Clause 15. — (Betting Duty.)

Part of Orders of the Day — Finance Bill. – in the House of Commons on 15th July 1926.

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Photo of Sir Frank Meyer Sir Frank Meyer , Great Yarmouth

I will give the right hon. Gentleman an example of how, if I so desired, I could evade his tax, and I challenge him to tell me how he will prevent that form of evasion. I have no intention of evading the tax The only way in which I might evade it would be by reducing the number of bets—they are comparatively few at present—which I have. Assuming that I made a habit, which I do not, of betting in multiples of £10—there are many who frequent the racecourse who do so—and that my stake varies from £10 to £100. All I have to do is to tell my bookmaker that in future I shall bet in £1 multiples, but there is to be this understanding between him and myself, that when I say £1 it means £10, and when I say £10 it means £100, and so on. That is to be the arrangement between us. If I am found out I go to gaol, but how is the right hon. Gentleman to find me out? The accounts will be rendered at the end of each week showing multiples of £1 instead of multiples of £10. At the end of each week, month, or season, there will be a bigger instalment to pay one way or another, but that can be disposed of by entering on the hooks or the vouchers one single bet to make up the amount of that difference. In that way you have taken away from the revenue one-tenth of the tax. If the Chancellor of the Exchequer can tell me how he will discover a fraud of that kind I. shall be very much obliged.

10.0 P.M.

I only say that to show how absolutely necessary it is, if he wants to collect this tax, for the Chancellor of the Exchequer to have the goodwill of the bookmakers and the backers as a whole. He can get that goodwill if he makes the tax of a size and of an amount which they think is tolerable and which can be imposed without seriously diminishing betting as a whole. The right hon. Gentleman has reduced the tax from 5 per cent. to 2½ per cent. on the course and 3½ per cent. in the office. I am going to vote for that concession but I still think the Chancellor of the Exchequer has made a mistake. I think that the tax ought to be 1 per cent. all round. That seems an extraordinary reduction from the original 5 per cent. but I believe that the whole of the figures of the Chancellor of the Exchequer as to turnover were based upon the evidence given and the Report presented by the Select Committee. It is extremely difficult to know what is the turnover on betting and nobody will ever know exactly what it is, but I have been privileged to see—and I believe the Chancellor of the Exchequer has also seen—the books of one of the largest betting firms in this country and the turnover of that firm now is about £5,000,000 per annum at present. The Chancellor of the Exchequer is basing his 2 per cent. and his 3½ per cent. tax on a turnover of about £300,000,000, which will be reduced by the tax to £225,000,000. If those figures are correct and if one firm has a turnover of £5,000,000 it means that this single firm is doing one-sixtieth of the total betting in this country. Now there are 5,000, perhaps 10,000 bookmakers in this country. How can it be said that this firm is doing one-sixtieth of the total turnover? What must the turnover be of those bookmakers who spend not hundreds, not thousands, but tens of thousands of pounds in advertising? I tell the Chancellor of the Exchequer that it is my firm conviction that the turnover of betting in this country is more like £500,000,000 and perhaps larger. If lie will make this tax one per cent. all round he will get his £6,000,000 with no loss of the good will of the bookmakers and backers.

I think the Chancellor of the Exchequer has also made a mistake in differentiating between course betting and office betting. It sounds a very good thing that a man who goes to a course and who takes an actual part in racing should get off more cheaply than a man who sits at home, but it is not so simple as all that. A very large percentage of those who go to the course do not bet across the rails with the bookmakers, but they send telegrams to their bookmaker in town. They do not like all the fighting and hustling that takes place in the ring, and they prefer to go to the telegraph office and to send their wires. Others go to the course and do not send telegrams or telephone. They have only to pay 2 per cent. tax, but the others, by sending a telegram have to pay 3½ per cent. The Chancellor of the Exchequer has said that the only way the tax can be collected by the bookmakers through their clients is by shortening the odds. He admits that any other way may cause irritation and that that will reduce betting and that the tax thereby will be seriously affected. But who is it who makes the starting price? It is the course bookmaker, and he has only to pay 2 per cent. He will take that 2 per cent. into account when lie fixes the starting price, and the man in London will have that price fixed by the bookmaker who has to pay 2 per cent., while he himself has to pay 3½ per cent.

Where is that 1½ per cent. to come from? Is it to come from the bookmakers? We know that the bookmaker will collect it from his client in the irritating way that the Chancellor of the Exchequer indicated when he said that the only way to collect the tax was to pass it on by shortening the odds. I only want, in conclusion, to emphasise again what the hon. Gentleman the Member for Islington (Mr. Montague) said so clearly and so effectively, that it is not the least good thinking you can make people good in this country by moral legislation. Whatever the Member for Dundee may say, and I give him the greatest credit for his courage and sincerity—and I give the Noble Lady credit also—you will not stop people from gambling by any forth of legislation. You are not going to encourage them to gamble more by putting a tax on them. The constant repetition of the words "vested interests," which is a favourite expression, is used in a false connection. How do you give a man a vested interest if you give him a licence when he applies for it? The publican must prove his good conduct before he gets a licence, but a bookmaker who takes out a licence just as a man does who drives a motor car, does not get a vested interest. It is ridiculous to say that a man for £10 a. year, whose conduct is not investigated and who has to submit no references, gets a vested interest.