when it has been agreed, when it has been revised or confirmed by the Secretary of State, will of course be in accordance with the Schedules devised. My mind boggles at the thought of deciding when a bookmaker has made a genuine loss—and the noble Lord emphasised the word "genuine". So I regret to say that that particular point is not one that I would regard as practicable.
The noble Lord, Lord Derwent, congratulated me on wearing my racing suit. I thought that with a Bill of this kind there should be at least one hacking jacket here so that we could get into the right mood. He asked why the Secretary of State could adequately replace the "Three Wise Men"; and incautiously said that my right honourable friend knows nothing about it and quite probably his advisers at the Home Office know nothing about it either—they do not have the time to go racing. It is astonishing that a former Home Officer Minister should say such things.
§ LORD STONHAM
Well, things have changed since the noble Lord's time; that is all I can say. On so many subjects it has been my lot to find that our divisions and departments have quite remarkable knowledge in matters of this kind, and if they do not have the knowledge they always know where to go to get it. So I regret the noble Lord's remarks, particularly his bringing in stupid political remarks that we get in other places about putting it down to the love of the present Government to interfere in matters of which they know nothing. This is not a Party Bill; this is a common-sense Bill for the benefit of racing. So for the rest of the stages of the Bill, particularly the Committee stage, let us exclude remarks of that kind.
616 We of course have the highest possible regard for the capacities of the Chairman and the two appointed members of the Levy Board—the "Three Wise Men" as the noble Lord calls them. But the objection (if I may use the word "objection") to the "Three Wise Men" is that their part in determining how the levy should be spent gives them so close an association with the needs of horse-racing that they cannot be seen to be impartial. They become, as it were, judges in their own cause in deciding any dispute between the bookmakers and the Levy Board. We therefore felt that it was right for the Secretary of State to decide these matters, and he will indeed have the opportunity, if he feels it necessary, to seek other advice. Suppose we had set up, in place of the Secretary of State, another independent tribunal. Where would you find the people with the necessary knowledge and expertise who did not have some kind of interest in this particular industry in one capacity or another? This solution is quite a usual and quite a right one in other fields, and I am certain that it will work very well.
The noble Lord, Lord Derwent, said, quite wrongly, that I had said that capacity to pay did not matter. If he looks at my speech to-morrow in Hansard he will find that I did not say that. What I did say, and what I mean, is that the Secretary of State would balance capacity to pay against the needs of the industry. I do not want to say any more about capacity to pay, because a great deal was said by the noble Lord, Lord Willoughby de Broke, and it was cheered on this side of the House. The noble Lord, Lord Derwent, also said that bookmakers are suspicious that we intend to create a Tote monopoly.
§ LORD DERWENT
My Lords, I did not say that; I said "if in the future some Government wished to create a Tote monopoly".
§ LORD STONHAM
My Lords, I am grateful for that correction. Of course I cannot commit a future Government, but it can be said that there would have to be legislation and that legislation would be decided by Parliament, and I cannot imagine any Government of any political colour perpetrating an injustice. It may well be that a change of policy would be possible under some future Government—I do not know—but I can say 617 that this Government have no such thoughts in mind.
As to the Amendments which the noble Lord promised to put down, we shall consider them with great interest. The only thing I hope is that in dealing with them I shall not be led into disclosing a lot of figures. When he speaks about "capacity to pay", the noble Lord seems to have forgotten that the seventh levy was based on turnover, and that was suggested by the bookmakers themselves. The only real problem has arisen because the Levy Board have decided that the eighth levy, also based on turnover like the seventh levy, should be £3.8 million, whereas the other was £2.3 million. That is really what all the trouble was about. I am grateful for the intervention by the noble Lord, Lord Wolverton, and I agree with him that bookmakers are unwise to flout the will of Parliament in this way. But we certainly bear no malice. I am also grateful to the noble Lord for pointing out that he did not think it possible for the so-called "Three Wise Men" to come to agreement with the Levy Board.
I think the last time I spoke in the same debate as the noble Lord, Lord Willoughby de Broke, I was sitting on those Benches and he was sitting here. That was about eight years ago. I also remember that on that occasion we found ourselves in full agreement, as we do now. I was glad that he said there was a great deal of misconception about the capacity of bookmakers to pay, and in his view the demands now being made are extremely reasonable. My Lords, I am the only Member of your Lordships' House who has spoken in this debate who is not, never has been and perhaps never will be, the owner of racehorses, but I think it is a very great sport. I believe this Bill is wise, it will do racing a considerable service, and I hope that now we shall give it a unanimous Second Reading.
§ On Question, Bill read 23, and committed to a Committee of the Whole House.