HL Deb 05 June 1981 vol 420 cc1466-82

11.44 a.m.

Lord Crawshaw

My Lords, I beg to move that this Bill be read a Second time. Last Wednesday I was one of 500,000 people who were fortunate enough to be on Epsom Downs to see a superb English racehorse win the most famous flat race in the world. The sight of the son of one of this country's best sires giving a display in front of probably the largest gathering of people on earth was reassuring in these otherwise doubtful days. I am concerned that this scene and many others like it up and down the country—although smaller in many cases—should be repeated for tens and hundreds of years all over the land. I believe that this small Bill before us today will help to enhance all aspects of the sport and industry of horseracing and I strongly commend it to your Lordships.

This Bill establishes no new fundamental principles but merely brings up to date previous legislation from the early 1960s and, I hope, closes one or two loopholes. I shall refer shortly to previous legislation but in passing I should like to say how pleased I am that the noble Lord, Lord Renton, who was one of those who had the foresight to help in the passage of the Acts in the early 1960s, is here this morning. I know that he will be a great help in our deliberations. I am sorry to note that the noble Lord, Lord Wigg, is not able to be present because he is not at all well; any debate about horseracing in either House will be the poorer without him. I am delighted to welcome the noble Lord, Lord Mancroft, who was the chairman of the Tote Board; the noble Lord, Lord Newall, who was a founder member of the Racing Committee of the two Houses; and the Leader of the Opposition, the noble Lord, Lord Peart, whose views on racing I am very familiar with. I know that the noble Lord will have quite a lot to say as he obviously had a great deal of experience in the subject when he was Minister of Agriculture.

Also present this morning is the noble Lord, Lord Manton, who served on the Betting Levy Board for, I believe, six years. He will be able to throw quite a lot of light on the workings of the Levy Board. As I understand it, the noble Lord is to be the next senior steward of the Jockey Club, so he can speak for the racing industry in a very complete way. Last but not least, my noble friend Lord Belstead, is speaking for the Government. Knowing, as I do, something about his background, I feel that up to now he may have been more familiar with sea horses than with racehorses and with Wimbledon than Epsom—but as the noble Lord is involved in racing today I believe there is some hope of salvation for him in the end.

Because of the importance of the subject and the potential wealth of experience in your Lordships' House it would have been most agreeable to have had a more comprehensive Bill designed to cover more aspects of racing. Indeed, a year ago I was hoping to introduce a Bill to this House incorporating the principles of the current Bill, which I hoped would attract a full-scale debate and be supported by the Government in the other place. Unfortunately, time ran out and there was no prospect of such a Bill going through the other place at that time. The racing industry has therefore been awaiting a Bill along the lines of the present Bill for at least 18 months and it was fortuitous that my honourable friend the Member for Devizes was successful earlier this year in a Private Members' Ballot and introduced this Bill, which, with all-party support, he successfully piloted through the other place—including two days in Committee. In fact, the whole of Clause 3 was added in Committee as an amendment at the request of bookmaking interests. Therefore the Bill has been subjected to a good deal of scrutiny in the other place and has already been well considered.

Because of the background to and origin of this Bill, in some ways I regret having to ask your Lordships to consider and, I hope, to support it as quickly as possible and to content myself at this stage with pointing out two or three of its main advantages to racing. It would be most unfortunate if time ran out on us once again. In short, racing could lose up to £1 million a year in legal avoidance—which I shall come to again in a moment. In the year ending March 31st, the Levy Board paid an incentive sum of £730,000 to book-makers as interest on advance payments. This sort of sum could he lost if they have to pay this over again, so that it is important that we deal with this Bill as expeditiously as possible,

My Lords, like some of us, the Levy Board has a serious cash flow problem. Under the current law, the formal assessment of a bookmaker's levy liability can be made only when his full turnover is known. Thus, for the current period, April 1981 to March 1982, his turnover will not be known until after March 1982. An assessment will then be made, and dues paid sometime after that. That is a long time after any business was done in, for instance, April 1981. One of the happy features following the original legislation has been the good relationship between the Levy Board under the successive chairmanship, of the noble Lord, Lord Wigg, the noble Lord, Lord Harding, and the noble Lord, Lord Plummer, who is soon to join us in this House. The relationship between them and the bookmakers is such that the Home Secretary has been called in as a referee on only a maximum of three occasions. The bookmakers are realistic enough to know that the upkeep of racecourses and the training and breeding horses is a very expensive business, and in most, if not all, cases abroad this finance comes from a Tote monopoly

It would be very much a part of the spirit and the bargain of the legislation of the early 1960s that when off-course betting shops were legalised, the bookmakers would try to make the levy scheme (which is based now on a percentage of turnover) work so that the very industry which introduces so much "fluttering" should survive. It was along these lines of cooperation that recently about one-third of the bookmakers (who were responsible for 65 per cent. of the board's actual income) have voluntarily paid their dues in advance.

This Bill is intended to make this standard practice so that those who willingly co-operate are not penalised when compared with those who do not. The assessment will still be made on the basis of bookmakers' known past trading. Payments on account are unlikely to amount to the total yield and there will be an instalment system, rather like PAYE, and in most cases a balancing payment to make after the end of the levy year. The details of how this procedure would work and the level of payments on account required are matters to be decided between the Levy Board and the Bookmakers' Committee at their annual negotiations. The amounts which individual bookmakers will be required to pay, and when they are required to pay them, will be determined by the three Government-appointed members of the Levy Board who may consult with the Bookmakers' Committee and others. The result of their determination will be issued to the bookmaker and in due course this will be replaced by the final levy assessment which becomes the bookmaker's legal liability.

My Lords, Clause 2 of the Bill deals with the procedure for appeals against determinations to be held by the appeals tribunal. This can be done only where a bookmaker considers a determination not to be in accordance with the scheme; that is, that the board have their facts wrong as to his past trading. This must be done within 28 days. Clause 3 was added in another place as a further safeguard for a bookmaker who can apply to the three Government-appointed members of the board if he feels that owing to a deterioration in his circumstances, it would he unjust for him to make a payment on account in accordance with the determination served on him. More than one such application can be made.

Earlier in my speech, I mentioned that if this Bill should fail, racing, could lose a large sum of money in legal avoidance—and I must say a little more about that. The more unscrupulous members of the fraternity found that under the system of assessments on past trading, it has been possible, and still is possible, to wind up one company, say, towards the end of March, and transfer the business to another company which would be liable for levy payments in respect of only a short period of trading, perhaps only a few days; and a certain number of bookmakers rather unscrupulously took advantage of this. But under this Bill the practice will be stopped by basing the final total of liability on the current year. All this is rather complicated but I think it will be clearer when certain other noble Lords have spoken.

Other provisions in the Bill include arrangements for new bookmakers who have nothing on which to base their past trading. There is an undertaking also that a bookmaker will not have his assessment increased following an application to the three Government-appointed members of the Levy Board; and there are one or two other matters. But I feel that on Second Reading I need not take the matter further but simply to bring this Bill to your Lordships. Speaking entirely as a layman, as somebody passionately interested in racing in this country and in its welfare, I want to see the industry prosper. I ask your Lordships for your support for this Bill and I beg to move that it be react a second time.

Moved, That the Bill he now read 2a(Lord Crawshaw.)

11.59 a.m.

Lord Peart

My Lords, may I first congratulate the noble Lord on the way he has introduced this Bill, with clarity and also with feeling. I was moved by what he said about the Derby and how it struck him. I believe that we have some of the finest bloodstock in the world and that a Bill of this kind is very helpful. A lot of people not only watch racing but indulge in other aspects of the game in the sense of having an odd bet off course. I do the same myself; I like to bet on a horse, but I like to be there at the race itself. I still have a love of horseracing, even though I was nearly tempted away from racing by watching a lot of hound trails in Willie Whitelaw's division and in my own. That is another fine sport but I will not elaborate on that.

I should like to endorse what the noble Lord said about the noble Lord, Lord Wigg. I am sorry that he is not here. He has not been well. He has a passionate interest in the well-being of the racing industry in all its aspects. I hope that he will soon be better again and be able to give us some of his advice. The parentage of this Bill is to be found in paragraph 19 of the report of the Peppiatt Committee in 1960 which said that there was a "unanimous opinion on all sides of the racing industry (including the bookmakers) that a levy is required". It was stressed that a levy was required to improve the horseracing industry but that a subsidy was unnecessary. The report was debated in the House of Commons on 23rd May 1960, and found general acceptance. Subsequently, the then Home Secretary (now Lord Butler) introduced the Betting Levy Bill, which was given a Second Reading on 5th December 1960, and was considered by a Committee of the Whole House on 14th December 1960.

These facts remind me that I took part in the Committee stage, as did the noble Lord, Lord Renton (then Mr. David Renton), who was the spokesman for the Home Office, and of course my noble friend Lord Wigg joined in. He was then a member of the Race-course Betting Control Board and had been concerned in the discussions which led to the setting up of the committee, and also in discussions as to how the Levy Bill could be implemented.

During the Committee stage, doubts were expressed about the composition of the Levy Board. No doubt the Minister will reply—in detail if necessary—to matters that I want to raise. I was far from happy for I thought, as did many of my colleagues, that interests like the veterinary services ought to have had a say as to how the levy should be spent. I took that line. Looking back, I think it was the wrong approach. After all, we are anxious to improve the industry; and, inevitably, if an industry is improved the veterinary profession will be brought in indirectly and in the normal way. So, perhaps I was wrong then. The then Home Office Minister said that the Government had proceeded on the assumption—and, indeed, on the understanding—that the Jockey Club members of the Levy Board would not only represent the Jockey Club point of view but had the additional responsibility of representing the various interests concerned with the spending of the levy.

In the event, although the Jockey Club gave an undertaking which led to its membership being increased, that undertaking was ignored until November 1967 when my noble friend Lord Wigg became chairman of the Levy Board and drew attention to the Jockey Club's failure. I do not want to get into too much argument about that. There have been faults on both sides in this terrific argument over a long period of time. The main thing is what are we going to do about the best for racing?

The result has been that, particularly in recent years, the Levy Board has uncritically accepted Jockey Club policy—I know some noble Lords will disagree with that—and levy expenditure has been channelled in two main directions. First, towards ever-increasing prize money; and, second, towards interest-free loans, There is, of course, a strong case for part of the levy being directed to prize money, but the Levy Board and the Jockey Club have committed themselves to a prize money policy which, in 1981–82 amounted to over £10 million, and there is to be an increase of 13 per cent. in 1982.

Prize money goes in the main to rich owners of a small number of good horses. The prize money policy was examined by the Royal Commission on Gambling and their comments are to be found in paragraph 9.95 et seq. of the first volume of the Royal Commission's Report. In paragraph 9.100 the Commission said In our opinion the case for more prize money has been put far too high. In paragraph 9.108 the Commission drew attention to the fact that the levy, is mainly drawn from the lowest paid members of the community. The owners who would principally benefit from an increase in prize money are amongst the wealthiest. In the same paragraph the Commission stated, the case for a substantial increase (for prize money) would have to be much more cogent than the arguments which have been submitted to us. The policy of interest-free loans is extremely expensive and has benefited racecourses owned by the Jockey Club and the privately-owned Goodwood course.

The levy on horseracing is based on yearly turnover assessments which cannot he made until the end of the year's trading. Until the 31st March, 1979, assessments were based on the previous year's turnover. This method opened the door to avoidance, for only those trading in the levy year could be assessed; so when assessments were based on the previous year' turnover it was possible to wind up a company a few days before the end of the levy year and transfer the business transacted to another company, which would be liable for levy for those few days. This avoidance of the levy amounted to a very considerable sum. Moreover, it was unfair to bookmakers who did not seek to "dodge the column".

The Bookmakers' Committee—a statutory body appointed by the Secretary of State in accordance with the provisions of the Betting, Gaming and Lotteries Act 1963—agreed with the Levy Board in 1978 that levy should be assessed on current year turnover from 1st April, 1979. The levy is of course payable in accordance with the provisions of the Betting, Gaining and Lotteries Act 1963; but there is no legal requirement to pay the levy until the assessments have been made. So, as assessments could not be made until after the end of the levy period when the business was known, bookmakers were asked to pay an estimated levy contribution voluntarily in advance. About one-third of the bookmakers paid up, and when the levy year ended on 31st March, 1980, about £9.2 million of the total levy of about £15 million had been paid in advance in this way. But this voluntary scheme had major shortcomings. The main one was that it was unfair that two-thirds of bookmakers failed to co-operate and did not pay. It is for this reason that bookmakers' organisations support the Bill, but a big question mark remains as to the real issue underlying the Bill. The consequences of the Levy Board/Jockey Club policies have resulted in cash-flow shortage brought about because of over-spending on prize money and interest-free loans. That is why the Bill is necessary.

The report of the Royal Commission on Gambling points out in paragraph 6.8: The incidence of illegal betting is in our opinion quite simply a function of the combined rates of duty and levy on betting and the combined rates of levy and taxation have become dangerously close to the limit that can be imposed. Again, in paragraph 6.59: The present rate of deduction is uncomfortably high and any increase carries the risk of driving more off-course betting underground. Thus the levy has reached its limit.

The Bill has been favourably received and all those who are interested in the well-being of horseracing wish to see it become law. But there is a fundamental objection to the fact that the difficulties of the Levy Board come about because of the policies of the Board and the Jockey Club, and the voices of those who are vitally concerned with how the levy is collected and how it is spent remain unheard. The Bill as at present drafted places on the independent members of the Levy Board the duty of considering objections. The Bookmakers' Committee may be consulted if the independent members choose. Obviously, those who are likely to be affected by the Bill want objections to be dealt with by those who have a knowledge and understanding of bookmaking.

The only people who do understand the complicated nature of bookmaking are the members of the Bookmakers' Committee. And it would be a major step forward if the promoter of the Bill would agree to accept an amendment which would increase the membership of the Horserace Betting Levy Board by adding a second member from the Bookmakers' Committee.

At the present time, the chairman of the Bookmakers' Committee is an ex officio member of the Levy Board. At the same time, it might be useful if the chairman of the Horserace Advisory Council was also given a place on the Levy Board in his own right. At the moment he has a place on the Levy Board as one of the Jockey Club's three members. My suggestion would therefore involve an amendment increasing the membership of the Levy Board by two, one being drawn from the Bookmakers' Committee and the second being the chairman of the Horserace Advisory Council. I suggest also that Clause 1(5) of the Bill should be amended so that consideration of objections would rest upon the independent members of the Levy Board and two members drawn from the Bookmakers' Committee. If this were done, the Levy Board itself would be strengthened because the voices of those who are involved in the day-to-day business of racing would be heard, and this would be an enormous advantage to the Levy Board when considering the complex problems which face the industry at this time.

When the Bill was considered on Third Reading in another place, the promoter, Mr. Charles Morrison, commended the Bill as being of considerable advantage to the racing industry and to those who enjoy the sport. I endorse that view. I also found myself in complete agreement with the speech of the Minister of State at the Home Office when he placed great emphasis on the fact that the Betting Levy legislation from 1960 down to the present day was based on agreement and that the levy policy will not work properly, and will certainly not work to the best advantage, unless agreement is reached. I believe all noble Lords will accept this.

I understand that the Bookmakers' Committee has written to the Home Secretary, urging that the Levy Board membership drawn from the Bookmakers' Committee should be strengthened by increasing bookmakers' membership on the Levy Board. I understand, too, that the Transport and General Workers' Union, which played a prominent part in launching the racing industry's benefit scheme, has also written to the Home Secretary, urging that there should be wider representation of bookmakers on the Levy Board.

I am sure that, if the suggestions that I have made are accepted by the promoter of the Bill and by the Government, the Bill will have a speedy passage to the statute book, and we shall do all we can to facilitate that happening.

12.12 p.m.

Lord Mancroft

My Lords, I should like to join with the noble Lord, Lord Peart, in congratulating the mover of this Motion to receive this Bill very warmly, for the clear and concise way he has put it before your Lordships' House. I think that was the only point on which I did agree with the noble Lord, Lord Peart, during the whole of his speech, but we will come to that later.

To the outsider, of course, this may appear as a rather small matter—as a problem of the Levy Board's cash flow and the correction of what I suspect was probably a legislative error when the Bill was brought forward. But to those of us here who are interested in this great sport it is of much greater importance. I think it will help the Levy Board; anything that helps the Levy Board helps racing, and that I thoroughly support.

I strongly agree with the noble Lord who says that the Levy Board has done a good job of work—particularly of course during the four years when I was a member of it! I held that office as ex officiochairman of the Tote Board and I was happy to serve during the whole of that time with the noble Lord, Lord Manton, who sits next to me and is later to speak in this debate. Unfortunately, I used to note that whenever I said something sensible, which was rare, the names "Mancroft" and "Manton" being rather similar, my wise remarks were attributed to the noble Lord, Lord Manton, whereas whenever I said anything silly, which was much more frequent, they were rightly attributed to me. I hope that accident will not occur today.

I wished, and still wish, that the work of the Levy Board—and it is complicated, as the noble Lord, Lord Crawshaw, has made perfectly clear—was better known as regards what it is and what it is trying to do. The noble Lord, Lord Peart, emphasised some of the difficulties. They are primarily, as this Bill shows, those of reconciling a large number of conflicting interests. Her Majesty's Government are concerned, with three representatives now on the Levy Board; then there are the Jockey Club, the jockeys, the vets, the clerks of the course, the owners, trainers, the lads, the bookies—most important—and the Tote, too. Please let it not be forgotten that the Tote makes an increasingly large subscription to the levy itself. Most of all, there is the punter. We frequently talk about "public money" being involved in racing. I suppose semantically that is correct, but I regard it always as punters' money, and I think it is as well to remember that.

The Levy Board also has the difficulties of history, geography and local politics (which are very strong), property speculation (which is stronger than most people realise) and the British weather. When people say "Why do we have only 15 days' racing on such-and-such a course: look what they have at Hialeah or elsewhere", they forget that English grass will only stand a certain number of days' racing whereas tan and sand will stand a great deal more. I had these difficulties brought home to me very markedly when, as chairman of the Tote, I went to many courses abroad when we thinking of mechanising the Tote and putting in a computer. Questions of this kind are raised, which are fundamental to the basis of the noble Lord's Bill. There are three major racecourses almost within bicycling distance of the Eiffel Tower. London has no racecourse—you cannot call Kempton or Sandown really London courses—and several other of our big cities such as Birmingham, Manchester, Glasgow, have no racecourses; Liverpool, just; Edinburgh, yes; and this is largely clue to property speculation. That is why I mentioned the property speculator earlier. In Wales, Cardiff has no course and there are no others unless you count Bangor-on-Dee and Chepstow, which is hardly Wales, largely I think because of the Nonconformist conscience.

The other thing which foreigners say about us which directly affects the Levy Board is that they cannot understand why we allow the off-course bookie to have such an influential power on the financial control of racing in this country. This is no occasion to talk about the Tote monopoly, and obviously I am prejudiced to a degree. I exercised that view very strongly in the Levy Board both under the chairmanship of the noble Lord, Lord Wigg, whose absence I regret, as will others of your Lordships, and that of Sir Desmond Plummer who we are shortly to welcome here as a Member. So my views on that are well known and are prejudiced.

I see that the noble Lord, Lord Newall, is to speak later in the debate. He very kindly some short while ago helped through your Lordships' House another small Bill concerning greyhounds. I must declare an interest. I am now chairman of the British Greyhound Racing Board. We went before the Royal Commission, the Rothschild Committee, and tried to get a levy on the same basis as the levy we are debating today, and we were turned down in rather a cavalier way. We got a little butter with our bread; one very small reason for rejoicing was the fact that we were allowed to increase the amount of racing on a few days. As I say, the noble Lord, Lord Newall, very kindly produced this as a Bill in your Lordships' House.

This brings me to my last point. This Bill today will have occupied, if I have counted correctly, nearly 100 columns of Hansard. If the noble Lord, Lord Peart, were to have his way and produce as many irrelevancies as he has mentioned today, it would be 1,000 columns of Hansard. I wonder whether small Bills like this Bill of the noble Lord, Lord Crawshaw (and I hope that I am not in any way being derogatory to his spendid speech), or the Bill which the noble Lord, Lord Newall, was kind enough to produce for me, are really suitably drafted for occupying time in your Lordships' House when our Order Paper is so crowded. Is it really beyond the wit of man, and of woman of course, to find some other way in which these technical and very important matters might be dealt with parliamentarily without needing to occupy so much parliamentary time? In case I should defeat my own case by occupying even more parliamentary time, I again would support very strongly and wish well this Bill which the noble Lord has introduced.

12.20 p.m.

Lord Renton

My Lords, I, too, should like to support this Bill which has been moved by my noble friend Lord Crawshaw and to congratulate him, as others have done. The limited but necessary purpose of the Bill—namely, to improve the cash flow of the Levy Board, so that they can give more help to racing—has become, as has already been made clear, a really essential purpose for the benefit of our racing industry.

When, in 1960, as was mentioned, I had the responsibility of helping to formulate the details of the original scheme and to pilot the original Horserace Betting Levy Act when my noble friend Lord Butler was Home Secretary, I had to carry out negotiations with interested parties so that the scheme which we asked Parliament to accept would be one which, in its essentials, was agreed by all concerned, but especially by the bookmakers, because they were the people who were going to have to provide the money.

There were two men at that time to whom, above all others, we were extremely grateful for the help that they gave. One was Colonel Scott, the doyen of the bookmakers' profession. He was an old Etonian. I do not say he was the only old Etonian who has ever been a distinguished bookmaker, but he had tremendous authority and kindly persuasion and that helped a great deal. The other one was the noble Lord, Lord Wigg, then Member of Parliament for Dudley, as the noble Lord, Lord Peart, has mentioned. He knew more about racing than anyone in the Home Office. Indeed, the only man in the Home Office who knew anything at all about racing was not available to give me advice, because he was in the Civil Defence Department.

The noble Lord, Lord Wigg, showed great courage at that time. He voted with the Government throughout the proceedings, and never voted with the Opposition of which he was a member. I was especially grateful to him when he became chairman of the Levy Board, because the board then gave some help for the improvement of facilities at one of our smaller racecourses—namely, Huntingdon—which was in my constituency, and it has had most beneficial results there. Indeed, it is a great pity that he is not well enough to be with us today.

In 1960, our main concern was to ensure that the Levy Board was composed in a way which gave confidence to all concerned. So we were thankful that the scheme which we then put forward was acceptable—the chairman and two other independent and completely impartial members appointed by the Home Secretary, then two members—now three members—of the Jockey Club, the chairman of the Tote Board and the chairman of the Bookmakers' Committee. That agreed arrangement, slightly modified, has, I think, stood the test of time pretty well. After all, 20 years is a pretty fair span for what was regarded as a brave experiment at the time, and, as a result, a tremendous amount of change has taken place—change for the better—in British racing during that time.

But as we have this Bill before us, I think it was right—if I may say so with deep respect to my noble friend Lord Mancroft, who knows so much more about this than I do—for the noble Lord, Lord Peart, to make the points that he did, whether we agreed with them or not. I did agree with some of the points that he made. Of course, we have to bear in mind, however, that in another place this was a Private Member's Bill, as it is in this place, and if we are to make any substantial changes, especially if they are controversial, we may jeopardise the passage of the Bill. It might not reach the statute book and that would be a bad thing for racing.

However, having said that, I think that the noble Lord, Lord Peart, was right to ask, as he did, if I may put it rhetorically: Are the bookies, who are being asked to improve the cash flow by making advance payments—that is quite a departure in itself—adequately represented on this board of eight people, by simply having the chairman of the Bookmakers' Committee, which is a statutory committee and has a part to play in this, as their only representative among the members of the Board? I do not know the answer to this, but I think it is a point of sufficient importance to racing for it to be considered between now and Report stage. May I suggest to my noble friend Lord Crawshaw that, perhaps, he and the noble Lord, Lord Peart, might get together with my noble friend Lord Belstead, in order to see whether, without arousing controversy, without jeopardising the future of the Bill, something might be done on the lines of what the noble Lord, Lord Peart, has suggested. After all, it is only two more members; one further member representing the racing industry and one further member representing the bookmakers. It is not a very bold departure, I should have thought, and it may have a bearing on a matter which I must confess has increasingly in recent years caused me some real anxiety, and it caused anxiety to the Royal Commission on Gambling, as the noble Lord, Lord Peart, pointed out.

If the combined rates of betting levy and betting tax are too high, it will cause a resumption of illegal betting, with the corruption, and worse, which could follow and with the disadvantage to racing that would then also follow. Therefore, if this question is relevant—I am not saying that it is so; I am putting it merely hypothetically for the purpose of consideration—to the representation on the board, that is a further reason for considering that representation.

It would be a tragedy, surely, if all the good that we not only tried to do, but succeeded in doing, with the agreement of all political parties and all interests concerned 20 years ago, by rationalising our betting laws and getting some money for racing, were to be undone merely because of a failure to make a relatively small adjustment in the representation on the Levy Board, then we should be missing a great opportunity and it would be a tragedy. That is all that I wish to say and I think that this is a most important and valuable occasion in your Lordships' House.

12.28 p.m.

Lord Newall

My Lords, I have no intention of making a lengthy speech. I put my name down merely so that I could support my noble friend Lord Crawshaw, who so ably moved this Bill. In doing so, I should also like to thank my noble friend Lord Mancroft for his kind remarks on the Bill on greyhound racing, which of course has nothing to do with this one.

This Bill puts right an anomoly. It ensures that there will be a cash flow for the Levy Board. When it has been passed, all the bookmakers will assist racing on a common basis. Legal levy avoidance will be removed and that, of course, is a very beneficial factor. I am extremely glad to see that Clause 3 has been added, which will give safeguards to the bookmakers who have genuine difficulties—because they may well have these difficulties. I have no hesitation at all in recommending this Bill to all noble Lords as a real improvement to the racing industry—an industry which I am sure we all know provides a great deal of foreign cash to this country.

12.29 p.m.

Lord Manton

My Lords, I am very happy to support the Bill which the noble Lord, Lord Crawshaw, has so ably explained to us this morning. I myself sat as a Jockey Club representative on the Levy Board for about six years, before becoming a steward of the Jockey Club, and I should like to assure noble Lords how important this legislation is to the whole racing industry. I should add that it has the full support both of the Jockey Club and of the racing industry, as represented by the Horserace Advisory Council.

This brings me to one of the points which was made by the noble Lord, Lord Peart. Perhaps the noble Lord, Lord Renton, is not aware that one of the three Jockey Club seats on the Levy Board has now been handed over to the chairman of the Horserace Advisory Council. The Horserace Advisory Council represents practically every facet of the racing industry except, which is perhaps strange, the bookmakers. They were invited to have a seat on the Horserace Advisory Council but they preferred instead to sit in the wings as observers. This might seem strange, but it brings me to another point which perhaps we should be aware of: that the bookmakers are only the collectors of the levy. The providers are the punters. The punters are represented on the Levy Board by the chairman of the Horserace Advisory Council. This is a very important point.

As I have already told your Lordships, I sat on the Levy Board for several years. As at present constituted, it is a wieldy and convenient board. It consists of eight members, and very seldom will a vote be taken. Matters will be argued out reasonably. Even when the noble Lord, Lord Wigg, was its chairman we did not have too many votes or differences of opinion. I am sure that the noble Lord, Lord Mancroft, will agree with me that in the end we came to a consensus opinion. Bookmakers very seldom dissented from that opinion. Nor did the Tote, except perhaps on the odd occasion. Therefore to bring another bookmaker on to the statutory board would make the board unwieldy. This is quite apart from the fact—I am not being facetious—that two bookmakers never really make as much sense as one bookmaker, because they seldom agree each with the other. If there were two bookmakers on the board, the structure of the bookmaking industry would be fraught with differences of opinion, arguments and various factions of bookmaking.

I should have thought that the real answer lies in the constitution of the Bookmakers' Committee, which, as noble Lords probably know, consists at the moment of 15 members. The legislation was altered in 1976. On that committee there are four members of BOLA, one member of the National Sporting League, who is a BOLA man, plus one Scottish representative, and nine members of the National Association of Bookmakers. It would be beyond my comprehension if they could not provide one representative to sit on the Levy Board to represent the bookmaking industry. I cannot see that there is any possible advantage in their having two representatives. I am very happy to support the Bill, so ably presented by the noble Lord, Lord Crawshaw.

12.35 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Belstead)

My Lords, this is certainly an appropriate week in the racing calendar for your Lordships' House to be debating this Bill. Nor can I think of any Member of the House more appropriate than my noble friend Lord Crawshaw to be introducing this debate. My noble friend has had a lifelong interest in racing and has a deep concern for the prosperity of the sport. I congratulate him on introducing the Bill so clearly and for explaining its background, its purpose and its detailed provisions.

As my right honourable friend the Home Secretary said in another place, the Government had hoped to be able to find room in their legislative programme for legislation along these lines, but Parliamentary time has not allowed for this. Thus the Government were particularly pleased when the honourable Member for Devizes, Mr. Charles Morrison, having drawn fifth place in the ballot for Private Members' Bills decided to use that opportunity to introduce this Bill. As your Lordships who are taking part in this debate are aware, Mr. Morrison listened carefully to the views of all those directly concerned with the matters dealt with in this Bill and amended the Bill, where necessary, to take account of some of those views. The Government fully support the objectives of this Bill and the form in which it has reached your Lordships' House, and we very much hope that it will be on the Statute Book before long.

As my noble friend Lord Crawshaw has explained, the need for the Bill stems from the way in which British racing is financed: through the annual levy scheme established under the Betting Levy Act 1961, which was piloted through the House of Commons by my noble friend Lord Renton. That scheme was consolidated in the 1963 Act. The levy raised from bookmakers is used, as your Lordships well know, by the Levy Board for the purposes prescribed by the Act, including the improvement of racing, veterinary education and science and the breeding of horses.

May I say one thing in passing. There are two important features which have become very clear from the speeches that have been made during today's debate by so many of your Lordships who in one way or another have a close knowledge of racing. The first important feature that strikes me, arising from the speeches which I have heard, is that the levy arrangements enable the financial needs of racing to be met entirely by those who enjoy racing and betting. This in itself contributes to the way in which the financial arrangements have worked so well. My noble friend Lord Mancroft quite rightly reminded your Lordships that British racing receives no direct financial support from the Government. Indeed, it makes a substantial contribution to the Exchequer. In 1979–80, which is the last year for which I have figures, over £172 million was collected in betting duty on horseracing.

The second point which occurred to me while listening to the speeches is that it is wholly desirable that these arrangements rely entirely upon agreement between those who collect and spend the levy, the Levy Board, and those who contribute to it, the bookmakers. No other party is directly involved in these arrangements, except in the rare event of the two sides not being able to agree on the details of the levy scheme in time for that scheme to take effect in the next levy period. If that happens, and only then, are the Government involved in fixing the levy. I was happy to hear my noble friend Lord Crawshaw say that in only three years since these arrangements were introduced has a Home Secretary been required to determine a levy scheme. In all other years the board and the Bookmakers' Committee have together agreed the arrangements for the annual levy.

The Bill does not alter the fundamental principles which underlie the present well tried arrangements for financing racing. It simply increases the options available to the two sides when agreeing the terms of these levy schemes. As my noble friend who is introducing the Bill today has explained, the levy schemes are based on the current turnover of bookmakers. However, this has meant that final liabilities could only be determined after the end of the year to which the scheme related. To prevent the loss of a full year's levy, payment of instalments on account of final assessment has been needed. But such advance payments have not been enforceable, and they cannot be made enforceable under the law as it exists at the moment. Although a levy scheme involving advance payments has been operating on a voluntary basis for the past two years, only a limited number of bookmaking firms has agreed to make these advance payments, and the Levy Board had to agree to pay interest on these payments. That interest has amounted to about £¾ million, again in the last year for which there are figures—l979–80.

Under this Bill, if the two sides agree that a levy scheme should involve advance payments on an instalment basis, all bookmakers would have to bear their full share because under the Bill such a scheme would he enforceable before the courts. This would provide the Levy Board with a secure basis on which to plan its expenditure throughout the year, rather than its being dependent for its finance on the goodwill of a relatively small number of bookmakers who have been carrying a burden which should be shared by all. From what I heard of the debate I think I am simply repeating what all your Lordships feel, that additionally the Levy Board would be relieved of paying large sums in interest which would be better utilised to the benefit of horseracing.

Even before the Bill was published I understand that my honourable friend in another place, Mr. Morrison, met representatives of the Bookmakers' Committee to discuss what the Bill should contain and, in addition, a proposal that a mechanism be introduced to deal with cases where a bookmaker would suffer genuine hardship if he had to meet the schedule of advance payments set for him by his notice of determination was incorporated into the Bill by the promoter, by the addition of a new clause at the Committee stage. That is now Clause 3.

One proposal to which the promoter of the Bill did not agree to give effect in the Bill stemmed from a fear which was expressed by some bookmakers that the arrangements proposed in this Bill could enable the Home Secretary to determine a levy scheme which would require bookmakers to pay the whole of a year's advance payments in one lump sum. The Bookmakers' Committee therefore asked that the Bill should be amended to prohibit the Home Secretary from doing this, but my honourable friend the promoter of the Bill did not think it was right for this matter to be dealt with in the Bill and, speaking on behalf of the Government, I am bound to say, nor do I. As I said earlier, the essence of these annual levy schemes is that they are left to be agreed between the parties directly concerned and it would be contrary to that principle to set limits in the Bill to the kind of scheme to which the two sides were free to agree and for this reason I am sure it is right that the Bill should be silent on the possibility of a single levy payment being required.

However, I must tell your Lordships that I do not believe that there are any real grounds for the bookmakers to believe that the present Home Secretary, or any of his successors, would be likely to fix a levy scheme which would demand the whole of a bookmaker's contribution by means of a single sum to be paid at the beginning of the year to which the levy scheme applied. I am confirmed in this view by the undertaking which the present chairman of the Levy Board has given on this matter on behalf of the full Levy Board. Without pre-empting what Parliament may decide in considering this Bill, the chairman has written to my right honourable friend to say that the board would not seek to incorporate into any levy scheme under which the turnover in the levy period itself formed the basis of levy liability, any provision which would require bookmakers to make a payment in advance of the business to which that payment relates.

In another place my right honourable friend the Home Secretary welcomed the Levy Board's undertaking and commented that while he could speak only for himself he could not imagine any future Home Secretary determining a scheme in the event of a dispute without taking full account of this commitment given by the present chairman of the board and without taking account also of what was said in this House and in another place during the course of the passage of this Bill.

Referring briefly again to Clause 3, which enables the notice of determination of levy to be varied to reflect a significant change in a bookmaker's circumstances—the clause which was specially put into the Bill by my right honourable friend the promoter of the Bill in answer to representations—in those circumstances the Government-appointed members of the Levy Board are empowered to direct that all payments shall cease to be payable or that they shall be reduced to such amount or amounts as they, the Government-appointed members, shall specify, and if they decide that neither of these courses of action is appropriate they must dismiss the application. As your Lordships will have noticed from the Bill, they may consult the Bookmakers' Committee or anyone else they think proper, but what they are not empowered to do is to increase the size or frequency of advance payments. In other words, under Clause 3 they may decrease the advance payments due to the board but they can never increase them.

There is just one question which, if my noble friend Lord Crawshaw, will allow me to stick my oar in, I should like to refer to. The noble Lord, Lord Renton, referred to the undesirable effects which could ensue, as my noble friend saw it—if the combined effects of the levy and betting tax become too high and the noble Lord, Lord Peart, in his speech, in very much the same tone referred to pressures upon the levy through (as the noble Lord sees it) the policy which has been followed so far as prize money is concerned. I realise that there have been conflicting views about the board's decisions so far as prize money is concerned. Of course this is not a matter in which the Government have any standing; it is for the board itself to decide how best to spend the levy in the best interests of racing, but I realise that I cannot leave my answer there because the noble Lord, Lord Peart, and my noble friend Lord Renton, went on to suggest that the membership of the Levy Board should be increased to make room for a second bookmaker on the Board and, indeed, my noble friend mentioned the desirability of making room for a representative of the Horserace Advisory Council.

Apart from the reply which the noble Lord, Lord Manton gave to my noble Friend Lord Renton on that final point, there are two problems about what both noble Lords are suggesting. The first is that as my noble friend Lord Renton said, one has to look at the safety of this Bill and the fact that, as I understand it, all your Lordships have expressed a wish to see the Bill get on to the statute book. I am very much aware that in another place on Third Reading my honourable friend the Minister of State, at column 399 of Hansard of 8th May, made the point that to deal with the representation on the Levy Board would fall outside the scope of the Bill. I quite realise that this would be a matter for the House. The Long Title of the Bill could be changed; these matters could be altered and it would he for the House to deal with, but as soon as we started going as wide as that then I think the passage of the Bill would be jeopardised. I think it is reasonable for me to raise that as a problem.

The second problem, as I see it—and the point arises from the important remarks made by the noble Lord, Lord Peart, and my noble friend Lord Renton—is that I think it is questionable whether it would be right to amend the present constitution of the Levy Board without very careful consideration being given to the effect of any change on the relative weight on the board of the various interests now represented. I say that particularly in the light of the very interesting speech made by the noble Lord, Lord Manton. For this reason I think it might be more appropriate to consider such suggestions for increasing the representation of bookmakers on the Levy Board in the context of comprehensive gambling legislation, following the recommendations of the Royal Commission on Gambling, chaired by the noble Lord, Lord Rothschild, which the Government intend to introduce in due course.

This Bill is not in any way a matter of party political controversy; it will ensure the continued prosperity of a sport which has long been part of our national way of life and which continues to give great pleasure to millions. I am most grateful to my noble friend Lord Crawshaw for introducing this Bill in your Lordships' House, and I give him the warm support of the Government.

12.49 p.m.

Lord Crawshaw

My Lords, it only remains for me to thank your Lordships for the two things for which I really asked: one was support and the other was speed. I have managed to receive both and I am grateful for them. I should like to thank my noble friend Lord Belstead, speaking on behalf of the Government, for his support and for his explanation of the Bill, which was probably more lucid than my own. I was grateful for his views about bringing any fundamental changes into this Bill because of the possibility of losing it and also because of the prospect of Government legislation which is pending on the subject of the changes in the Levy Board, and so on. I tend to agree with him that that is probably a more suitable vehicle, rather than jeopardising this particular Bill. That was, I think, one of the main points raised by the noble Lord, Lord Pearl.

I will just say something briefly on his other point. He was a little worried about what he called the overspending of the Levy Board and money front the levy going in the wrong direction. Well, I will not argue with him; I do not suppose the Aga Khan is worrying where his next meal is coming from, but, speaking as a more impoverished English owner, from time to time one does find that the business of horseracing is a very expensive one. Probably the noble Lord, Lord Peart, has indulged in it himself before now, and certainly the noble Lord, Lord Wigg. I do feel that the average English owner does not find it an easy exercise to keep horses and I think he really does need all the assistance he can get. Apart from that, the upkeep of some of our older racecourses is a matter of considerable expense. We may he faced with a new grandstand at Epsom, and there is the whole question of Aintree and all the rest of it. So I think there are plenty of ways in which this money can be well spent. My feeling is that the Levy Board does a good job on it.

My noble friend Lord Mancroft did just float the possibility of this Tote monopoly; he did it very subtly. I suppose that is just another way of channelling more money into racing should it have to come, but we are very much hoping to continue on our present basis, and that will keep racing in its usual aspects in this country.

My noble friend Lord Renton—unfortunately, he has had to leave us—also mentioned this question of the membership of the Levy Board. As I say, I will consult with the noble Lord, Lord Belstead, about this, but I think he indicated the path we should go on. It is, as he said, well outside the scope of this Bill. My Lords, I simply want to repeat my thanks for the interest shown in the Bill, and I hope we shall dispatch it as quickly as possible.

On Question, Bill read 2a, and committed to a Committee of the Whole House.