I beg to move,
That leave be given to bring in a Bill to provide for the establishment of a Football Betting Levy Board with powers to impose levies on football betting and allocate such moneys to the sport of football in general; and for purposes connected therewith.
I shall not take up the time of the House in talking about the current financial crisis which is affecting the national game of football since there have been one or two debates on the matter recently, but I wish to put on record certain facts. The Government intend to take £4 million out of the game through value added tax in April. Following the Wheatley Report on crowd safety, which came after the Ibrox disaster when 65 people were killed, we understand that the Government have proposals to compel football clubs to spend a lot of money on improving the safety and amenities of their grounds.
These proposals come at a time when football in general is in a financial crisis. Attendances have fallen dramatically. Whether this be due to the effect of television is, perhaps, arguable, but attendances have certainly gone down. The clubs have tried to rectify the position by putting up admission charges, and the situation has been getting worse day by day. Well-established clubs such as Doncaster and Barnsley are drawing only 2,000 spectators or fewer.
There is the question of the size of transfer fees. People ask why clubs cannot finance themselves adequately if transfer fees are so high. The trouble is that transfer fees are money which stays within the game, not fresh money brought in. It is rather like food which is passed around a table while no fresh supplies are coming in through the door. The clubs keen each other alive—and only a few clubs are concerned with transfer fees anyway. A fresh injection of cash is needed from outside the game or many clubs will face a financial crisis. Some of them will go bankrupt, if not this season then next.
The House called for a report on football to go into the game in detail and accordingly a report was made in 1968. It was the Chester Report which was commissioned by my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) who was Minister for Sport at the time. One of the recommendations in the report was that a football betting levy board should be set up along the lines of the Horserace Betting Levy Board, which was introduced under the Betting and Gaming Act 1963. One of my former right hon. Friends, Lord Wigg, took over the chairmanship of that board in 1968 and he has turned it into a great success.
The recommendation for such a board for football was never implemented because in 1968 the clubs were doing very well. That was the period just after the World Cup Competition. Because of the interest generated by that event, attendances were very high and the clubs' incomes were satisfactory. At that time, also, the football pools were not doing too well.
Since then the situation has changed drastically. The pools, particularly in the past two years, have become very profitable and the football clubs have been running at an ever-increasing loss.
Several factors have affected the football pools in the last two years which have boosted their revenue considerably.
First, they introduced a system called score draws which meant that the number of winners went down, the size of dividends went up and pools winners were picking up about £500,000 for the first prize. That, attracted a great deal of publicity and it tempted more people to bet with the pools. The second thing to boost revenue was decimalisation because it increased the smallest unit of currency, and the minimum stake went up by at lest 20 per cent. The third was unemployment. As unemployment increased, more and more of the unemployed risked 25p or 50p a week to try to win the pot of gold at the end of the rainbow. The fourth factor was the postal strike. As a result of it the pools firms concentrated far more on door-to-door collectors. The collectors were anxious to get their commission and they kept up colleting right through the summer, thus giving a boost to betting on Australian football.
The fifth factor was the natural technological development of computers so that firms like Littlewoods were able to cut their staff by 50 per cent. That boosted revenue by 29 per cent. Their total revenue is now £168 million, although less than £1 million goes to the sport, under an agreement drawn up with the Football League for the copyright of the fixture list. The agreement was unfortunately drawn up to run until 1980 and has consequently been overtaken by inflation.
The pools pay the 30 per cent. betting tax but so do the bookmakers. In horse-racing, however, the bookmakers also have to pay a levy to the Horserace Betting Levy Board, and that levy is ploughed back into horseracing to improve amenities at the tracks, to increase the prize money and to encourage the breeding of horses. It has done nothing but good to the sport.
The Financial Times published figures about pools on 11th March, 1972 and on 4th September, 1971. They showed that revenue rose by 29 per cent. last year. Mr. Paul Zetter was reported as saying that the boom was only just gaining momentum. For every one person going through the football turnstiles and paying admission, 25 are betting on the pools but contributing nothing to the game which helps to keep the pools alive. The Financial Times said,
Last year the pools companies reported astonishing increases in revenue.
I consider that the pools companies are almost in need of examination by the Monopolies Commission because there are only five companies. They are private and they do not produce a detailed balance sheet and it is difficult to arrive at an accurate analysis of their profits. They claim that they make only
3 per cent. profit on turnover. That means that they make about £7 million profit on £168 million turnover. But profit on turnover is very different from capital employed. It could well be that the pools are making £7 million profit on annual expenses of £35 million to create a turnover of £168 million. In other words their actual profit is not 3 per cent. but more like 20 per cent.
If football is to survive—and it must, because it is a national game giving great enjoyment to the millions who watch it on television and bet on it on the pools—the House must take notice of the Chester Report and introduce legislation to set up a football betting levy board.
In conclusion, I should like to quote what the Chester Report said about the proposal for a betting levy board:
We hope that the very modesty of our proposal will charm the Government and Parliament into giving general support to the necessary legislation.