Before the Secretary of State for the Home Department speaks, I should like to point out that there are two matters that are sub judice to which right hon, and hon. Members might seek to refer. The question of the Victoria Sporting Club and the question of Ladbroke are sub judice and I hope that right hon, and hon. Members will avoid mentioning them.
I shall enlarge upon it. I was referring to the appeal by Ladbroke's against the decision of the Westminster licensing justices that they are not fit and proper persons to run casinos.
I beg to move,
That this House takes note of the Report of the Royal Commission on Gambling (Command Paper No. 7200).
I am glad that the House has this opportunity to debate the report of the Royal Commission on gambling. The Royal Commission, under the chairmanship of Lord Rothschild, was appointed in February 1976. It took evidence and received assistance from the numerous individuals and organisations listed in the appendices to the report. The report was published in July 1978. It runs to two volumes and covers 581 pages. It contains 303 recommendations. Since then, the Home Office has received comments on the Royal Commission's proposals from a great variety of bodies. For these we are most grateful.
I should first like to pay tribute to Lord Rothschild, his fellow Commissioners and their staff. They have performed a notable service. Not only have they discussed the subject in detail, but they have made specific proposals to deal with the problems that arise in each sector of the gambling industry. It is a vast industry. As the Commission shows in the introduction, more than £7,000 million was staked in 1976 on all forms of gambling in Great Britain, of which about £6,300 million was returned in winnings. The Commission has also gone to great trouble to provide the fullest possible information for the punters on the odds at roulette, the rate of return to be expected when they put a coin into a one-armed bandit, and so on.
The Royal Commission reviewed developments since the report of the previous Royal Commission nearly 30 years ago and endorsed the attitude taken by the previous Commission, which it summarised as follows. It was first:
to interfere as little as possible with individual liberty to take part in the various forms of gambling but to recommend the imposition or continuance of such restrictions as are desirable and practicable to discourage socially damaging excesses and to prevent the incursion of crime into gambling.
Secondly, it was:
to support broadly the principle that the facilities offered should respond only to un-stimulated demand.
Since those principles were first enunciated, we have had Lord Butler's legislation in the early 1960s which, amongst other things, legalised off-course cash betting, and those provisions have remained virtually unchanged for nearly 20 years. We have had the Gaming Act 1968, taken through this House by the right hon. Gentleman the Leader of the Opposition, which gave us the Gaming Board and brought casino gambling under control. We have had the lotteries legislation introduced in 1975 by the previous Government, which is a rather less effective measure that has not, in the event, proved adequate to deal with recent developments in the lotteries field and was strongly criticised by the Royal Commission on that account.
Our aim should be to build on the existing legislation and bring it up to date in the light of changed circumstances. The vast amount of money that changes hands, and the possibilities that that provides for exploiting human weakness, are such that firm controls are needed to reduce the scope for crime and, while not encouraging the growth of gambling, we must try to ensure that those who indulge in it get a fair deal.
The main object should be to provide effective statutory provisions and regulations. In addition, some direct supervision and monitoring of gambling activities by the Government is required. However, the resources for that, as for other Government functions, are and must be limited.
The Gaming Board already keeps under review, as required by the 1968 Act, the extent, character and location of gaming facilities. It is important to bear in mind that the board's costs are covered by the fees charged to the industry. The Royal Commission, however, went further and proposed that the Home Office should be
a central agency, actively concerned with the supervision of all forms of gambling".
The Commission also recommended that the Home Office should fund a gambling research unit
to monitor and study the incidence, sociology and psychology of gambling".
I make it clear that I do not believe that we should be justified in providing the additional resources needed to enable the Home Office to be actively concerned with the supervision of all forms of gambling, nor do I consider that a sufficient case has been made out for the Home Office to fund a new research unit to study the sociology and psychology of gambling. The collection of information about the incidence of gambling is another matter. That information is at present scattered among a number of different publications, such as the annual reports of the Gaming Board and statistics produced by various Government Departments, and that makes it difficult for Parliament and the public to obtain a clear picture of the whole field. My Department is therefore preparing a new publication, the first edition of which should be available early next year. It collects together in one place statistical information about the various forms of gambling.
When, nearly 20 years ago, off-course cash betting was legalised and betting shops began to be set up which were likely to reduce attendance at race meetings, a bargain was struck with the bookmakers under which they agreed to contribute towards horse racing out of the proceeds of betting; hence the establishment of the Horserace Betting Levy Board that comprises representatives of the Jockey Club, the Tote and bookmakers, under an independent chairman and two other members appointed by the Home Secretary.
The money raised from the Tote and the bookmakers through the levy is required by statute to be devoted to the improvement of breeds of horses, the advancement or encouragement of veterinary science or education and the improvement of horse racing. The levy has increased from under £2 million in 1962–63 to over £12 million in 1978–79, and most of that money goes towards racing, particularly towards prize money and the improvement of race horses.
The Royal Commission examined the principle underlying the betting levy. It was satisfied that British racing and its associated activities needed financial assistance, and concluded that:
the levy on betting is a satisfactory method of collecting money to subsidise racing which is probably more in accordance with the wishes of punters than any other system".
The Commission, however, made certain criticisms of present arrangements. As the levy is now, in effect, paid by the punters, the Commission saw no need for the continuance of the bookmakers' committee, which each year negotiates the levy scheme with the Levy Board. Secondly, it considered that the division of authority between the Levy Board and the Jockey Club led to duplication and inefficiency. Thirdly, it took the view that the Jockey Club does not represent a sufficiently wide range of interests to enable it to act effectively as an administrative authority for the racing industry as a whole.
These criticisms led the Royal Commission to recommend the establishment of an entirely new body, a British horse racing authority that would include representatives of all the main interests of the industry—the owners, breeders, stable staff and racecourses, as well as the Jockey Club, the Levy Board, the Tote and the bookmakers. The Commission proposed that the new authority should take over most of the standing functions of the Levy Board, which would have its membership reduced to a chairman and two independent members, and would be serviced by the Home Office.
When we came to office in May, I knew that there was a great deal of opposition in the racing industry to the Royal Commission's proposals. I found that the industry was giving serious thought to ways of achieving by simpler means the Commission's objective of enabling the various interested parties to make their views known before decisions are taken on how the proceeds of the levy are spent.
After consulting the Levy Board, the Jockey Club, representatives of the all-party racing committee, and my hon. Friend who has responsibility for sport, I announced on 19 July, in reply to a Question from my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson), that I had reached the conclusion that a British horse racing authority was not needed at present but that I welcomed the steps being taken by the racing industry to establish a consultative body, representative of all sectors of the industry, which would advise the Horserace Betting Levy Board.
Since then, I am glad to say that progress has been made by the industry in formulating proposals for a horse racing advisory council, broadly representative of all the interests concerned, which would act as an advisory body to the Levy Board. The constitution of that body has been under consideration by the Levy Board and the stewards of the Jockey Club. I understand that there are one or two matters still to be settled, but the intention is that the chairman of the new body should occupy one of the Jockey Club's three seats on the Levy Board.
I emphasise that the horse racing advisory council will not be a Government body. It is the result of initiatives taken by the racing industry, and all the appointments to the council will be made by the industry. My responsibility will be limited to approving the payment of expenses out of the proceeds of the levy. This I shall be very ready to do as soon as the arrangements for appointing the council have been settled. Legislation is not required to enable it to function. The intention is that it should come into being on 1 January 1980. I am sure that without the stimulus provided by the Royal Commission's more radical proposals we should never have reached this stage. The Royal Commission went to great lengths to analyse the industry's problems in depth, and it was in no doubt that a representative body was needed. The industry has accepted the need and has worked harmoniously to devise a simpler solution which builds on the existing arrangements and has the support of all the principal bodies concerned. I wish it every success.
Apart from the addition of the chairman of the racing advisory council to membership of the Levy Board in place of one of the Jockey Club members, I do not envisage any major changes in the present arrangements or the levy. The Royal Commission drew attention to certain difficulties in the machinery for assessing and collecting the levy which could lead to levy avoidance on a substantial scale. I know that the Levy Board is most concerned about this. In the past few weeks my officials have been in close consultation with the board's staff about ways and means of overcoming the problem. In so far as amending legislation may be required to deal with it, I must tell the House that I see no prospect of Government time for a Bill this Session, but my Department will do everything in its power to assist the Levy Board to reach a satisfactory conclusion.
As I understand it, only a very small amendment would be required. It would almost certainly be non-contentious and it could be introduced by the Government at any time they wished—even late in the evening. Certainly, this would make an enormous difference to the Levy Board in enabling it to get money from the undoubtedly unscrupulous types in that industry who are working right outside the law, and avoiding a sum of £1,500,000 to £2 million. Having said all the decent things that the Home Secretary has said about the Levy Board so far, what does he mean by saying that he cannot find time? A Government can find time for anything if they want.
The right hon. Gentleman is a very old hand, as I am, at meeting requests for Government time in the House. I am very anxious to see progress on this front. It is right to have the consultations first. I would be very ready to help a Private Member's Bill of this kind. Indeed, I would go even further. If I could be absolutely assured that a very simple Bill could be provided and that it would have the full support of all those concerned and of the House and that it would get through very quickly, I would be ready to move. But I have had great experience of this House, and the assurances of one or two right hon. or hon. Members—even those of the greatest eminence—has never been quite enough for me. I need the utmost assurance before I will act.
If the usual channels—and the Home Secretary was a great expert in this erea—mean anything at all, this is the ideal opportunity to test them. If he would initiate an amending Bill I think that he could be pretty sure of the good will of the House. I am sure that we could get this very tiny amendment which represents a difference of nearly £2 million.
I must respond to both right hon. Gentlemen. I do not quite understand the reference to the colour of my money. In this instance the colour of my money would in fact be the taxpayers' money and I hope that that money would go to racing as the result of our actions. In reply to the right hon. Member for Bermondsey (Mr. Mellish), I will look at this, but I must be very much assured because I have no authority in these matters. I have no authority to speak for my right hon. Friend the Chancellor of the Duchy of Lancaster.
I turn to the question of the Tote. The Royal Commission devoted a chapter of its report to the Tote. In effect, it recommended no change in the present arrangements. I see no reason to dissent from that. I would add only two things. First, in the period that has elapsed since the Commission considered the matter, the Tote has shown substantially increased profits and now there is no doubt at all that it is making a significant contribution to racing. Secondly, just before the House rose for the Summer Recess I appointed Mr. Francis Aglionby, a recorder of the Crown Court, to hold an inquiry into the Tote's procedures for the inclusion in the on-course pools of bets made off the course. The inquiry is in progress and its findings will be published. Until then I shall say no more on that subject.
When there is an opportunity to legislate, it is clear to me from the Royal Commission's report and the comments that we have received on it, that we shall need to make a number of changes in the law relating to such matters as the procedure for obtaining bookmakers' permits and the signs that may be displayed in or outside betting shops. The Royal Commission also recommended that the Office of Fair Trading should promote a voluntary code of conduct to provide protection for the betting office punter. I understand that the Office of Fair Trading is in touch with the bookmakers associations about this.
I turn now to greyhound racing. It is clear from the comments that my Department has received that many of those who are concerned with this sport are disappointed that the Royal Commission did not recommend a greyhound racing levy. I note that the industry has suffered considerably from the introduction of off-course cash betting, but I regret to say that I agree with the Commission that a case for a levy is not made out. On the other hand, I also concur in the Royal Commission's proposals for some modest increases in the permitted number of races per meeting and in the number of meetings allowed each year. I understand that these increases should help significantly the profitability of the sport, but these improvements also will have to await the opportunity for legislation.
Before leaving the subject of betting I should mention another proposal made by the Royal Commission. This is the recommendation that bookmaking on tracks should be confined to the sport taking place on the track on that day. The betting legislation defines a track as
premises on which races of any description, athletic sports or other sporting events take place.
The Royal Commission had in mind the situation in which, for example, full on-course betting facilities had been provided at cricket matches and bets were taken by certain bookmakers on horse races, greyhound races and other activities as well as cricket. There are two possible objections to such arrangements. First, a monopoly may be created if those who control the cricket ground provide facilities only for one bookmaker. Secondly, the licensing procedure
is circumvented as the betting tents at cricket grounds and elsewhere are not subject to the controls that apply to betting shops. For these reasons, the Royal Commission made its recommendation which would allow a bookmaker at, say, York racecourse, to take bets on horse races at that course and also at Newbury but not on cricket, tennis, football or any other sport. Similarly, bookmakers at cricket grounds would be confined to bets on cricket matches. I have an open mind on this proposal, and I shall welcome the views of the House.
Nor do I blame myself.
When the Royal Commission report was published in July 1978, the subject that hit the headlines was lotteries. This was not surprising in view of what the Commission said about lotteries in the spring of 1978 when it looked into this matter. I quote from its conclusions in chapter 12, paragraph 134:
Despite the good work being achieved through many lotteries, the situation we have discovered is scandalous. There is wholesale disregard of the law which is inadequate and confused, commercial exploitation to a totally unacceptable degree, gross lack of security and, we strongly suspect, a good deal of plain dishonesty.
The Commission had in mind the legislation which was introduced by the previous Government in 1975 and which permitted local authorities to run lotteries for the first time and greatly increased their maximum turnover from £750 to £40,000. The subject has changed a great deal since the Royal Commission reported. Lotteries are not as popular as they were. Moreover, examination of the Commission's 65 recommendations on the subject has led us to the conclusion that some of them are unnecessary, impracticable or could not be implemented without unacceptably large increases in staff.
Nevertheless, there remains cause for considerable concern about the way in which some lotteries are run. I am not concerned with small lotteries that are incidental to fetes, dinners, dances and sporting events. Such lotteries often form a very enjoyable part of those occasions. As the Royal Commission indicated, as regards the larger lotteries, there are three main matters to be dealt with if the system is to be reformed: prevention of commercial exploitation, improved control of lotteries and control of lottery tickets.
There is not much that can be done to improve control over lotteries without substantive legislation. I regret that there is no prospect of Government legislation on the topic in this Sesison. However, I have power to make regulations. Last week, my Department sent a consultative document to the local authority associations and other bodies concerned. That document contained proposals for new regulations which would go some way towards achieving the objectives to which I refer. Copies of the document have been placed in the Library of the House.
In particular, the proposals for the new regulations seek to ensure that the tickets and advertisements for lotteries do not make it appear that the lotteries are being promoted by commercial firms. Parliament intended the lotteries to be promoted either by local authorities or on behalf of societies that are established for charitable, sporting or cultural purposes.
In this respect, our proposals do not go as far as the Royal Commission recommended. The Commission recommended that societies and local authorities should be prohibited from employing what it refers to as "external lottery managers"—in other words, agents who take over the complete running of a lottery, hoping to make a profit out of it. Having considered the Commission's arguments and the comments made on them, I believe that local authorities and societies which are promoting lotteries should be free to employ agents to manage their lotteries if, in their judgment, that is the most effective way to run the lottery. However, it should be made clear that, as the law requires, the lottery is being promoted by the local authority or on behalf of the society concerned because those bodies are ultimately responsible for all the arrangements—particularly for ensuring that lotteries are properly conducted.
The Royal Commission proposed the establishment of a national lotteries board consisting of about 10 members appointed by the Home Secretary. That board would run a national lottery for good causes. However, I have grave
doubts about the matter and not only because that would involve the establishment of another quango. I recognise the attractions of the proposal as outlined by the Royal Commission in that a national lottery:
could provide in our society a source of money to be allocated to deserving causes unfettered by short-term political and public pressures, meeting, as the Government can scarcely do, the need for large-scale benefaction of particular types.
However eminent and impartial the members of a national lotteries board might be, it might experience grave difficulty in deciding on the proper allocation of tens of millions of pounds a year in such a way as to satisfy Parliament and the public. Moreover, we need to consider the effect of a national lottery on the existing lotteries and on the income which local authorities, charities and others derive from the lotteries. The Government have reached no conclusion on the proposal. Again, I would welcome the views of the House on the matter.
There is the special area of football. Some of my hon. Friends and I believe that the money for football lotteries should go directly to those who make football possible, the professional clubs and others. Is that matter to be considered in the Goverment's overall thinking?
Will the right hon. Gentleman indicate in his reply to that question whether he will go on to deal with the proposals for the football board and the whole question of football pools?
I shall deal with some of these matters. Those that I do not deal with will be covered by my hon. Friend the Under-Secretary of State for the Environment, the Member for Dumfries (Mr. Monro), who has special responsibility for sport, when he winds up the debate. I am conscious that my speech will be long, but he will deal with the matters to which I do not refer.
I turn to the Pool Competitions Act 1971. I know that some hon. Members are concerned about the future of the deserving causes which now benefit from the Act. It deals with competitions where the distribution of prizes depends on the outcome of sporting events, usually football matches. The Act was introduced following a decision by the House of Lords that a particular competition did not constitute lawful pool betting, as had been supposed, but was an unlawful lottery. The Act allows only the promoters of pool competitions in existence before it was passed to continue for the time being to run these competitions, subject to licences issued by the Gaming Board.
The competitions are run in aid of charities which support spastics, research into cancer and polio and in support of football and cricket clubs. The Act was intended as a temporary measure to run for five years until 1976, with the provision that it may be extended for a year at a time. Before Parliament rose for the Summer Recess, it was extended for a further year until July 1980. The Royal Commission recommended that the Act should be allowed to expire, primarily on the grounds that special exemptions from the law on lotteries should not be given indefinitely to a limited number of organisations.
The seven organisations which run these competitions have a greater turnover than is permitted under the lotteries law. Clearly, that special arrangement should not continue indefinitely. I hope that the House agrees that the best way to deal with the matter is to allow the Act to continue in force until Parliament has decided what changes should be made in the law on lotteries.
I turn to gaming. In a sense, that is the most serious aspect of the whole gambling business. It is in this way that the risk of invasion by criminals into the gambling scene is probably the greatest. One of the principal purposes of establishing the Gaming Board in 1968 was to prevent that invasion. That was a task the Royal Commission recognised the board had accomplished with considerable success. Much of the credit for that achievement should go to the first chairman, Sir Stanley Raymond, who retired in 1977. He was succeeded by Lord Allen of Abbeydale, the permanent Under-Secretary of State at the Home Office at the time of the introduction of the Gaming Act.
There has been much improvement since 1968, but the need for constant vigilance remains. Unfortunately, it cannot be said that the gambling scene in this country is free from all criminal elements. The increasingly international nature of the industry adds to the risks. That emphasises the importance of exchanging intelligence with other countries and of establishing good working relationships with the gaining authorities in this country. That is one of the many functions of the Gaming Board which it will, I am sure, continue to discharge as effectively as lies within its power.
While the Commission made a number of detailed suggestions for improving the supervision of gaming, it took the view that few radical departures from the existing systems of control were needed. It accepted the present pattern of about 120 casino clubs in Great Britain—more than 20 in London which account for about 75 per cent, of the business—catering primarily for the resident population. It rejected, rightly in my view, proposals that the rule requiring members to wait 48 hours before taking part in the gaming should be relaxed in favour of overseas visitors.
The Commission found that the regulations specifying the areas in which casinos are permitted have become out of date—as indeed they have—largely because of local government reorganisation. However, I find it difficult to accept the Commission's proposal that the regulations should be revoked and not replaced, leaving it to the licensing justices to have regard to a circular that the Commission proposes that the Gaming Board should issue listing areas as suitable or unsuitable for casinos. I shall be interested to hear the views of the House, but I doubt whether it would be right to allow any significant addition to the number of casinos already operating in this country.
The Commission examined in some detail the current arrangements for taxation of casinos and made far-reaching recommendations for changes in the system which it hoped would result in a substantial increase in the yield from casino taxation.
The House will not be surprised to hear me say that those recommendations, which are obviously a matter of considerable concern to the industry, are for my right hon. and learned Friend the Chancellor of the Exchequer to consider and it would not be appropriate for me to say anything about them today. However, I can say that the Commission's recommenations for changes in the law relating to cheques and the provision of credit for gaming in casinos are acceptable and we shall be prepared to implement them when there is an opportunity for legislation.
There are other changes recommended by the Commission that need to be brought into effect as soon as the law can be amended. Casinos should be required to provide the Gaming Board with audited accounts at regular intervals and that requirement should apply also to bingo clubs.
The board should also be notified of changes of control in companies operating gaming establishments. As the Commission put it:
the Gaming Board should in our opinion have power to penetrate the companies' corporate veil, discover who is really in control and take the necessary steps to exclude undesirables".
Another recommendation, which would benefit the industry as well as the Gaming Board, would allow applications for gaming licences to be made at any time of the year.
The Royal Commission formed a generally favourable view of licensed bingo clubs, which it considered to fulfil a valuable social function in relieving loneliness and boredom. There are about 1,700 bingo clubs scattered throughout Great Britain. Nearly 85 per cent, of the members are women, mostly middle-aged or older.
The Gaming Act 1968 made certain concessions to bingo clubs, as compared with casinos, on the ground that bingo was a neighbourly form of gaming for modest prizes and could be dealt with differently from other forms of commercial gaming.
I hope that it will be agreed that the distinction between bingo and what is sometimes referred to as "hard" gaming should continue, provided that the prizes remain modest and that firm control is maintained over any developments that lead to stakes being increased or the rate of play being speeded up.
Of course, that does not rule out increases in the limits being made from time to time to keep pace with inflation. The House may have noticed that the Government raised no objection to a Bill introduced by Lord Birkett in another place before the recess to implement the Royal Commission's recommendation that the Home Secretary should have power to vary by regulation the maximum prize in games of linked bingo, provided that the power was not used to make up all the ground lost since 1968.
The Commission devoted a considerable part of its report to gaming machines. For the benefit of those who are not familiar with the topic, I should say that there are two main types of gaming machine—amusements with prizes machines in which not more than 5p can be inserted at a time and the maximum prize is 50p in cash or £1 in kind and jackpot machines in which a 10p stake can produce a prize of up to £100.
There are more than 80,000 AWP machines, of which about 60,000 are in public houses and the rest in such places as amusement arcades and transport cafés. There are about 36,000 jackpot machines in licensed casinos and bingo clubs, with most being in registered members' clubs.
The main problem with AWP machines concerns amusement arcades. The police and the local authority associations proposed to the Royal Commission that controls exercised over such places by local authorities should be strengthened, primarily on the ground that amusement arcades tend to become the haunts of undesirables and that young people can be at risk.
The Commission made a number of recommendations for that purpose which are supported by the local authority associations, although the trade objects to some of them. I find most of the Commission's proposals acceptable, with the possible exception of the recommendation that the police and local authorities should have power to enter amusement arcades at any time. That requires further thought.
The control of gaming machines is a complicated business. The manufacture of the machine is, I am told, an area in which technology has made great strides in recent years. New developments are constantly being introduced.
At present the suppliers and maintainers of gaming machines need a certificate from the Gaming Board. The Commission recommended that that requirement should be extended to those who manufacture, import or adapt the machines and that the Gaming Board's inspectors and the police should have power to enter premises at any reasonable time. The purpose of those proposals, which have, not unnaturally, aroused some opposition, is to protect the public and we shall consider them carefully with that in mind.
With the same end in view, the Commission proposed that the law should make it mandatory for a player to know the true rate of return of a gaming machine. It suggested that no jackpot machine should be permitted unless it has prominently displayed on it a statement telling the skilled and unskilled player the machine's rate of return.
The Commission also recommended that all jackpot machines should contain within them, hidden from the player, a meter recording specified information and that all such machines, wherever located, should be available for examination by a Gaming Board inspector.
Those proposals have far-reaching implications and need to be considered in the light of the additional cost that would be involved for the Gaming Board and, hence, for the industry. A considerable number of staff would be needed, assuming that suitable people could be found to inspect every one of the 36,000 jackpot machines once a year. I do not believe that such a bureaucracy would be justified.
A particularly difficult problem in this area relates to gaming in members' clubs. Gaming in those clubs, of which there are about 19,000—compared with only 120 casinos and 1,700 bingo clubs—takes place on a large scale. The Royal Commission estimated the amount staked in the clubs at not much less than £400 million a year. All this gaming is largely outside the control of the Gaming Board or the police.
The Royal Commission was very concerned about allegations of fiddling in these clubs, particularly in the playing of bingo and slot machines. The Commission rejected, rightly in my view, a proposal that the police and Gaming Board inspectors should have a right of entry without a warrant. It recommended instead a form of self-policing under which regulations would be made requiring clubs to keep certain records and disclose them to their membership. We shall consider these proposals in consultation with the organisations representing the clubs and the National Council of Social Service which are, I understand, concerned particularly about the burden that the Commission's proposals might impose on small-scale gaming in community centres and old people's clubs. We shall need to be careful to strike the right balance between taking steps to reduce the scope for fraud and intervening in matters that should properly be left to the membership of the clubs.
On these and other matters the Government have not yet reached any decision. We look forward to consultation with those concerned before firm proposals are made for legislation. I realise that in the time available to me I have not been able to do full justice to the great variety of subjects dealt with by the Royal Commission and its many proposals for action. In particular, I have not referred to the football pools. This and other topics will, I know, be covered by my hon. Friend the Minister with responsibility for sport in winding up the debate. In the meantime, I look forward with interest to hearing the views of right hon. and hon. Members, and I undertake that these will be carefully taken into account when the Government frame the substantial legislation that is so obviously necessary.
Most weekends since the general election I have sat back and rather enjoyed the fact that mountains of paper would not be descending upon me on my return from the North. As I sat down this weekend by myself and without much advice, except at family lunchtime, about the Royal Commission's report, I could have wished that I had some advice to find my way through a complicated and valuable series of documents. None of us expected the Home Secretary to cover all the ground and all the problems that arise. I congratulate him on raising the most important ones for today's take-note debate.
I should like to concentrate on how we proceed further. I cannot set myself up as an expert on the various matters that have arisen. I had never previously been addicted to one-armed bandits, but during the last few months, in preparation for the debate, I have played well nigh every machine on the M1 and M4 as I go about my duties. I can confirm that the law of averages does not work. If there was some indication on these machines showing one's chances, I suspect that I would not have put in 10p at all.
I do not know about the machines, but I know something about human nature. When one puts 10p into a machine, one hopes very much that everyone before has lost and one is about to be the bloke who will win.
I put 10p into a machine in a working men's club not far from my right hon. Friend's constituency. My attitude was that if it won someone else could collect. I got the lot. But I was through the door and could not get back in time to collect it. That was my only success.
Looking back, I find that the only statement I have made on this matter was my comment when we received the report. I said that it would assist the Government in their consideration of these matters, and asked that those affected by the Commission's proposals should send their comments to the Home Office. I know that this has happened in a number of cases.
How does one handle these more than 300 recommendations? I should like to go further into thoughts that were on my mind before May. I should like to know whether the comments from outside bodies could be published. The views of the Jockey Club, bookmakers or other groups would be valuable in a concentrated form. This is not an issue that can divide the House on party grounds. Most hon. Members will have only a fragmented view.
We are now faced with the problem of House of Commons time. It will be years before some of these recommendations can be examined on the Floor of the House. I have learnt that with Home Office legislation—it is no fault of officials—by the time one legislates the facts and the investigation contained in a Royal Commission report are out of date. It is important, in order to make the weekend of the poor chap speaking on the matter more valuable, if clearer information were available on which he could concentrate his mind. I know that the right hon. Gentleman will consider that proposal.
My view is that we should try to be helpful on the legislation. The right hon. Gentleman is right. One cannot commit either side of the House, but it is slightly offensive to realise that there are gaps which lead to certain elements of criminality, although not precisely on this matter, that the House should plug. We are expecting the police to deal with matters for which we say we do not have the time. All hon. Members should apply their minds to that.
On lotteries, the right hon. Gentleman said that he had issued regulations last week. I presume that we shall be debating them shortly. I am not sure what type of regulations they are, but they are important. The Royal Commission said about lotteries:
… the situation we have discovered is scandalous. There is wholesale disregard of the law which is inadequate and confused, commercial exploitation to a totally unacceptable degree, gross lack of security and, we strongly suspect, a good deal of plain dishonesty.
That is not a situation which enables hon. Members to sit back and say that there is little we can do. I am not pre-empting time on the Floor of the House. If, by taking note—I might have done exactly the same—we pass by a chance of debating a more narrow aspect of gambling which would arise in relation to lotteries, it would be a mistake.
I should like to refer to the point my right hon. Friend made about getting together the opinions of outside bodies. This is vitally important. As the Home Secretary has said, we got things wrong last time. There is no inbuilt expertise inside Government Departments about gaming and gambling in general. It is much better to get outside opinion, even if it is contradictory, so that hon. Members may draw their own conclusions, possessing a much better knowledge of what happens inside the industry.
I no longer have to, and never had to, anyway, defend civil servants. The department in the Home Office that deals with this subject is excellent. I do not think that my hon. Friend is saying that it was not.
I take the point that expertise of a different nature has to be tapped.
The right hon. Gentleman listed some points about the new regulations. We may or may not have a chance to debate them, but what should we do about those that are left? I had not got to the point of deciding what to do about lotteries; we thought that it was better left until about April. However, I wondered whether this list was sufficient to deal with the abuses and I wondered why the other recommendations were not being dealt with. That may be left until later, but not if there is to be a debate, because the procedures do not lend themselves to it.
I had a dilemma on the Pool Competitions Act. It is clear from the Royal Commission report that the renewal of that Act every year is indefensible on the basis of strict logic. It is not just the Spastics Society, which has written to me and no doubt to others this weekend, which is affected; this applies also to football clubs in Scotland and to cricket clubs in England.
Whatever sympathy one has for the Spastics Society and for Cancer Relief and so on, one cannot justify an arrangement which applies only to one or two football clubs and one cricket club.
In the debate on 27 June, there were quotations from the Royal Commission. The Under-Secretary of State for the Home Department said:
Very big and very important money is raised by this form of pool. If that money were to be wiped out, it is obvious that there would be a serious problem.
The Royal Commission's view was that there were other ways of raising money in gambling, lotteries and so on. But I assure the hon. Member for Eccles (Mr. Carter-Jones)"—
my hon. Friend is always very active in looking after the disabled—
that I shall bear in mind what he said when we consider the matter."—[Official Report, 27 June 1979; Vol 969, c. 596.]
The Home Secretary said that we shall consider this matter in the course of the year, but I am not sure what it is we shall be considering. If we are considering the fact that the Royal Commission, and logic, show that it is wrong that these pools competitions should continue, that is one thing. I am not worried about the football and cricket clubs, because I am sure that they can find some other way of raising the money. But as for removing this source of income from the Spastics Society—I know that I am begging the question of other voluntary bodies that are treated differently—unless something is done about that before our debate, I shall vote to keep the pools competition going. I should be voting not from a consideration of logic, but on the real need of the Spastics Society. In a time of inflation, why should voluntary organisations miss out? Perhaps political parties miss out too, but I am not worried about that.
Perhaps the Minister can help us on this matter when he replies, or our debate before the end of the year will be the wrong way of proceeding.
I must agree with the right hon. Gentleman's conclusions. What I was saying was that we will have to continue with this matter until we have substantive legislation. I hope that that will be soon, and that we can then deal with all the other issues at the same time. I say this now to give the right hon. Gentleman a chance to comment if he wishes.
I am grateful to the Home Secretary.
I do not intend to consider every aspect of the report. What the Home Secretary says, on the basis of his advice and knowledge of what has come into the Department, is much more valuable to the House than personal views of mine. But a number of aspects concern me. One comes under the heading of "Gaming in Unlicensed Clubs and Miners' Welfare Institutes". The report refers to the problem of gaming in working men's clubs, Conservative clubs and miners' welfare institutes. I was disturbed by what the report said here. This was an aspect that had passed me by. It may exercise me as a constituency Member in relation to Conservative clubs, although not in regard to miners' clubs.
After saying that all was not well in these clubs, the report says that the clubs' solution was quite simple:
Mind your own business. These are private clubs belonging to their members. They have nothing to do with the Royal Commission, the police or the Gaming Board.
That is a nice short answer. The report says that the solution according to the police is also quite simple:
… give the police and Gaming Board inspectors right of entry without warrant.
The recommendations include registration, and the keeping of specified records of each game of bingo played in unlicenced clubs and miners' welfare institutes. The clubs would have to take on a paid staff of accountants. Those involved go to the clubs after having worked their shift, although one or two clubs have full-time secretaries. The report also proposes a monthly bingo account posted on the notice board. I will not go on with the detail, because it goes on to deal with VAT, which is not the least of the problems in many of these clubs.
The question that we shall be asked in our constituencies—someone will certainly report what I have said—is, what are we going to do about it? Joking apart, the view of the Royal Commission of some of those who gave evidence on this matter was not of the happiest. If we want to do something in this respect, we have to take account of what the Royal Commission said.
Does not my right hon. Friend agree that in many working men's clubs and miners' welfare institutes the committee largely represents the views and safeguards the interests of members?
I have no doubt of that. Those who run these clubs on a voluntary basis do a remarkable job. However, they are now dealing with large sums of money, and that is when the Royal Commission comes into the picture. When this matter reaches the Floor of the House, if it ever does, that will be another emotional aspect—although in a different way from the Spastics Society. I shall start my own investigations this weekend to see what people on the ground think. No doubt I shall receive an answer rather similar to "Mind your own business".
I had copious notes about horse racing, because I had come to some conclusions, but it seems that the Home Secretary has come to much the same sort of conclusions. I shall therefore say only this. Home Secretaries have an interesting job and cover a great deal of ground. When I became Home Secretary I knew very little about horse racing and I still do. The only time that I owned a horse was in Austria in 1945, when we bought stray Hungarian horses for five shillings a week. I looked at it once and thought that I might get on its back, but I never got to that point. I did own a horse for a period of time. It frightened me to death. It cost me five shillings, and then it went back to someone else.
Therefore, I know very little about the matter. However, I learnt that there was the problem of high stakes in other parts of the world to maintain the breed. That is important. I know little about gambling. However, I know that that is a most important element. We must provide the means, through taxation or the levy, to maintain standards. That aspect concerned me when I was Home Secretary. The direction in which the Home Secretary guided our minds was correct.
In recent years, there has been a great improvement in the Tote. Woodrow Wyatt—whose political views are not mine—has done a first class job in the Tote board. It was my job as Home Secretary to look at the matter in an objective way. The answer was clear. A good job was done by Mr. Wyatt and his staff. I am glad that the number of premises they own is increasing, as that is the way through.
The Gaming Board of Great Britain is also well run. Praise has been given to those in charge of it. We must look to the Gaming Board. The Home Secretary referred to the legislation required. There are problems about lotteries and casinos. I had other responsibilities as Home Secretary and the police warned me about the existing problems, as did the Gaming Board.
I shall leave the problem of football to my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell). I cannot pretend that the Royal Commission was glowing about those who gave evidence on the subject of football. We must think more about that subject.
The two-volume report of the Royal Commission, I find, is even better than I thought it was when I first looked at it, with advice, a year or two ago. It is brilliantly written and extremely clear so that the complicated betting matters, of which I know little, fall clearly into place.
I know the difficulties of translating the recommendations into practice. That is what concerns me when hon. Members on both sides of the House take note of the report. We must think carefully about it. One of the purposes of the debate is to listen carefully. I shall do so. If in any small way, on a non-party issue, we can get this matter moving forward much more quickly on clear information, which is not easily come by, I shall do my part to help, as it is important that the House should pass legislation on the subject.
I am delighted that the Government have provided time in which to debate the report. It is most encouraging that Front Bench Members on both sides should be in a good deal of agreement and enthusiastic for us to take further steps to implement some of the recommendations. So often an enormous amount of work is done on Royal Commission reports. Everybody works very hard to produce an excellent report, which then goes into a pigeon hole, never to be seen again. Little legislation may be implemented as a result of the recommendations. I hope that that does not happen to this report, as it is beautifully written and easy to read. There are many fascinating arguments in it. The House should implement many of its recommendations.
As chairman of the all-party racing and bloodstock committee—together with right hon. and hon. Members on both sides of the House, and especially the vice-chairman, the right hon. Member for Bermondsey (Mr. Mellish)—I can say that we submitted written and oral evidence to the Royal Commission. I am delighted that some of our submissions were acceptable and appear as recommendations.
Most hon. Members would be surprised to hear that 94 per cent. of the adult population have a flutter every year. As someone who enjoys a flutter—I am not an ardent gambler—I dare say that I should declare an interest. I should tell new Members that one of the best ways into the bankruptcy court is to listen to the tips given around this building. After 20 years in the House, I have yet to put my eyes on a good tipster. That goes for hon. Members on both sides of the House. But still we try. We make little progress. However, it is possible to make a few pounds betting on political leaders and election results. If one is cautious, one may back both sides of the House, at odds against, in different periods of a Parliament. I commend that to hon. Members.
Before dealing with the problems of racing, I should like to consider one or two points in other spheres of gambling. It is surprising that since the publication of the report in 1978 the Chancellor of the Exchequer has not taken the advice to increase substantially the charges placed upon casinos. I applaud the recommendation that charges made to casinos should be increased eightfold. However, in times when money is short and savings are looked for in every direction, I am surprised that chancellors are hesitant to take that action, which would raise £40 million in tax. Lord Rothschild and the Commission went into a great deal of detail over casinos and the casino industry, which they described as the greatest growth industry and one of the most profitable businesses in the country. The duty charged at present is far too low.
I do not believe that the recommendation for casinos to implement a levy of 7½ per cent. for chips would work. Indeed, anybody paying £107·50 for £100-worth of chips would feel that he had started to lose before he had gambled. Many gamblers, especially at the London casinos, come from overseas. If there were a levy on the drop—one of the suggestions made in the report—we would discourage them from playing at all.
One fascinating table—I recommend it, as it demonstrates the mind of Lord Rothschild—shows how the game of blackjack is played. After a careful analysis, it demonstrates that blackjack is played at odds that are much more against the punter in this than in any other country. The recommendation is made that in the game of blackjack the cards should be dealt in a different manner. That detail and trouble taken by the Royal Commission demonstrates how well its work was done. If anyone thinks of going into a casino, he should consider the odds placed against him at the blackjack table. That might discourage him from gambling in future.
It is difficult to discourage people from gambling; they become gambling addicts. I have seen that myself. I saw people buying 10p tickets at a tombola table at a fete although all the prizes had gone. When I asked what they were doing, they said "We enjoy the tombola so much; we know that there are no prizes. It is such fun pulling the tickets out, even though they are blank." When we deal with those situations, there are problems.
I do not favour an increase in the number of lotteries. Indeed, the way in which some small lotteries are now operated is most disturbing. It is essential to have greater control. There is no doubt that if those running a lottery in aid of a good cause wish to cheat and line their pockets while hiding under the umbrella of a worthy cause, they can do so without much difficulty.
I once attended the draw of a lottery. I was asked to press one of those machines that looked something like a miniature "Ernie". When the winning ticket came out everybody clapped and seemed quite delighted. I inquired who had won the prize and there was some hesitation in answering. After the organisers had looked through a number of papers I was told, to the surprise and amazement of the committee, that the winning ticket had not been sold. I started again and pressed the machine. It was on the fourth attempt that a winning ticket was drawn.
There is a tremendous advantage to those who run a lottery, draw out the prizes and publish the result in the local newspaper but have not sold winning tickets. That is something that has to be considered and dealt with quickly.
Most gamblers look for a large return on a small investment. A few pennies invested to win half a million pounds is always an attractive idea. It is for that reason that the football pools have been so successful and contribute so much to the Exchequer. Gambling on race horses often follows a similar pattern. A popular bet is with doubles, trebles and accumulators, which for a small sum of money can produce a large return. We have learnt about that by watching the ITV Seven and the BBC equivalent every Saturday when, for a 10p stake, a punter—never in my part of the world—can win £60,000 or £70,000. I find that it is difficult enough to back one winner let alone seven winners on the trot.
The gambling public has always enjoyed bets like the Yankee, the Patent and the Heinz, which yield a large return for a small investment. In other countries there is not the same system of betting on race horses because they do not have the same position that we have with bookmakers' odds. There is no opportunity for football pool investment in many countries and the public has turned to lotteries. However, in this country there are enough opportunities to win large sums for a small investment without trying to delve further into the national lottery set-up.
In 1977, betting duty from football pools amounted to about £103 million. It is a simple way of collecting tax. National lotteries would probably reduce the football pools' turnover. Although additional revenue would be raised, it is unlikely that a national lottery would have the same success as it enjoys in countries that do not have football pools.
I accept the recommendation that some of the profits on football pools should be channelled into the football industry itself. We must examine carefully the limits on football pools.
I accept the hon. Gentleman's argument that more of the profits should be returned to the football industry. Last year £3½ million from the Pool Promoters' Association went to the football clubs through the Football Grounds Improvement Trust.
It is rather like the levy in the racing industry. It is a small proportion for the enormous turnover and the tremendous advantages and profits made by the football pools.
Does the hon. Gentleman accept that there is a distinct possibility that if there were now a national lottery the main impact might be not on the football pools but on smaller lotteries, many of which contribute to charitable causes?
I accept that point, and we shall have to consider that problem carefully. There are plenty of opportunities for gambling without broadening them any further.
I turn to the recommendation dealing with horse racing. We could easily have a debate dealing only with that section of the Royal Commission's report. We all agree that it is important that the administration of the racing industry should be streamlined. It is important that those employed within the industry should have a greater say. It must be recognised that in recent years the Levy Board has achieved a great deal. The Jockey Club has administered the racing industry successfully over many years. For those who have had the advantage of racing in other parts of the world the rules, security and the fair way in which the industry operates in this country are an example to many other countries.
There always has been and always will be criticism of how the Jockey Club is elected. It must be recognised that in the past it has done an excellent job. The racing industry, unlike its counterparts in other countries, suffers from the Exchequer taking too much out of the industry. Too little is left to develop and improve the facilities for the general public and the returns for those working in the racing industry.
Money staked in off-course betting in 1976 was £1,860 million. The tax taken was £140 million. Figures for on-course betting were £275 million invested and £11 million tax taken. The Chancellor of the Exchequer benefited to the tune of £150 million in 1976 and the Levy Board received £9·7 million to spend on the industry. In those circumstances, it is hardly surprising that facilities for the general public on racecourses have not been improved sufficiently, and that racecourse attendances have been sliding.
In 1966 over 5 million attended the races with an average of 6,500 per meeting. That figure dropped to just over 4 million in 1976, with an average attendance of 4,700 at each meeting. At one racecourse in my part of the country the average attendance of paid-up members on six days' racing was 603. I do not make a plea for the owners because they can opt to train in Ireland and France. My plea is for those employed in the industry—for example, the trainers, the stable lads and the ancillary trades associated with the industry. Those are the categories that will suffer unless the Minister acts.
Lord Rothschild's recommendation is clear. He states:
VAT on foal and yearling purchases, on the transfer of a home bred yearling from stud to training and on the importation of horses from abroad should be abolished.
I hope that the Government will take note of that recommendation.
I return to the difficult position of the Levy Board. As both Front Bench speakers have said, it is essential to get a small, simple piece of legislation through the House. We must recognise that from 1961 to 1978 the Levy Board spent £84 million on racing. Of that sum £74 million was provided by bookmakers, about £7½ million by the Tote and £2 million from other sources. There has been an allocation of £36 million for prize money and race horse transport, £16 million for the assistance of racecourses, £6 million on racecourse security, £3 million for breeding and veterinary science and £1¼ million to the racing industry's labour force.
We cannot rely on the bookmakers to pay if they do not wish to do so. The present situation is ridiculous. The bookmakers do not have to pay until the end of the year. As the bookmakers' committee has agreed, and as the whole industry seems to have agreed, it would be quite improper for the Levy Board to use its resources during next year to have bridging loans and to put its money into the industry so that bookmakers—the few who wished to—could take the interest on the tax that they had collected, which they would pass on to the Government at the end of the year. If time cannot be found in this place, possibly a Bill could be introduced in another place and subsequently brought to us. Surely it would not be in the interests of either side of the House to delay it in any way.
One of the contentious parts of the Royal Commission's report is that which deals with Sunday racing. I fully support the idea that we should establish a special inquiry to examine and report on Sunday sport.
I shall make one or two remarks about the need to improve the administrative structure of British horse racing. One of the great achievements of the Royal Commission has been to get all sections of the racing industry to talk. We find ourselves in a rather unusual position. For once nearly all sections of the industry are in full agreement.
I have always believed that the Levy Board, which is answerable to Parliament as a statutory body, should remain. However, I am convinced that the time has come when those involved in the industry and ancillary industries—for example, trainers, racecourse associations, breeders and jockeys—should have a greater say in how the money should best be spent. I welcome the agreement that has been reached, that an independent advisory body should be established with an independent part-time chairman with a seat on the Levy Board and an independent secretariat financed by the Levy Board with a largish council and a small executive committee. The independent advisory body could make proposals to the Levy Board on many different aspects of the industry. That would give a much greater opportunity to all those within the industry to have their views and opinions considered.
That body would undoubtedly take some powers away from the Jockey Club. However, I am impressed that it has accepted that recommendation and is prepared to give it a fair wind.
I am grateful to Lord Rothschild and his committee for giving us so much to consider. We owe it to him and the Commission to act on many of the proposals. Some proposals can be implemented without legislation, but some legislation will be necessary.
In 1963 the Betting, Gaming and Lotteries Act 1963 made an attempt to improve many aspects of gaming and betting. Some 17 years later we must update that legislation. We cannot sit back and pretend that all is well. We owe it to our constituents—94 per cent. of them, as the Royal Commission states—to bring matters up to date. I hope that my right hon. Friend will act on many of the recommendations and bring forward the necessary legislation.
In 1976 I gave up my job as Government Chief Whip. I found that I had some spare time and I became a member of the all-party racing committee. All my life I have been intrigued by, and interested in, horse racing. It is the most wonderful sport in the world. I know of nothing more exciting than the last Air-long of any race, especially if one has a horse that is among those coming up to the post. Of course, if one has not, it can be the most frustrating experience in the world. For me horse racing means great excitement and a great thrill.
I became a member of the all-party committee although I did not have any special knowledge of its work or what it was doing. I wanted to become involved. I pay tribute to the hon. Member for Richmond, Yorks (Sir T. Kitson). I quickly learnt of his outstanding personal knowledge. His industry and work within the committee has been of great credit. I speak as a humble vice-chairman who does not do very much. The hon. Gentleman has done a first-class job.
As a result of my membership of the committee I have come to know some of those who run racing. I am typical of my kind. I dare say that some of my views about the Jockey Club are not shared by many hon. Members, especially Opposition Members. I thought that the Jockey Club was about the most terrifying and appalling reactionary shower that ever lived. I thought that it represented those who were utterly remote. I considered that its members had jobs only because they were aristocrats. What the heck they were doing in horse racing I could not understand.
When I became a member of the all-party committee I came to know fairly well the Jockey Club and the individuals in it. It is always a good thing to admit one's faults and mistakes in the House. I made a grievous mistake about the Jockey Club. Its members are men of great integrity.
I met only the men. They are outstanding. They are men of great integrity. It is a fact that every jockey, every trainer, every race horse owner and certainly every bookmaker I have met is terrified of the Jockey Club. It is known that it is impartial and strict. It is known that it deals ruthlessly with any jockey, no matter how famous he may be, if he is guilty of any sort of transgression. Its reputation is one that I want to sustain. To that extent, my membership of the all-party racing committee has done me a great deal of good. I have learnt by experience and not by rumour.
The report does its authors great credit. It is extremely well written and most lucid. I am delighted that the Jockey Club has willingly decided to come into the orbit of the sport and to play its part. It may be that I have moved from one extreme to the other, but I want nothing done at any time that will alter the disciplinary powers of the Jockey Club. I want no one in the racing world to believe that it is "get-at-able". I want it to maintain its strength. I want those in the industry to be not only afraid of it but to have enormous respect for it. No matter how big a bookmaker's business may be, the one body that he is terrified of is the Jockey Club. I am delighted that it has come into the advisory council and that it will play its part. I am glad to have the opportunity to demonstrate how views can change.
When we last discussed racing in the House we concentrated on the question of VAT on the horse. When we raised that issue some of my hon. Friends made the accusation that those who took part in the discussion did not give a damn about, for example, the mentally handicapped and the sick. We were accused of being concerned only with bloodstock. It was not until long afterwards that I realised what the accusers had said and the implications of their words. The only way in which we were able to talk about the wretched subject was to table a specific amendment. If we had not done so, the Chair would not have allowed the debate to take place. The amendment was taken in its proper turn.
It was said on that occasion—obviously we did not make it sufficiently clear— that no one in the racing industry was asking for the abolition of VAT. What was said was this. If we are members of the Common Market—and having voted for it I do not know why we are members, for all the advantages that we are getting out of it—how is it that we allow France and Ireland, two of our main colleagues and friends in the Common Market, to get away with absolute murder, and not pay VAT? In the case of Ireland, I do not understand that at all. Some are using the word "harmonisation". We were given assurance by the previous Government—I know the present Government are not committed, but on a matter such as this it was an all-party agreement—that efforts would be made through the Common Market, and I should like to know the position today.
I believe strongly that there should be Sunday racing. Believe it or not, I go to church on Sunday, but I belong to a Church which believes that once people have been to mass they can then do what they like—up to a point. We say that what people do on Sunday is their own business. If people want to go racing, or if they want to stay at home all day, let them do so. It is objectionable that laws which have been out of date for a long, long time can still stop me from going racing on a Sunday if I wish to do so. It is ironic that, if I had a lot of money, I could fly to France and watch horse racing there. I still argue, therefore, that there is a good case to be made for Sunday sport, and I hope that one day some Government will have sufficient courage to legalise it.
I share the view of the hon. Member for Richmond, Yorks that there is a lot to be said for a relief on the levy on on-course betting. There are some elements in this country—and in the bookmaking world in particular—who believe that racing is for their benefit alone. These are people who sit on their fat bottoms and make a fortune from racing. They never own horses, never attend the races, and do not do anything for the industry except that which they are compelled to do by the law of the land. Some do not even want to do that, and they dodge paying the levy. It is time that somebody explained to those characters that horse-racing is not purely for their delight and pleasure. No other country allows bookmakers to get such a rake-off. Some argue that if it were not for the bookmakers horse racing would be a very sad sport. I concede that there is much to be said for the on-course bookmaker who brings colour to racing, but that has nothing to do with the off-course bookmaker. What colour is there in going to a betting shop?
Encouragement should be given to people who attend horse races. The amount taken away from the Treasury would be infinitesimal, so why not encourage the reduction of on-course tax? I believe that, if it were to be reduced, far more people would go to the races, that there would be greater attendances, and that the Tote on the course would benefit.
The advisory committee which has now been agreed can only be a good thing. I want the Betting Levy Board—the body that collects the money—also to retain its present position. I hope that something will be done about the proposed legislation to ensure that the levy is collected each year. As one who has had much experience of how this House operates, I know that it is not difficult to get assurances. What is important is the good will engendered between each side of the House. Surely no one would want to row about a small amendment, and I beg the Government to do something about it.
I turn now to football. I am very proud to be a supporter of a third division football club, Millwall. Some of its supporters—I am not among them—have the reputation of being very rough and tough and of causing a lot of trouble, but that applies to only a very small fraction of them. It is a club of great honour and integrity and needs all the help it can get. If it were not for clubs such as Millwall, and others in the second and, indeed, the fourth division, there would be no first division. If we reach a position where, for financial reasons, some of the smaller clubs are forced to drop out, it will be a very sad day for British football.
For this reason, I am very keen on what I call pools for football clubs. A board should be established for the purpose of administering the moneys arising from lotteries of this kind set up in order to help football. My right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) is an expert on football, and when he was the Minister concerned with sport he did all he could to encourage the distribution of money to football clubs. He will be able to give figures of the money distributed to smaller clubs. I repeat, Mr. Deputy Speaker, that unless something is done for the smaller clubs there will be no future for football. There are many people who watch football on television and do not go to matches, and there is much to be said in favour of looking into that aspect.
The football pool promoters are extremely efficient people. Millions of coupons are sent out by them each week and millions of prizes are paid. I dread to think that any Government would be barmy enough to take the football pools into State ownership. I do not know what would happen if any other body were to run the football pools. If the Government want more money out of the football pools, they have only to increase the taxes. There is no need to change the machine. I am all for leaving the football pools as they are.
One of the subjects that I hope to touch upon, Mr. Deputy Speaker, if I catch your eye, is the inequitable distribution of betting duty, mentioned by the Royal Commission. Football pools pay 40 per cent., as against the 5 per cent. paid by bingo operators. There is absolutely no logic in that. It cannot be right that if my right hon. Friend invests £1 in a football pool 40p of his pound goes to the Exchequer, whereas if his wife invests £1 at the bingo hall only 5p goes to the Exchequer, I hope, therefore, that he will be very careful before suggesting to the Treasury that there should be any further increases of tax on football pools.
I was not suggesting that there should be. The point that I was seeking to make is that there are maniacs on the Opposition Bench who think in terms of State ownership of everything. They want to know why Littlewoods and the other football promoters should not be Stateowned. My answer to them is that there is no point in State ownership of something that is efficient. The football pool promoters send out millions of envelopes every week, and they do it most efficiently. If the Government want more money from them, they can increase the levy. I agree with my right hon. Friend that at the moment the taxation position is crazy. I cannot understand why the levy on the pools should be at 40p in the pound. I do not think that those who bet on football pools realise the enormous sum of money that is being paid to the Treasury by the pools.
The Royal Commission suggested that 3 per cent. of the stakes on the pools—about £7 million—should go to help the game of football, and there is much to be said in favour of that suggestion. The smaller clubs, such as my own club, Mill-wall, are getting gates of 5,000, 6,000 or 7,000 spectators, and are not paying their way. A club that has worked hard to bring youngsters forward finds itself in a financial plight and the big boys come along and buy them off. That is the end of that, and the club has no future. But to give such a club substantial help every year out of the money which is betted on football would be a fair and honourable thing.
The Royal Commission said that a football board should be set up to administer the £7 million provided to help football. That idea appeals to me and I shall listen to what my right hon. Friend the Member for Birmingham, Small Heath, says about that.
I have never been in a casino in my life, though that fact does not make me a good chap. I do not want to go into casinos. I am not the lucky type. If I want to bet, I will bet on something that I can see such as a horse, though most of the horses I have bet on in the past have been so far back that I could not see them either. I would not want to bet in casinos and lose so much money so quickly. The Royal Commission says that there should be a casino general betting levy of 7½ per cent. The hon. Member for Richmond, Yorks queries whether that should be done. I am certain of one thing. There is not one member of the British public, except those who run the casinos, who would not welcome a stiff, belting tax on casinos. Those who can afford to go into casinos can afford to pay right up to the hilt.
As for the foreign gamblers, I am distressed for them—distressed that poor Arab magnates might have to pay these very large sums. I would belt those foreigners as they arrived at the casino. I would get every penny I could out of them. Why the Government, and the Opposition, do not say this openly I do not know so I say it for both sides of the House. Let us "do" the casinos and tax them as stringently as possible. If they scream for mercy, there is only one answer. They can shut up shop and go home. That would not be a bad thing. If every casino was shut down it would probably do Britain a deal of good. It would mean that the casino characters would then be able to spend more money on honest activities such as racing.
Is my right hon. Friend aware that he is in real danger now? I can imagine that tomorrow morning he will have piles of invitations from every casino in London. He is putting himself in the position where, by saying that he will not go to a casino, he will be compelled to go. That would be a situation well worth levying.
I do not do things I do not want to do and one of them is going to a casino. I am able to go; I would go with friends who are members, but casinos do not interest me. I was told by friends recently that some Greek shipping magnates went to a casino at 11 o'clock one evening and at 4 o'clock the next morning they left having lost £185,000. I find that absolutely immoral. It is nauseating. I know it was their money, but does the House realise that we could build an old people's home for that amount? Losing that amount of money is disgusting. It is not right: it is not what gambling is about. For that reason, casinos do not appeal to me. It is monstrous that £185,000 can be lost in a few hours: it is awful and it demonstrates the grave inequality of wealth. If money of that kind is flung around in that way, one can understand why there are revolutionaries and people out to make a lot of trouble. It sickens one that the system helps such activities along. That kind of money would save St. Olave's hospital, which is in some trouble at the moment.
I welcome the Royal Commission. The Government are on the right path with the advisory council for horse racing. I hope and believe that they will ensure that the present statutory bodies carry on with their essential job. It is right that they should get together and I hope that when those bodies express a view the Government will listen to them. I am not sure that the Home Office has the staff qualified to know what it is all about—I have never been convinced of that—but I welcome the report.
The right hon. Member for Bermondsey (Mr. Mellish) has delighted the House not only with his interesting points but by the entertaining way in which he makes them. I will not comment on each of his arguments, because I want to restrict my remarks to lotteries, that being one aspect of the report with which I have been involved for a considerable time.
I refer first to the recommendation on page 227 of the report—
We conclude that there should be a single national lottery for good causes run by a National Lottery Board. … The good causes to benefit from the national lottery should not be defined in terms of organisations but in terms of objectives which should be:
By the Lotteries Act 1975, codified in the Lotteries and Amusements Act 1976. Parliament approved the setting up of lotteries by societies and local authorities for that very purpose. In section 5 of the 1976 Act a society's lottery is defined as a lottery "wholly or mainly" for:
When the Act came into force in 1977, local authorities were allowed to:
promote a local lottery for any purpose for which they have power to incur expenditure under any enactment …".
We are therefore already providing, by means of these societies' and local authority lotteries, the money which might come in a larger central sum from a national lottery. We may not have got the
rules for them right, but they are there and they have had considerable success.
A dozen years ago I presented a national Sweepstakes Bill to the House. That was intended to save the Grand National at the time when Mrs. Mirabelle Topham was threatening to sell the Aintree racecourse for development. I thought it was a pretty good cause. We have used national lotteries to help to get slaves out of Tunisia, for building Westminster Bridge, and for starting the British Museum. So why, I thought, should we not raise money in that way to save the Grand National? The House did not agree with me although the Bill was debated. It suffered the fate of most Private Members' Bills.
In 1968 I introduced a National Lottery Bill and that received a Second Reading. It would have established a national lottery to be run by private enterprise, but the right hon. Member for Cardiff, South-East (Mr. Callaghan), the then Chancellor of the Exchequer, wanted to nationalise the whole thing. He put a clause into the Finance Bill of 1968 which would have authorised the Treasury to run a national lottery. It was quite obvious that the proceeds from that would go straight to the Exchequer in relief of general taxation. It was very unpopular in the House and was thrown out. That, I thought, was the end of national lotteries. But the concept was revived by the report of the Royal Commission. Events have moved along since then; not only since 1968, but even since the Royal Commission studied this question.
The Commission, according to its report, based its comments on society and local authority lotteries on a survey which it asked should be undertaken. That survey was undertaken in the first quarter of 1977. Society and local authority lotteries were legalised only on 1 May 1977, so the survey was before local authorities had the legal right to run lotteries and before the new form of society lotteries under the 1976 Act.
The 1976 legislation came about because I had been a little more successful than previously with a Private Member's Bill. In the parliamentary lottery in 1974 I came out top of the list and my Bill to give local authorities power to run lotteries at a limit of £6 million a year passed through the House and was defeated only in the Lords. There was then a general election. I do not know what the odds against me were, but I came out second in the parliamentary lottery on that occasion, so I presented the Bill again.
At that stage the Government thought that it would be a good idea to take over the Bill. Unfortunately, they reduced the limit for local authorities from the £6 million a year that I had in mind to about £½ million—£520,000—a year, which I consider totally inadequate to run these lotteries economically. Even so, at that figure the society and local authority lotteries have been successful.
No matter what the Royal Commission may say about those abusing the system, there are rogues in all forms of gambling and gaming, and there are no more in this new system of lotteries than in any other gaming or gambling.
The Gaming Board's report for 1978, which is later than the Royal Commission's report, states that
it is clear that lotteries developed into being one of the major areas of gambling in Great Britain in 1978.
The board gives the figures for society and local authority lotteries. For the first year—from May 1977 to April 1978—society lotteries contributed over £4 million to good causes and local authority lotteries contributed over £8 million. That was in the first year before the majority had even got started.
In the following six months society lotteries were contributing to good causes at the rate of £24 million a year and local authority lotteries £36 million a year. That is a substantial sum in the first full year of the new types of lotteries. Sums from these sources devoted to good causes have undoubtedly increased since then.
If a national lottery were set up, it would be extremely damaging—indeed, it would kill off—both the society lotteries authorised by the 1975 legislation and the local authority lotteries. A national lottery sold through the same outlets—retail shops—probably at a similar price of 25p a ticket and offering giant prizes would undoubtedly ruin the whole system of society lotteries upon which football clubs and charities have now come to rely and survive. A national lottery would undoubtedly stifle local authority lotteries which have brought great benefits and amenities to different districts. Tickets for the monthly lottery run by my local authority are always fully sold and the proceeds have been devoted to many charities and useful amenities in the district.
As I said, there has been abuse in certain areas. My right hon. Friend the Home Secretary said that we did not get it right on the first occasion. I disclaim any blame for that. The Bill was taken out of my hands by the then Labour Government. Its form may need some amendment. Certainly the regulations need some amending. It took the Home Office two years to produce those regulations, and when it did produce them, it gave birth to a canary. Those regulations certainly did not control the lotteries as they should have been controlled.
For example, I agree that there should be prohibition of winning tickets and other tickets being delivered in separate bundles to the promoters. That is a simple matter which should be prevented. There should be prohibition of certain instant bingo tickets being sold in shops and stores—tickets which appear to have nothing whatever to do with charities, sport, or anything of that kind, but are rather like Green Shield stamps. This connection with commercial undertakings should be cut off completely. It was not what we envisaged in the legislation.
Such matters can be corrected by a short amending Act, by well drafted regulations and enforcement by the police—not private police run by the Gaming Board. To a great extent, these faults and abuses have already been corrected, particularly by the local authorities themselves.
I have here a code of conduct for running lotteries which will be produced by the local authority associations. I also have a copy of the agreement between the Greater London Council and Little-woods Lotteries Ltd. which covers all these points. I am currently involved in meetings with a number of those involved—printers, managing agents, local authorities and charities—to form a universal code of conduct of this kind which will apply to local authorities, societies and charities, and generally in the operation of society and local authority lotteries. Much can be done by a code.
I believe that 99 per cent. of dealers—whether local authorities, managing agents or charities—run their lotteries honestly and blamelessly. They will be only too happy to stop the rogues in the trade. We should encourage those societies and local authorities by increasing the limits of the proceeds and prizes—not the £520,000 now allowed, but at least 10 times that amount—to make the running of the lotteries economical and worth while. That would be far better than to set up a national lottery board—as my right hon. Friend said, yet another quango—which would be not only disastrous to the local authorities and societies, but extremely damaging to the pools. The right hon. Member for Leeds, South (Mr. Rees) said that the pools already exist as a strong body, extremely efficiently run—and socially harmless, I should have thought. They raise money which goes in the form of pool betting duty to the Exchequer in substantial amounts, due to a tax of 40 per cent.
Perhaps I am putting it in strong words, but how the Royal Commission had the audacity to suggest setting up, in competition with the pools, a national lottery on which the tax would be only 10 per cent. I do not know. It seems grossly unfair. The Commission seems to have a passion for a national lottery as against the pools and local lotteries. It would be crazy to damage a market now tapped by the pools and producing such a substantial amount for the Exchequer.
If a national lottery were set up, it would be battling to gain a footing in a market where public loyalty, habit and high reputation have given the pools a stronghold. After a time the national lottery would, I think, encroach on the takings of the pools to the extent of about 25 per cent. I see the hon. Member for Cannock (Mr. Roberts) is shaking his head. It is only a guess. The Royal Commission has said it would be over 13 per cent., but I think that it would be more.
Even if the amount a national lottery took from the pools were only 13 per cent., that would cause unemployment in my constituency. A great number of my constituents are employed by Littlewoods or Vernons. Possibly it is the same in other areas where large pools companies employ people throughout the year—which is an important fact. At one time the companies cast off that employment during the summer.
I come to the conclusion, therefore, that we should scrap the idea of a national lottery, that we should tighten up in the running of society and local authority lotteries, and in return we should increase the limits of money which those lotteries can raise—and have raised—for good causes. In short, let us invest in success and not nationalise it.
I am one of two honorary secretaries of the House of Commons all-party committee on racing. In fairness, I should say that the remarks I shall make this evening are personal and have nothing to do with the views expressed from time to time by the committee. So far this debate has been non-controversial with general agreement on the main issues in the report of the Royal Commission. I want to concentrate my remarks on chapter 9, volume 1 of the report, dealing with the horse racing industry. I do not want to go over the ground already covered, but I have some points to make which I think will certainly help the debate, and arouse some discussion and, I hope, controversy.
There is no doubt that horse racing is a great spectator sport which is shared by all members of the community who get great pleasure from attending race meetings. A large part of the report is devoted to this subject, and so it should be. Over 40 per cent. of the revenue from gaming obtained by the Treasury comes from gambling on horse racing. It is a sad reflection that most of the betting that takes place does not occur on the racecourse but in betting shops. The figures show that about 7 per cent. of betting occurs on the racecourse and over 90 per cent. through betting shops and off-course bookmakers. This is an area that must be looked at carefully. We must try to encourage people back to the racecourses and out of the betting shops.
One of the reasons for those figures is the wide coverage given to racing by television. Betting shops also have a commentary to enable people to follow their betting choice without going to the racecourse. I believe that this is wrong. Somewhere along the line we have to find an answer to this problem, and I am amazed that in a report in which the Royal Commission has done such a splendid job it has glossed over this.
I suggest that there are three ways in which we might help, and one of them has already been touched upon. First, we should remove the on-course betting tax. This would certainly encourage punters to attend race meetings. There is no question about that. If people know they are to have their winnings without tax they will return to racing.
Second, there must clearly be considerable improvement in spectator facilities. Some of the general facilities at racecourses throughout the country—particularly in bad weather—are an absolute disgrace.
Third, I follow the argument touched on by several hon. Gentlemen this evening about Sunday racing. I believe that this is vital if we are to get large crowds flocking back to racing. The Royal Commission has ducked this issue and has suggested setting up some form of inquiry or another committee. We all know what happens with inquiries and committees: they take a great deal of time. With a controversial issue of this kind, there are bound to be no conclusions at all. I should have thought that the Commission could have arrived at some decision on this matter and could have given a lead to the nation, the Home Secretary and the sport generally.
We know that at present there are one-day cricket matches. I am sure that some gambling goes on at those meetings—in fact I know it does, because I have attended them. In addition, there is motor racing and show jumping on a Sunday. On the Continent, of course, all the big races, such as the Arc de Triomphe, take place on a Sunday. Does anyone suggest that our colleagues in France, Italy, Scandinavia and Germany are less religious than ourselves? It is time we faced this particular issue and did not run away from the consequences.
Sunday afternoon racing would attract large crowds back to the racecourse. A man would take his wife and family out to the races on a Sunday afternoon as he does on a bank holiday. One only has to see the bank holiday crowds at small race meetings; the attendance is trebled as compared with a normal meeting. This is clearly one way to get people back to the racecourse.
I am aware that one of the major objections is that this might mean opening the betting shops. I do not think that that is necessary, and it would be another reason why people would go to the race meetings. If they felt they had to go to the course if they wished to have a bet, they would be more likely to attend than they are at present.
The charge may be made that this could mean some form of illegal betting. I do not see that. That is an unnecessary worry. I hope that the committee which will be set up—unfortunately it appears it will be set up—will get cracking on this subject. I believe it could be the shot in the arm that racing needs, to get people out of the betting shops and back on to the racecourse. I repeat the figures that I mentioned earlier; about 7 per cent. of betting takes place on the course and over 90 per cent. in the betting shops, which indicates that something is seriously wrong.
There have been recent improvements in the way in which racing is controlled. That has given the industry a better name than it had 25 or 30 years ago. I applaud overnight declarations and draws which are vital to certain racecourses. There is no change at all if the wrong draw is declared at Chester, for example.
Starting stalls are a more effective method than that used before. These days the racecourse is used less often for the training of horses. That training does go on but not as much as before. There is less pulling of horses because a camera control keeps a close watch.
Consideration must be given to the appointment of full-time stewards, particularly at local courses. There are professional starters and professional judges. In between, those who interpret and administer the laws of racing are local amateurs. Frankly, some of their decisions are appalling. They make ghastly mistakes and bring racing into disrepute. I attended a jumping meeting the other day and saw a horse clearly interfere with other horses as he came over the last fence. That horse was allowed to keep the race which deprived the owners of the other horses of their place money. The local stewards interpreted the rules to suit their book.
I may be being a little unfair because I am sure that most stewards are honourable men. However, the first thing that some people do when they buy a race card is to see if any of the local stewards have a horse running that day because they believe that such a horse will have a special chance of winning. It is probably grossly unfair to say that but I know that that is what happens. The Jockey Club should consider appointing full-time stewards. They could be attached to a circuit covering the whole of the South of England or the whole of the North. Such an arrangement would lead to fewer ghastly mistakes.
I turn to the section of the report dealing with the general administration and overall planning of the sport. The Royal Commission paid particular attention to the way in which the sport is administered. It recommended the setting up of a racing authority. The Home Secretary, in his wisdom, has decided that such an authority should not be established. That is a mistake. This was an opportunity for the Home Secretary to take hold of the problem and do something about it. This was an opportunity to amalgamate the work of the Jockey Club and the Horse-race Betting Levy Board in the interests of the racing industry. I am sure that the decision will not be changed in spite of all the words against it. Many people are disappointed that such an authority is not to be established.
The Royal Commission was explicit in its recommendation for such an authority but the racing industry, including the Jockey Club, suggested that there should be an advisory council. Legislation is improbable before 1981. By then we shall have had the opportunity to study the work of that council. If it is not successful there will be ample time for the House to ensure that there is a statutory authority.
I was about to refer to that suggestion. I understand that an advisory body will begin operating at the beginning of next year. All sections of the industry will be represented on that body, including the stable lads and jockeys. However, the objective should be to set up an authority for the industry. I agree that if the advisory body fails the House can re-examine the situation. I hope that the Home Secretary will bear that in mind. I hope that he will keep a close watch on the new body to ensure that it is effective. The only bodies which really welcome the setting up of the advisory council are the Jockey Club and the Levy Board. They approve of it because it does not interfere with the present set-up.
I have some experience of consultative councils in another connection. They are talking shops. Little comes of them and they have few powers. They can make recommendations but that is all. Under such a scheme the Jockey Club will remain all-powerful. It will exercise the same controls as it has in the past. This is a cosmetic exercise about which the Jockey Club is pleased.
I do not attack the Jockey Club, but it must be prepared to change. In recent years it has shown that it is prepared to change. It is more democratic in its approach to some problems. In a speech last week the senior steward said that the Jockey Club was not concerned with self-interest and that it had no axe to grind other than the well-being of the sport. I agree, but the club is still regarded as a special club for Old Etonians, the military and others who have attended certain schools and have privileged backgrounds. I wonder why there are no rear-admirals or air vice-marshals in the Jockey Club. What is so special about the Army?
The Jockey Club must examine its procedures and open its doors. It must tell the racing industry the criterion for becoming a member. What are the qualifications for membership?
The Jockey Club is a special body which is self-appointed and self-elected. It has an autocratic power over the industry. I accept that it has done a splendid job and that it has no axe to grind. However, it must be prepared to democratise. If it does not move with the times a racing council will be established to amalgamate the interests to which I have referred. It is in the Jockey Club's interest to take that into account.
So far the debate has been non-controversial. I hope that the points I have raised will not be taken in the wrong way. I have tried to be constructive in the suggestions that I have made. All sorts of other ideas have been put forward, particularly in regard to the raising of the levy. I am pleased that the Home Secretary is prepared to give some sort of assurance that amending legislation will be brought forward. I know that there is some minor doubt about this, but I believe that a way will be found because it is an important issue which must be seen to be fair to all sections of the bookmaking industry. Some bookmakers play the game and pay early. Others leave it and have to be chased. Under the voluntary method that operates at present they are not even forced to pay their share of the levy. That is something that must be dealt with.
The bloodstock industry is being treated grossly unfairly. I hope that the representations of the Chancellor of the Exchequer to the Commission of the EEC in relation to harmonisation will be successful, because that will be of great help to the bloodstock industry.
I congratulate the Royal Commission on a magnificent job. The report is easy to understand, whereas so often reports of this sort are written in such a way that it takes a great deal of study to understand what they are driving at. I hope that the Home Secretary will take on board some of the points that have been raised, in which case the debate will have been a successful one.
I rise to make my maiden speech and to ask my right hon. Friend the Home Secretary whether he will give consideration to that aspect of the Royal Commission's proposals concerning the Pool Competitions Act 1971. In doing so, I am grateful that the tradition of the House affords me the opportunity of reminding hon. Members of my predecessors, Mr. Geoffrey Edge and Sir Harry d'Avigdor-Goldsmid—as he was known to his friends in the House—and of the area that they served.
Aldridge-Brownhills came into being as a consequence of the last report of the Boundary Commission. This coincided with the reshaping of local government which divorced our urban district from Staffordshire—an ancient connection which was regarded with pride—and united us as part of the metropolitan borough of Walsall within the West Midlands. I appreciate that this is not the time to reflect on those who reshaped the boundaries of local government and who, in breaking down old associations, often created a greater gulf between the elector and the now often more remote unit of local government. A metropolitan borough with its administration is a poor substitute for an urban district with its local character.
I mention this only because many of the decisions that affect the immediate character and vitality of Aldridge-Brownhills have passed from those who live there to whoever controls the metropolitan borough. That has not always been in the interests of my constituency. Aldridge-Brownhills has enjoyed a remarkable growth in the last quarter of a century, supported by the skills and vigour of many small to medium businesses on which, in common with many other hon. Members, I believe that the future prosperity of our country rests. This growth has been bedded in old communities belonging to our rural past, in the newer ones that owe their growth to the great industries of the last century and, now again, the new, dynamic, small firms that have prospered due to the skills and enterprise of their founders and the support and loyalty of their work forces.
With this tremendous growth there have come the problems of a community that does not always have the adequate infrastructure. Our roads are inadequate to serve our growth. We do not have a hospital to serve the 100,000 residents. Our hospitals are those of Walsall, our geriatric facilities those of Stafford.
For nearly 20 years the greater part of this constituency was served by Sir Harry d'Avigdor-Goldsmid, until his retirement in 1974. It was he who set our immediate standards of public service and assiduous constituency work. This was a tradition followed by my immediate predecessor, Mr. Geoffrey Edge, in relation to whose caring social work on behalf of Aldridge-Brownhills my own files bear testimony. I often reflect how little a candidate appreciates that the often personal constituency work which a good Member does is something that is a private matter which is not given to wide and general acceptance. It is, therefore, a great honour to be able to pay tribute to the work of Sir Harry and Geoffrey Edge.
I now move to the Pool Competitions Act 1971, which is really the purpose of my rising to speak. Under that Act certain charitable bodies, particularly medical ones, football clubs and cricket clubs were given the opportunity of organising pools that were in some way similar to a lottery, in that investors were allocated a series of numbers which each week were linked to specific sporting events. The sums raised in these pools have been substantial and many people have been employed as collectors and checkers. Apart from providing an opportunity to engage in speculation, these pools also provide an opportunity for the public to support particular charities and sporting clubs in the full knowledge that part of their money will go specifically to provide help for their favourite charity or sporting club.
In a written reply last Friday, my right hon. Friend the Home Secretary provided me with the information that between 1971 and 1978 about £26·8 million has been applied for the benefit of charities and sport, and that of this large sum £21·2 million went to charitable organisations and £5·6 million to sport. As my right hon. Friend has said, the Act was of limited duration and it has been continued by means of annual regulations. When, in June, such an order was introduced it was again made clear that the future of the Act was under review.
The Royal Commission's report recommended that the 1971 Act should be scrapped. Will the Government consider rejecting that recommendation? In the event that such an assurance cannot be given, can the House at least be told that before any such action the Government will ensure that other arrangements are made to enable the medical charities and sporting clubs to raise similar sums from the public? In addition, in view of the sums involved and the number of people employed, I hope that the Government will give a reasonable period of notice of their intention not to promote annual regulations.
Like many people, I wonder what the objection to these pools really is. I speak with diffidence on such matter as, like the hon. Member for Eccles (Mr. Carter-Jones), I have not as yet filled in a football coupon. However, as an interested spectator, certain arguments appear to be overwhelming. First, surely there is no great difference in principle now between the 1971 Act pools and the football pools, with which the Royal Commission appears to be happy. I appreciate that in the past it was argued that 1971 Act pools were a straight lottery, whereas football pools involved people sitting down each week and using skilled discernment and insight in determining which eight out of 55 football matches would result in score draws. Most of the big pools firms now give their investors the opportunity of submitting what is called "a standing entry". Under this standing entry, the pools investor collects the appropriate numbers on the first week of the season, sends a cheque payable to Vernons or some other company, whose computer checks the numbers each week and sends the investor a cheque for £300,000 tax free whenever appropriate. In short, the investor makes his decision once a year and not once a week. It is difficult to see how that could be construed as an exercise of skill and specialised sporting knowledge. Therefore, while there may have been a substantial difference between the two kinds of pools in the past, there is not now.
Secondly, it seems to me that the 1971 Act pools benefit those whom the football pools do not. For every pound invested in football pools, the beneficiaries are my very able right hon. and learned Friend the Chancellor of the Exchequer, the Post Office which sells the stamps and postal orders, the agents and checkers who have employment, the companies themselves and, of course, the lucky winners. In the case of the 1971 Act pools, with the single exception of the companies, all these groups benefit. But there is an additional group of beneficiaries which consist of the charities, such as the Spastics, cricket clubs such as Warwickshire county cricket club and supporters' and football clubs.
Thirdly, I am not aware of any enormous gap in the administrative expenses of 1971 Act pools and football pools. In fact, I am advised that the large and successful Rangers pools, run by Glasgow Rangers for themselves and certain other clubs, including Berwick Rangers, have administrative cost percentages lower than some of the football pools. Indeed, we were reminded of the benefits conferred on Berwick Rangers by the hon. Member for Berwick-upon-Tweed (Mr. Beith) in late June.
If there is to be gambling—I appreciate that there are strong moral arguments involved—it would seem to me that the 1971 Act pools are among the least harmful forms of gambling, and that they also produce a great deal of good, benefiting both those in need and sporting clubs which would otherwise face major financial problems. I therefore ask my right hon. Friend to give the Government's reaction to the proposals of the Royal Commission and to consider the points that I have raised.
As a Staffordshire Member of Parliament I am delighted to congratulate the hon. Member for Aldridge-Brownhills (Mr. Shepherd) on his maiden speech. I share the disappointment of any hon. Member whose constituency has been taken out of Staffordshire and put into Walsall. I knew Sir Harry d'Avigdor-Goldsmid and Mr. Geoffrey Edge, and both did good work in the House. I had the privilege of serving under Sir Harry on the Select Committee on Nationalised Industries and I was also a good friend of Geoffrey Edge. The hon. Member for Aldridge-Brownhills will have a difficult task in following them both, but when he spoke about charities and the 1971 Pool Competitions Act he showed that he may indeed be a worthy successor. His contribution was carefully prepared and eloquently presented, and we are delighted to welcome him to our debates.
I was surprised at the timid approach of the Home Secretary. The "Puritan party" still have a majority in Parliament, such has been the tenor of our debates. Speaking for those who enjoy gambling, and for the punters, I say to the Government, as I would to the Opposition Front Bench, that we do not want to be protected from ourselves. We want to be protected only from being cheated when we gamble. The State is too concerned to defend those of us who like to bet and to prevent us from so doing.
Replying to the Home Secretary, I say that we want to be able to bet whilst at a cricket match. With certain provisos, we want to be able to place our bets without well meaning people in government telling us that we cannot. I was interested in the comments of the Royal Commission—and the remarks of the Front Bench—concerning working men's clubs, miners' welfare clubs and Conservative clubs. I bet in working men's clubs, British Legion clubs, and miners' welfare clubs, as I play bingo, put money into one-armed bandits and buy raffle tickets. I do so not thinking that I am contributing to some giant Mafia, but knowing that I am making a contribution to the welfare of the particular club.
Ninety-nine point nine per cent. of our clubs are run honestly. The miners' welfare clubs, the working men's clubs, the British Legion clubs—I cannot speak for the Conservative clubs—are well run. However, they are dependent upon receipts from bingo, raffles and one-armed bandits for the assistance that they give to the aged, the treats they provide to kids, and the whole atmosphere of club life. The attitude of the Royal Commission fails to reflect the reality of club life, and I hope that no Government will arm policemen with warrants to go into those clubs.
I support the creation of the horse racing advisory council, and had Labour remained in Government, we should have adopted that same formula. The advisory council should be developed into a powerful body that can give advice to the Levy Board and the Jockey Club. I agree with the Levy Board that it is important that the chairman is not an existing member of the Jockey Club. It is essential to underline the independence of any new advisory council. I am not sure that I go as far as the Levy Board in saying that it would be wrong for an ex-member of the Jockey Club to take over the chairmanship. It would be wrong to make that exclusion, although it is important to have a chairman who is known to be independent.
As the Jockey Club acknowledges, there is a need to open up the control of racing. I agree with my hon. Friend the Member for Derby, South (Mr. Johnson) on that point, although I do not agree that there is a need for full-time stewards or that people should look to see if stewards have horses running. However, it would be in the interests of the Jockey Club to open up its ranks to people without great wealth and with different social backgrounds but who have wide experience of racing. That would not undermine the integrity of the Jockey Club. It would serve only to enhance its authority. The Jockey Club must avoid having its authority undermined because people outside see it as an exclusive group.
I was surprised to learn that the Race-goers Club, run by the Racing Information Bureau, will represent the punter on the new body as it did on the old. Numerically it is weaker than competing organisations such as the Daily Mirror Race-goers Club and it has ties with the Levy Board and the Jockey Club. I thought immediately of the Racing Information Bureau's other arm that gives "Wogan's Winners" on the radio in the morning. I recall that the Churches Council on Gambling once referred to Terry Wogan's programme as being a disincentive to punters, as he seldom tipped the winner. Some of us regard him as a mole planted in the BBC by some mysterious power of the bookmakers.
I take comfort from a letter written by Tony Fairbairn of the Racegoers Club to the effect that for all but a few days of the current season Wogan's selections have been showing a profit and he presents a good case for the independence of the Racegoers' Club from the Jockey Club and the Levy Board. It is important that we continue to look at and maintain the independent representation of the punter and of the racegoer. The two are not always identical. I say to my hon. Friend the Member for Derby, South that one reason for the difference between racegoers and those who bet in betting shops is the expense of travelling and entering the racecourse as well as the cost of gambling there. It is not surprising that the big crowds occur at holiday time because that is when people think that they have rather more money to spend.
The turnover is much greater on a racecourse than in a betting shop. The hon. Member for Richmond, Yorks (Sir T. Kitson) put his finger on the matter when he said that in this country, particularly among working-class people, we like the complicated bets—the "Yankees" and the "Heinzes". They are cheap, but, if the forecast comes up, a considerable sum can be won. On a racecouse, such multiple bets are expensive, so people tend to bet differently from their betting in betting shops. In order to attract more people to the racecourse, it is not only necessary to build better shelter from rain, snow and wind, but an effort must be made to ensure that people can gamble in the same way as they could on the factory floor, in the clubs and in the betting shops.
This year has been a bad year for punters in two respects. Every year is. As the Royal Commission points out, we always lose money to the bookmakers and the Tote. There is at present a cloud over the Tote, but the Government have responded to the request for an inquiry into a particular incident, so I shall say no more on that. However, there is also a cloud over the bookmakers. They are under no legal obligation, as has been demonstrated in the past few weeks, to pay a punter when he has won. That is wrong. It may be all right for a bookmaker to so hedge himself round with rules that it is difficult for a punter to win large sums, and, although it may have been all right for the law to be neutral on gambling winnings when gambling was illegal, that is not so now. If a bookmaker decides to withold a punter's winnings, won fairly, according to rule, it is impossible for the punter to recover them, and the Government should act to make sure that bookmakers are forced to meet their gambling debts.
The Government should introduce brief legislation this Session to deal with the payment of the levy, which comes from the punter and not from the bookmaker. It is wrong for certain bookmakers to hold on to punters' money, drawing interest on it. They should pay it to the Levy Board to be used in the interests of racing. The amending legislation should be introduced quickly to ensure equity in the payment of the levy this year.
I wish the Home Office well in its deliberations on the report, and I hope that it will take a tolerant attitude to all of us who like to bet.
In this field, nothing makes the Home Office more popular than action—and I speak from a good many years experience. When it introduced gaming legislation and betting legislation, it became popular. I join the hon. Member for Newcastle-under-Lyme (Mr. Golding) in hoping for early action. The nub of my speech will be to show how a great deal of that action can be taken without legislation, and my proposals are highly practical.
On any view, the Royal Commission's report is a brilliant, all-embracing account of gambling in Britain. Many of the recommendations show great professional expertise, are penerating and correct, and should be adopted. I criticise the report only where it enters the field of political decision.
The doyen of lotteries, my right hon. Friend the Member for Crosby (Mr. Page), is sitting behind me. Any hon. Member who can come first in the ballot one year and second the next for two lotteries Bills, and manages to introduce the measures with his immense knowledge of lotteries, should be listened to, and I am sure that he will be.
We have had expertise all the way through. My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) has just made his maiden speech, and his exposition was lucid and clear. Had he been with us, Sir Henry d'Avigdor-Goldsmid would also have shown his considerable knowledge of economics and of horse racing. That knowledge is almost as good as that of his brother Jack who, having left the House, is to be found every day on almost every racecourse.
We have also heard from my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson), who delivered a careful and valuable analysis of horse racing. We have had other able speeches from the right hon. Member for Bermondsey (Mr. Mellish) and the hon. Member for Derby, South (Mr. Johnson). Some years ago I preceded my hon. Friend the Member for Richmond, Yorks as chairman on the committee on horse racing, and I am still closely associated with the racing world and more particularly the Racecourse Association.
The horse race advisory council is a splendid idea, but we should endeavour to move forward by voluntary agreement. That is so much better. It is far better to hold the whip aloft, as Lester Piggott often does, over the heads of the Jockey Club and the racing industry that if they do not get on with the job a statutory racing body will be imposed by Parliament.
Unfortunately, the horse racing industry has many factions that tend to disagree. That is of the nature of the great independence of the industry. Nevertheless, it is going great guns at present and, with whip raised, I hope that it will come home with the horse past the post and we shall not have to do the job for the industry.
To a large extent, the abuses of lotteries can be dealt with by regulation under existing powers. Where that is not so, the Home Office should get to work on the associations to get them to draw up a voluntary code. That voluntary code is not really voluntary, because if one does not carry it out one will not be employed by the local authorities, and that will knock out the whole advantage of being an agent.
I am entirely in favour of the recommendation of the Rothschild Commission to get rid of all "external lottery managers." I do not think that Ladbroke or any others should be allowed to operate in the field as external managers because that gives them far too much say over the particular charity or the objective being sought. I believe that one can have consultants, as the Commission has recommended, and those consultants could be very valuable in order to set up a new lottery. I believe that we should use them in this way, by all means. I shall come back to this aspect in a moment.
We need to pass a very small amendment to the Betting, Gaming and Lotteries Act 1963, which would be very easy to draft. I would be quite willing to draft it if I were required to do so. It would amend the Act in order to ensure that the levy was collected by proper provisional assessments which are made, but enforcing the payments to be made by the bookmakers during the levy year. That would be easy to draft and it would have the support of Whips on both sides of the House. I do not see any Liberal Members here at the moment, but I doubt whether they would oppose it. I should have thought that, if the Bill started in another place, with luck it would go through this House very quickly.
I was once directly concerned with the question of on-course betting, but unfortunately I was defeated by that eminent tactician, Lord Wigg. I wanted the on-course betting tax and I introduced the original amendment many years ago; that provided the differential between on-course and off-course tax. At the time I argued very strongly that it should be 2½ per cent. or nothing. Unfortunately, at that time Lord Wigg was acting for the Tote—that was before he acted for the bookmakers. Whoever he acted for, he was very powerful. At that time he was determined that the Tote should not be jeopardised by something from which it would not benefit but from which on-course betting people would. Consequently, we ended up with the present position of an 8 per cent. off-course tax and 4 per cent. on-course.
At present it is not tenable to keep this on-course tax for two reasons. First, off-course tax yields about £150 million, whereas on-course tax yields £10 million. If one disposes of that £10 million by not charging at all on-course, one will get a very much stronger market which will enable one to recoup that extra £10 million off-course. All in all this would be very wise. The only people who can tell the Chancellor of the Exchequer about this are those in the Home Office. It is their task to advise the Treasury that in their view the amount which would be lost would be negligible, if anything, and would make very much better the position of those on-course It is for the Minister responsible for sport also to make that position plain. If he does, there is every chance that we can achieve our objective.
There is one other undertaking which has not yet been mentioned. It was given by the Minister of State, Treasury, my hon. and learned Friend the Member for Dover and Deal (Mr. Rees), who promised a review in the autumn of the question of VAT on foals and yearling purchases. He promised to consider bringing Britain into line with the rest of the EEC. But we are not in line with France or Ireland. It is true that Ireland has extracted a very healthy promise that it will not have to come into line for some years, but France has not and now this is the moment of truth. What a remarkable thing. When I started to mention this my hon. and learned Friend the Member for Dover and Deal was not in the Chamber, but, hey presto, he has appeared at exactly the right moment. That is neighbourly conduct to me, representing Thanet as I do. I would hope that having heard my remarks, he will make a statement fairly soon about VAT on foal and yearling purchases. It would be a great achievement if we could come into line, and if VAT could be paid only on the carcase of the horse and not on its true value.
It is absolutely true that, while we may gain Mr. Ravi Tikoo, who is absolutely determined to bring his horses to the United Kingdom, I can assure the House that many others who have horses in this country propose to go to France and elsewhere because it is not possible to train them here. The VAT on, for example, five horses is roughly the equivalent of their entire training costs and fees for the whole year. That is a rough and ready calculation, but it is about right. Therefore, if one intends to train in the United Kingdom, one must pay training fees and VAT, whereas abroad one can get the whole of the training free, in effect.
It is time that the punter had protection for his bets. This does not require legislation. It requires a code that will be adopted by the racing industry. I do not think that it would be necessary to involve the Office of Fair Trading, but it might be wise to consult it. Having done that, I believe that the Jockey Club and indeed the whole industry should provide a code, and it should be made perfectly plain to every bookmaker that he must comply. The system in which the matter is referred to The Sporting Life is not a good one. This is not a job for The Sporting Life, which must engage in heavy advertising, and it should not be brought into this matter. There should be proper independent advertising and the code of conduct should be achieved by the racing industry, by the Jockey Club and by others, recognising it as their task to see that the bets are enforced. If this is not done in this way, it can be done by the time the Home Office is ready to present legislation when we can incorporate it in an Act in 1981. I recommend to my hon. Friend the Minister with responsibility for sport that he works along the lines of a voluntary code. He should suggest to the industry that if it does not go along with him, Big Brother, the Home Secretary, will wield a big stick in 1981. That is the approach to all our problems along the line.
It is probably known that the first casino Bill that we ever had in this House was laid by me on the morning that I got married. Its purpose was to amend the Gaming Act. That was in the days of the great Gilbert Beyfus, and I had to consider with him how we could do it. The principle for casinos then was that the chances should be equal for all those engaged in gaming. That was a very sound principle. The Government introduced a Bill and they passed it, and of course it was abused, as every casino and gaming Act will always be abused, wherever possible. The legislation was very popular, gaming went ahead in this country and tourists came pouring in. As a result—and we must all realise this—casino gaming is largely a tourist industry. As chairman of the Conservative Party committee on tourism in the House, I make the most categorical statement that we should not listen to the advice of the right hon. Member for Bermondsey or do anything to damage casinos. Their clientele is 90 to 95 per cent. tourists. These people come to this country and spend a lot of money here because our casinos are better than those abroad. The money that is spent and lost in our casinos benefits the Treasury. The large sums of money that are won by visitors to the casinos are spent in the London hotels and other shops and places of entertainment if they have a big winning night. It is a large and intensely popular tourist industry. Therefore, I believe that the matter should be looked at in a practical way.
I believe that there should be a casino duty of 5 per cent. and not 7½ per cent. If it is set at 7½ per cent. those punters who have come to this country to gamble will go back to other countries. France has wide open arms at any time for gamblers. It is just as easy to gamble in Deauville or Monte Carlo as it is to gamble in London or elsewhere. It is just as easy to gamble in Morocco, in Athens and in many other countries. Therefore, we should examine the matter practically to ensure that we will not harm our casino gaming industry. We do not want to lose the benefit of the immense number of punters who come to this country.
There has been a reference to the loss of £175,000 in a night. That is nothing. Ladbroke had a cheque for £1 million that was lost by an Arab gentleman in two nights. On the first night he won the best part of £1 million only to lose it on the second night. It is too late and too phoney to strike notes of horror about such sums of money. Some people come to this country to gamble at the highest possible rates. If it is legal to do that, an immense amount of money accrues to the benefit of the Treasury and, mainly, to the benefit of the tourist industry in this country.
Therefore, I believe that gambling should be taxed but not that it should be milked completely without regard. In France there is a 5 per cent. cagnotte on chemin de fer. Chemin de fer, by far the best of the gambling games, is not played in this country because it does not pay the casinos to allow it. That is referred to in recommendation 182 of the report. When a punter goes into a casino he cashes a cheque for the amount that he requires. If the punter wins he cannot redeem his cheque by law. In that case, he is able to walk out with an enormous sum of money having possibly made out a second or a third cheque and those cheques can be dishonoured after he has left the casino with his winnings. Consequently, that financial loss must be stopped. Casinos should be able to tear up the original cheque and pay out on the balance at the end of the night.
Casinos should be prohibited from granting credit to a gambler who had previously dishonoured a cheque and whose debt has not been discharged. Many gamblers have presented such cheques and built up substantial losses with a casino over a period. That is wrong and leads to dangerous abuses and perhaps extortion at a later date. Casinos should be prohibited from releasing players' gaming debts to any third party. They should be allowed to return the player's cheque to him in exchange either for the player's winnings or a consolidating cheque.
If the tax is to be set at 5 per cent., or at whatever rate is decided, we should give an edge to the casinos to help them to pay that tax. We should bring ourselves in line with France on the "zero" in the game of roulette, which is the main game played in our casinos. If a punter bets on an even number and zero comes up, he has only to pay half of his stake and is allowed to keep the remaining half. However, in France when zero comes up the punter loses altogether. The difference is between 1·75 per cent. and 3·5 per cent. The Royal Commission rightly recommends that that should be altered. Another recommendation permits the casinos to have separate hours certificates and extended hours orders for the supply of alcohol. Nowadays, there is no real evidence that people are drunk or under the influence of drink at gaming clubs. If those recommendations are followed that is the only legislation which needs to be carried out as soon as possible.
That legislation must be carried out at the same time as the law to tax the casinos is brought in. If that is brought in next April or May—as I hope it will be—by the Treasury, in conjunction with the Home Office introducing a tax on casinos, the other small amendments to the casino laws should also be brought in. They would be small and almost entirely uncontroversial measures. Some of the amendments could be carried out within the terms of the Finance Bill, but, if not, they are simple matters to bring about. In that way, the casino laws of the country can be brought up to date at the same time as ensuring that much more money will accrue to the country without causing harm to the tourist industry. We shall then continue to receive overseas visitors to this country who want to gamble.
The subject of lotteries was admirably covered by my right hon. Friend the Member for Crosby. Therefore, I shall refer briefly to the matter. The words "gambling money goes round and round" deal with the essence of this subject. Paragraph 8 on page 4 of the "highlights" on the report shows that in 1977 £8,000 million was staked and £900 million was spent or lost. A little more than 30 per cent. of the amount that was lost by the punters went to the tax man. The average return of the promoters before the expenses of tax was 11 per cent. on that £8,000 million, which came to £880 million." We spend over £3,000 million on tobacco, £6,000 million on alcohol and £1,300 million on entertainments and yet £8,000 million goes around in gambling circles.
Lottery money is limited. Apart from whether or not a national lottery would be a success, it would siphon off a large amount of the invaluable lottery money for small society and local council lotteries. If we cannot do that, how can we improve the situation? My right hon. Friend the Member for Crosby rightly said that we should institute a voluntary code of conduct. We shall certainly ensure that local authorities do not carry out certain practices. I have not been able to achieve that alone.
As a result of pressure from me and some friends, the Isle of Thanet was the first district council in England to introduce a local lottery. I wanted the council to launch the lottery itself and to allow each charity to have the proceeds in turn. For example, we have a hockey ground in Ramsgate that needs new changing rooms, a recreation centre in Minster which needs money to carry out certain works and an old people's home in Westgate where extra money would be useful. I want such programmes to be identified because that would encourage people to help with the lotteries—to sell the tickets and so on.
Unfortunately, I did not get that sort of approach. One councillor brought in lottery managers. That is not what we want. If the local authority associations got together we could get a generally agreed voluntary code. We could bring in the lottery managers, the vast majority of whom are perfectly respectable, and get over the difficulties and get rid of the abuses. Such lotteries should not come within the scope of the Gaming Board.
I agree that the maximum limits of local lotteries should be increased, but not by too much. We want to keep them local. Local lotteries help all hon. Members to stay in the House. Whether they are Labour lotteries, Conservative lotteries or Roman Catholic lotteries, they are for good local causes. Let us keep that part of gambling separate. It is a separate ring of money which can be used effectively for good causes.
We should let the other aspects of gambling go their own way and let the rich people who come to our shores gamble as they wish and spend and waste their money gloriously to our benefit. Let us keep local lotteries local and not too big, and let us work on a voluntary code.
I hope that the Home Secretary, the Minister responsible for sport and the Minister of State, Treasury will work towards voluntary codes, whether for horse racing punters, lotteries or casinos. So much can be done by voluntary effort and persuasion.
I concede that in the last resort we may see the Home Secretary looking very fine with a magnificent stick held above his head threatening, if necessary, to apply it—not necessarily like Lester Piggott, but in the same spirit. However, my right hon. Friend should threaten to put into statutory effect what we believe to be right only if it is not achieved through a voluntary code of conduct.
The hon. and learned Member for Thanet, West (Mr. Rees-Davies) drew attention to the wide range of expertise that the debate has brought to the House—from the shires of Yorkshire to the working men's clubs of Newcastle, from Derby to Aldridge-Brownhills, from my right hon. Friend the Member for Bermondsey (Mr. Mellish), who abhors casinos, to the hon. and learned Member for Thanet, West who supports them.
The hon. and learned Member was modest about his own knowledge. I have heard him before talking about gaming and today he began to write a supplementary report to the Royal Commission. I congratulate the hon. and learned Gentleman on his timing. He was referring to the need for the Home Office to consult the Treasury when in walked the hon. and learned Member for Dover and Deal (Mr. Rees), the Minister of State, Treasury.
The Home Office Minister then left the Chamber and the hon. and learned Member for Thanet, West repeated his remarks to the Home Secretary, who had just entered the Chamber. I compliment the hon. and learned Gentleman on his timing and, to a degree, on his content, though I would find it hard to persuade the punters of Liverpool to agree that 40 per cent. tax should be levied on their pools, but only 5 per cent. should be levied in casinos. But that is a different argument.
We are agreed that we all owe thanks to the chairman and members of the Royal Commission for the time and effort that they have devoted to the examination of evidence, their own inquiries and the preparation of a report which is now the standard work on gambling in Britain in this decade.
The report is modest about the Commission's efforts. It considered 1,750,000 words of written evidence, formal written evidence from 141 sources, formal oral evidence from 38 organisations and individuals—and the evidence from Sir Arnold Weinstock alone must have been fascinating—made 111 visits to casinos, football clubs, racecourses and greyhound tracks and, presumably, to the odd betting shop and bingo session. That is a record of dedication and stamina which deserves our thanks.
I trust that the members of the Commission enjoyed their work. No doubt they are now experts on every legal and illegal device for improving the odds. They ought to be able to foretell the winner of any race and the turn of any card. Forecasting eight score draws ought to present them with no difficulty. They are probably limited by a clause in the Official Secrets Act and will have to be content with our thanks rather than any financial remuneration.
The debate is a non-party political occasion and few hon. Members are here, but every hon. Member is, by definition, a gambler. Whatever our personal ethics about gambling, we are all compelled to gamble our personal and political futures at least once every five years. Often the result has little regard for the merits of the winners or losers or even of the Government concerned.
I understand that, because we are in a Royal Palace, gambling of any kind here is officially barred. The report tells us that 94 per cent. of the adult population—about 39 million people—gamble at some time. If we are representative of our constituents, that statistic should mean that 596·9 hon. Members gamble at some time. It would be fascinating for us to forecast who are the non-gamblers in the House.
The report also says that 39 per cent. of the adult population are regular gamblers. Presumably, 247 of us could be called regular gamblers. According to the report, 9 per cent. of the adult population bet on horses or dogs at least once a month, so presumably 57 of us regularly gamble on horses or dogs. However, I find it hard to accept that, because the report says that 4 per cent. of the adult population are regular attenders at bingo, we therefore have 25·4 bingo addicts.
Other forms of gambling were not considered by the Commission. They are more often described as investing and range from the Stock Exchange to property, land, works of art, antiques, stamps and coins. However, if I went into that area I should be stretching the debate further than I or the House would wish.
No hon. Member could even attempt to cover all the points raised in the report. The House has heard from experts and with my speech we come to the amateur. We have heard of those who come to our shores and spend, invest or gamble millions of pounds in a night. Now we come to the 50p a week punter. I confess that I invest 50p a week on Littlewoods pools. That is the extent of my gambling. I should perhaps declare an interest in the debate.
Horse racing, spot the ball and football pools are the extent of my practical knowledge of gambling. On horse racing, I have been known, as, no doubt, has the right hon. Member for Crosby (Mr. Page), to put the odd pound on Red Rum or some other good horse in the Grand National. Once upon a time, there was a great horse called Eric's Folly. It was a horse of great antiquity and great experience. The other horses were so surprised to see it still alive when it came on to the course that they let it win. I have a great affection and regard for Eric's Folly.
I supported "spot the ball" for a long while. The report refers to ways of improving one's chances. My own system was to try to extrapolate, or draw imaginary lines, from where the footballers were looking to see where the lines ought to cross. That, in theory, was where the ball ought to be, but I seem to have been cursed with cross-eyed footballers. I have given it up. I would not, however, wish to see the spot the ball competition banned. There are as many systems for spot the ball as there are for football pools and horse racing. It would be unfortunate if we were to decide that that competition was no longer legal. It is a good competition which makes a fair contribution to the Football Grounds Improvement Trust. I hope that the competition is allowed to continue.
The football pools is a limited investment. As an hon. Member with a Methodist connection, I am not supposed to gamble. My excuse is that I invest in a local company. The right hon. Member for Crosby and I argue that it is one of our own local companies in the North-West. On two occasions, I have actually won the pools. The Home Secretary might well look up. The day before the last general election, I was told that I had won on the pools. My wife was bringing the cheque from London and I was waiting in great anticipation. It was a five figure win. The figures were 27000 but the point was in the wrong place. It was £2·70. My win, however, showed that the system worked.
The Littlewoods organisation, consisting of the stores, the mail order operations and the pools, is the principal commercial organisation with headquarters and main base on Merseyside. This is still a family organisation. The business and community ethics of the company and the Moores family are still strong and effective. They have a strong sense of corporate and civic responsibility. That is expressed not only through the John Moores exhibition, the arts, and the Everton football club, but in many ways that are never reported publicly. They do a lot of good, quietly. Merseyside Members of Parliament of all parties have had regular opportunities to meet the company directors, the managers and staff at all levels. If more companies followed their example, we might be able to prevent some of the problems and avoid some of the difficulties that arise on Merseyside. I have therefore, a financial interest to declare and, like the right hon. Member for Crosby, a constituency employment interest to declare.
The Royal Commission was set up in February 1976. The target, if I can use that expression, was betting, gaming, lotteries and prize competitions. The Royal Warrant contains 14 paragraphs. Only the fourteenth paragraph in the terms of reference dealt with football pools. It said:
And Our further will and pleasure is that you do, at an early date, report to Us your opinion upon the possibilities of a levy on football pools or otherwise as a means of providing financial assistance to sport …".
It was not the case that there had been any allegations of inefficiency, corruption
or illegal practices against football pools. Football pools were included only late in the day so that consideration could be given to how revenue from the pools could help sport. There were many reasons for setting up the Royal Commission. None involved criticism of the operations of football pools. The Commissioners did a proper job. Their report on the industry is that it is efficient and effective. They report that in 1951 23,000 people were employed in the pools industry. In 1976, there were 11,000. Some of the best computer operators in the whole North-West, and the country, are operating on Merseyside. The Commissioners report that they appointed consultant accountants to examine the accounts and methods of operation of the companies concerned. As recorded in their interim report
these did not disclose any evidence of inefficiency or extravagance in the running of the business or suggest that profits were exceptionally high.
The accountants' report said:
The pools companies appear to be efficiently run organisations which cannot be expected to cut their costs significantly if at all, and no material contribution can be expected from the promotors' pre-tax profit if they are to be left with a reasonable incentive to run the pools.
Yet the report puts down in some detail the changes that have occurred in pools profits between 1965–66 and 1975–76. It also records the changes in pool betting duty, expenses, profits and prizes. The betting duty has risen from 25 per cent, in 1965–66 to 40 per cent, in 1975–76. The expenses increased from 26 per cent. to 29 per cent. The profit remained the same at 3 per cent., much in line with the allowable profits of building societies. I say this following the remarks of my hon. Friend the Member for Blyth (Mr. Ryman). If building societies had been as closely scrutinised by the Building Societies Association as the pools companies have been scrutinised by their own Pool Promoters Association, we would not have had "Grays, Essex" and many others. They are self-policing. The prizes have changed from 46 per cent. in 1965 to 28 per cent. There has been a cross-over. Whereas in 1965 prizes were high and taxation was reasonably low, it is now the other way round.
The Commission rightly rejected the claims of the Gaming Board for the supervision
of football pool operations. The Home Secretary says that he will listen to advice, and I hope that this is part of the advice to which he will listen. He should leave well alone. As the report says:
The case against making the transfer is that the present arrangements have worked well and that, since no change of substance is proposed, there is no point in new arrangements. We conclude that matters should be left as they are. We do not favour change for change's sake or for reasons to do with hypothetical administrative tidiness.
I hope that the Government will accept that. Other recommendations are made. But it is important to recognise the principal differences that have occurred in the three years since the Commission was appointed. I have always claimed that, if I knew the terms of reference of an inquiry and some details of the members appointed to the inquiry, I would have a good idea of what it was going to recommend. This inquiry was set up by an interventionist Government committed to high taxation and high Government expenditure. It is now reporting to a new Government committed, rightly or wrongly, to less Government control, less taxation, less intervention, and lower public expenditure. What was proposed in the Commission's mind as acceptable from 1976, I hope will be less acceptable to this Government. After all, three and a half years can make quite a number of changes.
The recommendations of the Commission are that the pools betting duty should be reduced from 40 per cent. to 37 per cent. I put it to the Home Secretary that this is a Government committed to reductions in public taxation which should accept this recommendation. I do not know whether it is an omen that the Treasury Minister has left. But the anomaly exists. The Commission recommended that a limit of £500,000 in today's money should be imposed as the maximum prize in pools money. Yet it recognises that the attraction of the pools is "the big prize," the chance of a lifetime. I do not understand why the Government should now come in to limit what in every other way they leave free for the market to decide. Recommendation 49 is that the profits of the two large pool companies should be limited to 2·5 per cent. of the money staked. I follow the Commission's arguments, although I do not agree with them. This Government favour the market forces and are against imposing dividend or profit control. It would be incredible if they of all Governments decided by legislation to limit the profits of any companies out of all the companies in the United Kingdom. I do not think that they could do so and I hope that they will not try to do so.
Recommendations 53 to 58—my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) will have a special interest in this—relate to the question whether there should be a football board or whether this function can be carried out in some other way. At present, £,3½ million goes from the pools industry—directly, or indirectly through the Football Grounds Improvement Trust—to the football clubs. The proposal for a board to increase the levy and manage it should be considered, but, particularly with this Government in power, we could progress considerably towards the sort of help that is envisaged without creating another quasi-autonomous national Government organisation, whether advisory or not. I am against a football board being set up.
I am grateful for the information that the Royal Commission has provided. The Government might also consider removing some restrictions on football pools which do not apply to other forms of gambling. The report says that we should restrict football pools simply to help some other activity—particularly a national lottery. After 15 years of opposing almost every idea of the right hon. Member for Crosby on a national lottery, winning some and losing others, I entirely agree with him that a national lottery would be a serious competitor of local lotteries as well as of football pools.
In Belgium, admittedly in different circumstances, it has not been possible to have a national lottery and football pools side by side. The real difficulty would be faced by local charities first and then the pools.
The report says that we should limit the football pools to help the national lottery. The worst possible title has been chosen—a "National Lottery for Good Causes" is hardly the work of a brilliant public relations adviser. It would be difficult to sell that idea.
The Royal Commission, having examined the pools industry in detail, has reported that it is effective, efficient and viable, that it is over-taxed, well controlled and properly conducted, providing interest, employment, modest profit, excitement and aid to sport. I would put to this Government a somewhat different proposition from that which I would put to a Government of my own party: if they are true to their political philosophy, they will decide to leave well alone.
I hope that the hon. Member for Liverpool, West Derby (Mr. Ogden) will forgive me if I do not follow the trend of his speech. I should, however, like to follow my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) on the subject of lotteries. First of all, I congratulate the Government on arranging this valuable and important debate. I am surprised that we did not debate this report under the previous Government, because it is now 15 months since its publication and it made some serious statements.
I have no interest to declare, but perhaps I should own up to being a social gambler. That does not take me into the heady realms of the casinos, as described by my hon. and learned Friend in the company of people who can win a million and then lose it the following day. However, I was associated for a period with an old-established printing firm, one of whose objects is the printing of tickets.
I made my maiden speech on the Local Revenue Bill presented so ably by my right hon. Friend the Member for Crosby (Mr. Page). I greatly regret that because of a previous engagement I was unable to hear his speech this evening. That bill fell because the Government went to the country in 1974. However, the Lotteries Act came into force in 1975, consolidated in the Lotteries and Amusements Act 1976. But it was not until 1977 that the legislation was put into force.
The Secretary of State rightly expressed his concern about the present position of public lotteries. The first recommendation in chapter 12, paragraph 134, is a pretty serious statement for any set of investigators to make. We have seen a great upsurge in the number of lotteries. The revenue which they provide for sporting, cultural and other good causes has become woven into people's expectations. A whole new industry has developed, providing new employment opportunities. That is the good side of the coin.
The sudden development of lotteries, which gathered colossal momentum for a short period, has undoubtedly put a strain on the Gaming Board, whose task it is to monitor and to manage this new method of fund raising. Most people would agree that the board is hard pushed to carry out the task that we would expect of it in ensuring that lotteries are fairly and properly conducted.
Societies promoting lotteries have to apply to the Gaming Board for registration if the turnover would exceed £5,000. What is the power of the board to query the bona fides of societies, not only in their first application but in subsequent ones? The more one examines this scene, the more one concludes that we need a strong and effective Gaming Board backed by powers to make a full investigation of subsequent applications as well as of the first.
Four distinct areas are important to the proper conduct of lotteries. First, people must be assured of the integrity of the promoters of lotteries available to the public. Secondly, there must be a correct ratio between the number of prize tickets and the number of tickets that do not carry prizes in each batch of tickets sold.
My hon. Friend the Member for Richmond, Yorks (Sir T. Kitson) said that prizes could be drawn but that because tickets in that batch had not been sold there were no prizes to be claimed. When the winning tickets are put into the run of tickets, it should be done fairly, so that winners can be found.
Thirdly, the public should be protected from any chance of fake tickets being sold. I have not so far heard of such a case but the position should be watched. Fourthly, it is important that out-of-date tickets should be disposed of so that they may not be used on a subsequent occasion to extract money unlawfully from a prospective punter. I believe that the worthy projects and causes must be clearly advertised on the ticket and at the point of sale. My right hon. Friend the Home Secretary said that we must not allow a commercial element to come into this form of promotion. I entirely agree. It is immensely important that lotteries should be promoted for the cause to which the proceeds will be put.
I now refer to the integrity of the promoters. It is obviously important that promoters should be registered with the Gaming Board and that they receive frequent scrutiny from members of the board from time to time. It is important that their accounts, which must be submitted to the Gaming Board, are properly scrutinised. Each lottery should be scrutinised. As a result, a greater number of staff will be required to undertake these tasks in the Gaming Board. Funds to enable that to happen must be generated from within the industry. This is not a case of the Government going forward and using taxpayers' money to fund such an operation. I go further and say that the Gaming Board should be a self-financing operation with money raised from the punters themselves. I see that my right hon. Friend agrees.
My second point deals with the correctness of the ratio between winning and losing tickets. I am concerned with the problem of security at the printers. When the tickets are printed, the winning tickets should be fed in in such a way that there can be no possible chance of them being retained and used by an unreliable member of staff. That is the core of the problem with which we must deal. There must be the regulation of procedures to ensure that witnesses are at hand to ensure that winning tickets are correctly pushed into the batches and that the batches are sealed in boxes. I should like the industry to provide its own regulation, policing and security. However, I have not seen any willingness on the part of all companies involved to take that necessary action. That is regrettable. We must bear that in mind in bringing forward legislation to govern the security of the tickets at the works and in distribution.
On the question of the printers joining together, I mentioned that I was involved with meetings of many firms and local authorities and charities to draw up a code. I found a good response from some of the most responsible printers to the point raised by my hon. Friend.
I am delighted to hear that. It is good news. My information goes further back than that of my right hon. Friend. That foundation must be built on. It is a point that we greatly wish to encourage.
Thirdly, we must ensure that the starting and completion dates of promotions are printed on each lottery ticket. There is a danger here. Perhaps we have passed it as the number of lotteries has diminished rather than increased. However, there is a danger that we might suffer from too many, or overlapping, lotteries. That would tend to confuse people and might make it appear that a lottery was not being genuinely conducted within a space of time. The lottery might appear to be open-ended. I do not think that we should allow that to happen. The genuineness of the ticket must be established.
I referred previously to fake tickets. When the lottery reaches its final date the tickets must be returned, accounted for and destroyed. That lottery will then have been completed. To that end I support the recommendation that serial numbers are printed on each ticket. That is important. The cause for which the proceeds will be adopted should also be printed on it, as should the printer's name. Those points are already governed by regulations.
The Gaming Board has the responsibility for approving tickets. The ticket numbers must be safe from premature revelation. I refer to the rub-off or flat type of tickets. We must ensure that no one can tamper with the tickets before they are sold. That is generally accepted. I have not heard of cases where there have been difficulties. However, this is a new industry, and new tickets are always being tried and developed. It is important that the Gaming Board accepts responsibility for ensuring that tickets are foolproof and cannot be tampered with before they are sold.
Those matters call for legislation. When the Conservative Party was in Opposition I said that we should not over-legislate or create legislation for its own sake. I stand by that statement. However, the conduct of lotteries is an important matter. I ask my right hon. Friend to consider the subject carefully and decide whether legislation might be needed, and whether it might be instigated in the other place.
I now turn to the question of advertising. The way in which a lottery is promoted is of crucial importance. It must not be commercial. It must fairly and adequately describe how the proceeds are to be applied. It should be clear to the purchaser from the point-of-sale material who is promoting the lottery and how the proceeds will be applied. Where a local authority runs a lottery it is important that it inserts an advertisement in a local newspaper saying what the proceeds were, how many people won and how much were the prizes.
Lotteries are here for a period, perhaps to stay, as are pools, horse racing and casinos. It is important that they should be properly and efficiently conducted. The experts advising local authorities, having been registered and having the backing of the Gaming Board, should do the job. The local authorities should not venture into this area themselves. It is far better to allow the machinery of private enterprise—I refer to the costs of promoting the lottery—to come into play so that the best person is available to the local authority to run the lottery. If the local authority is not happy with that person it may employ someone else.
I agree with those who have spoken against a national lottery. I support local lotteries because they have local connections and they provide a means whereby local authorities may raise funds for causes with which people may easily identify themselves. If there were a national lottery I can imagine the arguments that would develop as to where the proceeds should go—either spread equally throughout the country or used in those areas where the greatest numbers of lottery tickets were sold. It would be a confusing pattern. We are best left with lotteries carried out on a local basis. I greatly hope that our lotteries will have a good reputation and that we may ensure that they are efficiently and effectively carried out.
When dealing with the report of the Royal Commission on gambling, we must bear in mind that it affects practically all walks of life and that it has wide social connotations. I was delighted when the Home Secretary referred to bingo. I am not a lover of that game, but the right hon. Gentleman brought out an important point. If it were not for bingo our elderly people would have no social life.
It is said that legislation may be introduced in two years' time. What is suitable for one generation is not necessarily suitable for the next. The world in five years' time will be a different world from that of today. There are pressures for a 35-hour week, and within two or three years there may be a four-day working week. What will we do with our leisure time when that happens? That question needs to be considered.
It is impossible to control the instinct of mankind to gamble. Reference has been made to one-armed bandits in clubs. My right hon. Friend the Member for Leeds, South (Mr. Rees) opened a Labour club in my constituency. Without the one-armed bandits that club, and many others, would be in the red. They provide comfort for the elderly and it is their own money that they are spending. We are dealing with a touchy and difficult subject that requires serious consideration.
It is impossible to legislate for every facet of gambling or "trying your luck". I agree with much that has been said about horse racing. It is an outside sport which the organisers are attempting to make viable. I should be in favour of facilities being made available for punters to take their families with them.
I shall try to crystallise my remarks as much as possible, in the interest of brevity. Greyhound racing is another sport that needs to be considered. I was in the Chamber in 1960 when the then Home Secretary introduced the Betting Levy Bill. He said that if a man's family were in mortal danger the first thing that he would save would be his wife and the second his horse. I interjected to ask "What about a man's dog? In my case I would save my dog". The Home Secretary said that the Bill did not make provision for dogs.
Greyhound racing is the second largest spectator sport in the country. It has been popular for a number of years. Punters visiting a well-fitted stadium can enjoy a West End meal at a moderate price, can bet as little as 10p. for a little excitement and can enjoy a good evening in comfort.
One of the pleasing remarks made by the Home Secretary this evening concerned dates. I shall not labour the point, except to say that I should like the four days allowed for special holidays increased to six days. Greyound racing starts at a quarter to eight and finishes at a quarter to 10. It is far better for the individual to finish his evening at the stadium than to drift off elsewhere. The fault with greyhound racing is that it lasts only about two hours and it should go on a little longer. It is imperative that the number of races be increased from about eight to about 10. I agree with the views expressed by the Home Secretary.
The Royal Commission has given credit to the way in which horse racing and greyhound racing have helped to limit criminal activity. That speaks volumes for both sports. Greyhound racing contributes to public entertainment. In 1945, when the late Sir Stafford Cripps was Chancellor of the Exchequer, there was more money than goats chasing it around, and everyone co-operated well. Both the greyhound racing and horse racing industries are finding it difficult to keep their heads above water.
To some extent greyhound racing has been rather unfairly treated. The industry is concerned that the Royal Commission was unable to accept the argument that on-course bookmakers should pay more than they are now paying. There were 30,000 spectators at a derby at White City this year. The greyhound totalisator was £250,000. The on-course bookmakers handled about £600,000. They paid only £120 for the privilege. The Home Secretary should give serious consideration to bookmakers on course and the betting levy paid.
What are we to do with our extra leisure time? I do not like excessive drinking or gambling. A man may have 50p per week and might make his one bet of the year on the Derby. If he went to a greyhound track he could have a meal, bet 10p on a race and sit in com-for to watch the racing. It is a good spectator sport.
It is a tragedy that the Rochester greyhound stadium has been sold for building. Why has it been sold? The answer is that at present the stadium is not viable. Of course, the stadium at Belle Vue, Manchester, one or two others in Manchester and probably Brighton are doing quite well. However, as public representatives we have to make provision. It is no use the Royal Commission seeking to stifle people's excitement. Surely it is better for people to go to well-conducted football matches or horse race meetings. That brings pleasure to themselves and to others. That is what I prefer.
Some hon. Members have spoken about casinos. It is said that they form a great tourist industry. Is that right? It may be in London, but it is not in the provinces. There are casinos in some of our industrial cities. The worst feature of casinos is that the gambling continues for 24 hours. It continues for every hour of the day. If a gambler has money in his pocket and he cannot pull himself away from the tables, he may continue until he has nothing left. In one instance a man sold property valued at £150,000. He went into a casino and emerged with nothing. The good feature of horse racing and greyhound racing is that at the end of the racing the punter goes home whether he has won or lost. That is why I think that there is more to be said in favour of horse racing and greyhound racing.
The Home Secretary, when talking about greyhound racing, appeared, as I thought, to express himself as being in favour of increasing the number of racing days. I accept that view. I should also like to see the number of special days increased. Thirdly, something should be done about the betting levy. That is necessary if the industries are to be kept afloat. A great deal of useful evidence has been submitted. I know that some hon. Members have been to witness greyhound racing. I am sure that they will accept that the stadia are well appointed. I hope that the industry will have the Government's blessing and will concede my arguments.
For many who would not describe themselves as gamblers, football pools represent each week an opportunity to invest a small part of their earnings in the chance to have a dream win that could change their lives. The Royal Commission noted that a minimum of 35 per cent. of the adult population invest in the pools almost every week compared with about 9 per cent. who invest in horse or dog racing at least once a month. The average stake per coupon is only about 40p or 50p.
There is no evidence that those who complete football pool coupons bet more than they can afford or that it leads to more addictive forms of gambling. For most people who do the pools it is a harmless source of enjoyment. That arises for some from the unpredictable nature of football, whereby a score draw can depend on whether a shot goes in off the post. For others it is a source of enjoyment as it is based on pure chance and can account for the distribution of large prizes to anyone who completes a coupon.
No doubt there are some who would be equally happy to see the winning numbers generated by a computer instead of players running around a football pitch on a Saturday afternoon. Presumably for those who take that view the national lottery for good causes would be equally suitable.
It must be accepted that competition between the pools promoters is limited. There is some competition deriving from the type of service that is offered, pricing and the size of the prizes. However, we must recognise that one of the companies has two-thirds of the market held by national firms and that the two largest companies between them account for four-fifths of the total market. That is the position even if we include the small sport and charity supporting pools operating under the 1971 Act.
We must ascribe that fact to the efficiency of the large companies, which has already been referred to by several right hon. and hon. Members. The Royal Commission accept that that is so. It observes that if there were widespread dissatisfaction with the industry the firms would soon lose their clients. The Royal Commission indicates in chapter 11 that it is difficult for new companies to get into the industry with any prospect of success. The Commission gave as the cause the fact that until a large number of punters are attracted prizes will be paltry. Prizes will remain small as long as there are few new clients filling in the pools for any one company. That is a vicious circle that presents an almost impenetrable barrier to prospective entrants into the market.
It may be argued that an equally important factor is the extremely efficient system of collection operated by the large companies, whereby 90 per cent. of the coupons are collected by a network of about 100,000 agents who call weekly from door to door. Great economies of scale are needed to make the system work. It is significant that the third company, Zetters, with only 6 per cent. of the total market, relies upon the postal service for well over half the coupons that are collected. Therefore, it is reasonable that the special position of the pools should to some extent mean that taxation is reflected by it.
The person who suffers—if that is the right word—because of the very high rate of taxation on pools is the pools winner, and the Royal Commission makes the reasonable suggestion that the rate should be reduced, at least to 37 per cent., partly in order to provide a better rate of return for the investor but also partly to assist the game.
Whether my right hon. and learned Friend the Chancellor of the Exchequer is in a generous mood when he comes to devise his next Finance Bill will no doubt depend partly on his view of the elasticity of demand displayed in the industry. Those who complete the coupons do not get a particularly good rate of return, but probably few know the rate at which their entries are taxed, and there is no evidence whatever that the inadequate size and number of prizes is currently acting as a deterrent to fresh investment.
I suggest, looking ahead a few years, that the nature of the pools industry will be changed very considerably by the new technology that becomes available. This may not have been touched on directly by the Royal Commission, but it is worth remembering that the last Royal Commission on the subject of gambling reported in 1951. On the principle that the next one may not report for another 30 years, it is reasonable to try to look some way ahead.
During that time, one would expect that the television set in most people's homes will be linked to a national data network, as some are already with Prestel and other systems, with the difference that information will be communicated in both directions. If the housewife is able to call up a list of groceries at the local shop, order those groceries and collect them when they are already packed, it is reasonable that her husband should be able to call up a pools coupon on the screen and complete it electronically by pressing a few buttons. His bank account would be debited automatically and credited to the pools coupon firm at the moment that the coupon was transmitted electronically.
I am grateful to the hon. Gentleman. There will be many changes generated by the new technology and we shall have to get used to them. The innovation would abolish pools collection at a stroke. There would be no danger of fraud by collectors. That may be a very insignificant problem, but it concerned the Royal Commission.
The companies could also obtain a print-out of all dividend winners as soon as the final whistle had blown at about 4.45 p.m. on a Saturday, thus making unnecessary a large part of the staff who at present correct the coupons. Hon. Members from the Liverpool area would be very concerned about that. The investor, at the same time, would be able to call up instantaneously a print-out of his winnings on the screen.
The companies pride themselves on being significant employers in areas of high unemployment, but equally they state that they are continually endeavouring to improve their methods in order to bring about a greater return to the punter. It would surely be unreasonable for them to turn their backs on such an obvious use of this new technology. I would not, however, wish to suggest that such changes are imminent or even near, but, looking ahead some years, I consider that this is likely to be the biggest development to occur in the future.
An important implication would be that, freed of the need to establish a collectors' service, it should be much easier for competition to develop in the pools industry, although there would still remain the question of the inadequate size of prizes, which would make life difficult for new entrants into the field. By this time, however, new gambling outlets may well have been made possible by this new technology, judging by the present popularity of television games with a high element of gambling in them. Parliament in future will no doubt have to consider how to regulate the new forms of gambling that become available.
I should like briefly to mention what is known as spot the ball. The Royal Commission proposes that this competition should be made illegal, mainly because it is not possible for participants to check for themselves whether they have won. But this seems to be a rather exaggerated response to a problem which apparently worries only a few individuals, who are not in any case obliged to take part in the competition.
The Royal Commission found a high standard of accuracy and security in the checking of entries and the proposal to abolish a competition, which is certainly popular with a large number of people, seems to me to be ill judged, especially as it would deprive the Football Grounds Improvement Trust of a vital source of funds.
There are some arguments for a national lottery for good causes, but I think it is liable to the basic and fatal defect of a national lottery. That is the impossibility of determining which are the good causes to which prizes should be awarded. The Home Secretary has already drawn attention to that. We do not wish to create yet another quango. We should also remember that existing local lotteries are organised for all kinds of good causes. They would be obliged in many cases to go out of existence.
In the important matter of aid to football, there is little doubt that without support from the football pools and from spot the ball competitions a very large number of league clubs would already have gone out of existence. It is right that the pools firms should support the game on which their existence depends; the game and the pools sink or swim together. The total contribution in 1979 should be well over £6·5 million.
The Royal Commission proposes the abolition of spot the ball competitions and the creation of a national lottery which will seriously hit pools investment. I am far from convinced that the money that football currently receives could be made up in other ways even if taxation of the pools was reduced in order to boost the amount which goes to the game.
The Royal Commission also proposes the creation of yet another quango, the football board, and that in a game which already possesses a plethora of administrative machinery. The present Football Grounds Improvement Trust, supported by the Pools Promoters' Association on a voluntary basis, works very well. The game is happy with it and I see no reason for creating a bureaucratic alternative to perform a similar function.
At the same time there is scope for examining the ways in which football should be supported in the future. It is vital that the injection of funds should not simply fuel the increase in player transfer fees. Until now the emphasis has been on ground improvement in order to enable clubs to comply with safety requirements. This has been all to the good, though I suppose that some clubs might complain that they were spending money on ground safety well before the Safety of Sports Grounds Act 1975 came into force and that they have received no support. They now see clubs which, in the past, have paid less regard to safety than they have receiving assistance.
For the future I believe that the emphasis should gradually change so that football in general, rather than the grounds, receives the bulk of the help. Just as first-class buildings do not necessarily create a good school, it is no good having a superb, modern stadium with safe and excellent facilities if the club cannot attract adequate crowds to fill the stands and repay the bank loans. For some clubs this has, sadly, been a bitter lesson to learn.
More help should therefore be given to train and encourage young players and to help non-league clubs from which the stars of tomorrow may emerge. Help should be given to create a more stable and secure position for those footballers playing for teams not in the higher divisions and whose names are not on everybody's lips. Those individuals would be helped to adjust to a different life once their playing careers were over. The working life of a professional footballer is short unless he obtains a job in management, which we all agree is more precarious, if that is possible, than politics. I believe that this is the direction which has already been considered by the trust.
Any discussion of football cannot avoid the subject of hooliganism and bad crowd behaviour. The reduction in attendances from season to season can at least be partly attributed to this. Obscene chanting and bad language are on the increase and I can well understand that many spectators, and potential spectators, are more deterred by this than by the better publicised but much rarer outbreaks of violence from taking their wives or girl friends to a match. I do not support the politics of Mr. Brian Clough but I very much support the courageous measures which he has taken to alleviate this situation.
I should like to make a novel suggestion: that a proportion of the funds available should be set aside for distribution on the basis of the behaviour of clubs' fans at both home and away matches. It would be easy to establish a panel of assessors, one of whom would visit each of the football league grounds each Saturday when a home match was being played, to award points which each month would result in the distribution of funds on a merit basis.
I can speak only from my experience as a regular supporter of Leeds United, but I can say that during the past four years such things as obscene taunts at the opposition, verbal attacks on coloured players whenever they touch the ball and even the shouting down of police appeals for help in apprehending the Yorkshire ripper have taken place. All this comes from a tiny proportion of the crowd and is no doubt deprecated by the vast majority as well as by the directors, but their behaviour certainly damages the game, as the Royal Commission acknowledges.
I certainly do not suggest that it will be easy to stop this kind of thing from happening, but I believe that if the financial situation of clubs could be related in a demonstrable way to their fans' behaviour it would put a considerable moral weapon in the hands of managers determined to put an end to this crude kind of activity.
I hope that I have shown that, in relation to pools and football, improvements can more easily come about not by legislative changes but by building on and developing the present structure.
I do not intend in my brief intervention to range over the report widely or to speculate on future technological changes. I want to deal in the main with two points. However, in view of some of the observations that we have heard about the failings of bookmakers, the Tote, lotteries and members' clubs, I feel that, having some years' experience in the gambling industry and many more years as a punter, on the whole British gambling is fairly healthy and straightforward.
No, not always profitable.
The first point with which I want to deal concerns the impact of a national lottery. Examination of the gambling industry's figures in recent years shows that the market is not only finite, but fairly inelastic. I have calculated some figures of gambling as a percentage of consumer expenditure in the years 1975 to 1978. These are my figures, not those of the Royal Commission. In 1975, 1·29 per cent. of consumer expenditure was spent on gambling. In 1978 the figure was 1·31 per cent. The two years in between show consistency, because the figures were 1·25 per cent. and 1·28 per cent. Therefore, the proportion of consumer expenditure spent on gambling remains fairly constant year after year.
Looking at expenditure on gambling as a percentage of total leisure expenditure, the figures are 6·14 per cent. in 1975 and 6·09 per cent. in 1978. Therefore, consumer expenditure on gambling is fairly constant and the total market also remains fairly constant. If that is so, one must rightly assume that the introduction of a national lottery will take money away from somebody. In the same period, 1975 to 1978, inflation went up by about 42 per cent. The total turnover of the pools increased by slightly less than that—34 per cent. The total turnover on horse racing and similar betting also increased by about 34 per cent. The total turnover of bingo increased by 62 per cent. The only form of betting which made a massive leap forward, because of the changes in legislation, was the lottery which increased by 210 per cent. Therefore, it is not new money that is spent on gambling but money that has been transferred from one form of gambling to another. If we have a national lottery it would take money from somewhere else.
There are two obvious areas from which the money can come. As my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) and the right hon. Member for Crosby (Mr. Page) have said, a national lottery might compete with the pools industry. I believe that that would be so, to a certain extent. There would certainly be dangers for employment in the Merseyside area.
I am not sure that the impact on the pools would be as great as the Royal Commission suggested. The pools are tied to football which is fairly healthy in Britain. People in Britain would rather have some form of gambling for high prizes that is geared to football, which is something they understand, than to something that is geared to a set of numbers—49 numbers or whatever it is. So there is that argument.
The only strong argument that the Royal Commission put forward why it feels that a lottery would prove superior in a battle with the pools is that a lottery would provide a jackpot every week, whereas the pools results vary and on the face of it they would not be able to provide a jackpot every week.
That is an erroneous argument, because the pools would change their form. On the eight match treble chance pool one would be required not only to have eight score draws, but the score draws with the highest number of goals to attract a jackpot prize. In that way the pools would also provide a weekly jackpot to compete with a national lottery. Therefore I do not feel that the impact on the pools would be as great as the Royal Commission suggested, although there would be dangers.
The real impact would be on the great mass of small lotteries which help charities, local authorities and many other causes. I agree with everything that has been said about the need for a code of conduct and better regulation of lotteries. Nevertheless they perform a very valuable service. I have no doubt whatever that the main impact of a national lottery, in direct competition in every way, would be virtually to destroy our existing small lotteries system.
The only other point I wish to make deals with jackpot machines. The Royal Commission decided that jackpot machines should remain in clubs and not be permitted in public houses. On this matter the Royal Commission is right. In spite of some of the things that have been said about them, clubs provide a service for their members. The large amounts of money that they extract from jackpot machines are used to subsidise the beer sold in the clubs and to provide a wide range of social activities for the members. A comparison cannot be drawn with a public house, which is a profit-making unit.
If we could guarantee that when jackpot machines were put into public houses the money from them would provide community and social functions via the pub, that would be fair enough. But while this vital difference between the role of the public house and the club remains—I do not see any way round it—there is every argument for giving clubs their privileged position. I welcome Lord Rothschild's comprehensive report. It is probably the most comprehensive report submitted for many years. I also welcome the careful attitude adopted by both Front Benches.
Order. A number of hon. Members have been in the Chamber throughout the debate. I should like to call them all and I therefore appeal for brief contributions.
I shall do my best to be as brief as possible. I should like to develop the theme in the speeches of the hon. Member for Liverpool, West Derby (Mr. Ogden) and my hon. Friend the Member ber for Brighouse and Spenborough (Mr. Waller). They dealt with the Pools Pro-motors' Association and its work with the Football Grounds Improvement Trust.
I am sorry that the Royal Commission recommended that the spot the ball competition organised by the PPA should be ended. I hope that the Minister of State will reassure us that that recommendation will not be accepted.
The PPA provides a substantial amount of money to the trust by running that competition. The right hon. Member for Birmingham, Small Heath (Mr. Howell) will be aware of the work done by the trust because he was the Minister with responsibility for sport when the 1975 Act providing for the safety of football grounds was passed. The trust is funded solely by the PPA and the spot the ball competition. If it were not for the work done by the trust it would be difficult to implement the provisions of the Act. That Act was passed as a result of the terrible disaster at Ibrox Park in Glasgow in 1971.
More than 1 million people each week enter the PPA spot the ball competition. Each person makes a small outlay. The Royal Commission could find no fault with the manner of conducting the competition. The report states:
High standards of accuracy and security which we have examined apply to the checking of entries assuming that they have been received and the selection of winners is fair and impartial.
We have been discussing sport and gambling. Let me make it clear that I am talking about innocent gambling—gambling which is indulged in by Mr. and Mrs. Mopp who want to have a small flutter at the end of the week. They want to test their skill and lay out a small amount of money with the prospect of winning a prize, but not an enormous sum of money.
A tremendous amount of funding is generated by that innocent gambling for the Football Grounds Improvement Trust. The trust has assisted more than 90 of the 130 Football League clubs. Originally the trust intended to assist only first and second division teams but now it donates considerable sums to the small clubs.
I have a vested interest in the work of the trust because I represent a constituency with a fourth division team—Scunthorpe United. So far Scunthorpe has not taken advantage of the funds that are available from this trust, but I hope that it will do so in the future.
It is estimated that an annual income of £2¾ million to the Football Grounds Improvement Trust will be generated during the current year. By September 1979, £6 million had been received by the Football Grounds Improvement Trust and set aside for safety projects at the grounds which by then had been designated under the Safety of Sports Grounds Act. I sincerely hope that the Pool Promoters' Association, the Football Grounds Improvement Trust and, indirectly, the football grounds themselves can receive some assurance from the Minister that the Government will not implement that section of the Royal Commission report.
The contribution from the PPA spot the ball competition is, therefore, crucial to improving football grounds, not only in the first and second divisions, where some funds are in existence, but also to the very small clubs that are not so fortunate in the funding. Mr. Alan Hardaker, the secretary of the Football League, has suggested that the consequences for improving football grounds will be quite severe if the PPA spot the ball competition were ended, as suggested by the Royal Commission.
Time prevents me from developing my arguments further, but I sincerely hope that we can look to the Minister for some reassurance on this matter.
Even if I had the time, which I do not, I would not have commented on the inquiry into the Tote. The Home Secretary said that he had better keep quiet about it as an inquiry was taking place. As one of those who tried to get the inquiry under way, I shall desist from any comments until after Mr. Aglionby comes out with his report.
I want to concentrate briefly on one of the weakest aspects of the Royal Commission report. That was the section on greyhound racing. I speak not as someone who goes to greyhound racing but as someone who has taken an interest in this sport. The sport is far more important than Rothschild led us to believe. It has 6½ million spectators a year and a gambling turnover of between £500 million and
£600 million a year. Therefore, I do not support what Rothschild said—that:
There simply is not the interest in greyhound racing as a national sporting enterprise that there is in horseracing.
Greyhound racing is the nation's second most popular spectator sport and the Government must do far more than simply stand and watch from the sidelines as this important sport—not an industry, as the Home Secretary mentioned—goes downhill.
The report devoted 20½ pages to greyhound racing. One of the correspondents of Sporting Life, perhaps a more learned person than anyone who sat on the Royal Commission, said:
This is a scrappy assessment … bears witness to how little they know about the subject".
There is a great deal that is nonsensical and wrong in the Commission's analysis. I refuse to believe that one can contrast the "sport" of horseracing with the so-called "non-sport" of greyhound racing. To do so one would need to be incredibly naĩve. I am concerned about greyhound racing mainly in respect of the way in which it is governed. A variety of names have described the governing authority, but, whatever name is put up, the sport is governed by the track owners. I believe that they have shown themselves manifestly incapable of governing an important and well-supported sport.
In 1977, they set up a front organisation—the British Greyhound Racing Federation—to try to convince the Home Office and the Royal Commission that there was some form of democratic body to govern the sport. That body failed—rightly—to convince. It was left to collapse into liquidation and the true nature of the control of this sport by the track owners and bookies was revealed in all its nakedness. I do not believe that there is an effective representative governing body in this sport and feel that the public interest is not properly looked after.
I have suggested that there should be a publicly appointed authority to oversee this sport. Indeed, a few months ago the domination by the track owners was made manifest when they abolished the pseudo-democratic institution that they had set up—the BGRF. Now their dominance is there for everyone to see. Now and again they have tried to fiddle around with naming and give the impression that there is once again some form of representative institution.
That is a body set up to fill the vacuum they left and convince the Government and the public that it is a representative institution. They use the word "board"—the British Greyhound Racing Board—to give the impression of statutory authority. It is unrepresentative. There are people on the board other than track owners, but they have been simply invited. The British Greyhound Racing Board is not at all representative and cannot convince the public that it is. I hope that there will be a genuinely, not pseudo representative body and, if the industry cannot establish it, it will have to be established by the Home Office. There should be a publicly accountable body incorporating representatives of those outside the so-called official body. These should include the Independent Greyhound Promoters' Association.
The financing of greyhound racing requires more than the titbits suggested by the Home Secretary. There should be a levy on off-course betting so that some of the money can be channelled into the sport. Of the money staked in betting shops, 20 per cent. is with greyhound racing. Why can there not be a levy on greyhound racing as on horse racing, in order to channel some of the goodies into greyhound racing? As my hon. Friend the Member for Normanton (Mr. Roberts) said, there should be some form of levy on the track bookies who are simply charged five times the normal admission price and make a great deal of money.
There should be better government of the sport. We must see less scandal of the sort that occurred at the 4.13 race at Watford on 22 May when doped dogs were flopping all around the place and the so-called inquiry by stewards showed the mockery and stupidity of what is taking place in the sport's government.
I hope that this important sport is put on a proper footing, as it must be if it is to have any respectability. It must get away from domination by commercial interests and receive a far greater injection from those who play a great part in the sport—the breeders, owners, trainers and dedicated staff who work in the kennels. It is an important and vital sport, so let us put it on a proper footing.
The hour is late and much ground has been covered, but I should like to mention two points that have not received sufficient attention.
First, I wish to inject a note of realism into the debate on the Commission's recommendation about casinos. There are a number of cases pending, some concerning licensing and some of a criminal nature. I shall not refer to them. Casino managements live on the fringe of criminal law and persistently contravene it. The Gaming Board has great difficulty in collecting and deducing, in admissible form, evidence to prosecute casino managements in London and elsewhere in the country.
I should like to see a great strengthening in the powers of the Gaming Board to regularise gaming and compel casino owners to make their large profits within the framework of the gaming laws. I support the recommendations of the Commission that there should be a casino general betting duty and additional casino levy. I see no reason why the Chancellor of the Exchequer cannot introduce levies of that kind soon. They are easy to calculate and administer and provide a large source of the revenue of the big four multinational companies in England which control the casinos.
About 50 per cent. of the profits of those big four companies, which have interests in other areas such as leisure and hotels, are derived from casinos. That is a huge source of revenue which the Chancellor of the Exchequer can tap. The Government are dedicated to cuts in public expenditure, and here is a source of revenue that could be used to good purpose.
The Gaming Board desperately requires additional powers to control gaming. To give an example, gaming inspectors can visit casinos and inspect documents and books but only those that are on the premises of the casino. Unscrupulous casino owners, as recent cases have shown, take good care that incriminating documents and books are not on the casino premises. Therefore, the representatives of the Gaming Board are powerless to collect that evidence. There is a great and urgent need to strengthen the powers of the Gaming Board.
When Mr. Butler, as he then was, introduced the legislation on licensed betting offices in 1960, the express purpose was to eliminate illegal street bookmaking and create the concept of a licensed betting shop, supervised by the police under the general direction of licensing magistrates. On the whole it has worked well. I therefore support the Commission's recommendations that these premises should be made more comfortable, but I disagree that betting shops should not be open in the evening. If there is evening and night racing with on-course betting, there is no reason to ban off-course betting in the betting shops.
Betting shops are thriving. They cater in clean and controllable premises for the needs of the vast majority of punters. They are under strict supervision from licensing magistrates acting through the police and are to be encouraged. I therefore commend the Commission's recommendations in chapter 7 that some of the technical rules relating to advertising signs in betting shops should be changed and that they should be allowed vending machines for light refreshments and nonalcoholic drinks. These are at present forbidden by law. Lavatories are not expressly forbidden by law and many licensing magistrates and planning authorities like to have them. The future provision of such facilities should be encouraged.
Betting shops are a vast industry that Mr. Butler could not have foreseen in 1960, and even when the consolidating legislation was passed in 1963 no one could have envisaged the vast empire that we now have. It is wholly healthy and enables working-class people to bet in comfortable and clean surroundings, and I support that recommendation.
I am grateful for being accorded two minutes in which to add my voice to those of the many hon. Members who have expressed scepticism about the establishment of a national lottery. The House has expressed a profound wisdom in being sceptical about the proposal.
My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) said that the phrase "national lottery for good causes" is something of an absurdity. It represents a reductio ad absurdum to benevolent paternalism, and it would therefore be extremely unwise for the House to support it.
A number of hon. Members have referred to the problems of giving out the prizes. When we think of the parable of the labourers in the vineyard, which every hon. Member has seared into his soul, we can see that the concept is an absurdity. I trust that it will not come about.
The debate has been fascinating, and that is due to the magnificence of the Royal Commission's report. The detailed examination of the betting and gaming industry in this country, the style of the report and the attempt to discern a philosophy to put before the Government has been first class. There were a lot of recommendations, most of which were totally realistic, but in one or two major respects the report is wrong.
Something that concerns me, as one of the Ministers responsible for the formulation of the terms of reference of the Royal Commission, is the fact that a part of those terms of reference was to recommend the contribution that gambling should make to the furtherance of sport. That has hardly been touched upon in these discussions. That aspect never appeared in the Home Secretary's otherwise interesting speech. Yet the contribution to sport that gambling makes, or should make, is a matter of great importance.
The recommendations of the Royal Commission are already almost out of date, even before we debate them here. So much has changed. In fact, this industry is endlessly changing almost before our eyes. The major changes that have occurred since the Royal Commission took evidence, and even since it reported, include the emergence of the Tote in a much more realistic guise than before.
Secondly, there has been a welcome change of attitude on the part of the Jockey Club towards the governing of racing. Then there is the question of the changes brought about by small lotteries, which have transformed the position of many small football clubs and saved them from total liquidation. The fourth aspect is the great success of the Football Grounds Improvement Trust, which we established with the co-operation of the pools' promotors. All these things have changed the situation that the House is discussing today.
I turn now to the question of the national lottery. We have been debating these matters for six hours, yet we have heard about only three sports. We have heard a lot about racing, quite a bit about football and greyhound racing just got a look in. There are 64 sports in this country. What on earth are we doing about the other 61?
This House cannot concentrate its mind obsessively on one or two sports. I say this even though I like racing, and I am a product of association football. This matter has great relevance to the national lottery. Every speaker in this debate has opposed the concept of a national lottery as recommended by the Royal Commission. I do too, but I do not follow other speakers in saying that we should not have a national lottery. If we say that, it means that we are doing nothing for the other 61 sports. How on earth are they to be financed?
The advantage of the national lottery is that we would need only about two a year. This is where most hon. Members have gone wrong. The concept of the Royal Commission—that we should have one lottery a week—is ludicrous; in fact, it is crackers, and I do not know what its members were thinking when they suggested that. Such a suggestion would not knock for six the Roman Catholic churches, football and cricket clubs and a host of other organisations that basically continue in being as a result of the weekly flutter.
I have looked carefully at the Canadian lottery which raised money for the Olympic Games. That was successful because it was held only two or three times a year. It was a major lottery for a specific purpose. I agree that if we save the national lottery for good causes it would attract the greatest amount of disinterest from the British public. However, if we had one Sports Council lottery and one Arts Council lottery we would not need so much bureaucracy. If we thought in terms of community sports and community arts, we would be facing up to realities and doing something worthwhile. All our experience shows that we need to put more money into community-based sports and arts, especially in towns and cities. In my constituency I attended a performance this weekend that was organised by the Second City Theatre Group. It was a magnificent piece of theatre put on to celebrate the eightieth anniversary of the Birmingham settlement. However, the group's future is in jeopardy because it is unable to raise finance from the Arts Council.
One of the candidates ruled out by the Royal Commission for running a national lottery is the pools. I cannot for the life of me see how a commercially viable organisation with spare capacity and collectors in every street in the country is ruled out when we wish to ensure that the job should be done effectively and efficiently. I shall return to the subject of the pools. I hope that the House will reconsider the concept of holding a national lottery once or twice a year. It has proved so successful in Canada and it does not impinge upon the ordinary weekly lotteries. I reiterate what has been said about the offering of facilities by the Opposition if the Government wish to amend the Act, so far as collection of levy is concerned. I hope that the Home Secretary will act upon that offer.
I believe that our first priority is to obtain for the public the fullest possible disclosure that is practicable about all the forms of gambling in which they are interested. Secondly, we should assure the public of the total honesty and integrity of gambling operators. By and large, gambling operators emerge well from the report. There are abuses but those who operate gambling on behalf of the 94 per cent. of the adult population who take part in it come out well. Therefore, when I say that there are abuses to be cleared up I am referring to particulars; I am not generally complaining about the integrity of the gambling profession.
On local lotteries, the Commission stated in its report:
the situation we have discovered is scandalous. There is wholesale disregard of the law which is inadequate and confused, commercial exploitation to a totally unacceptable degree".
If that is what the Commission found, the Home Secretary is bound to introduce legislation.
I take note of what has been said about how one-armed bandit and jackpot machines assist local clubs. The Commission was right when it said that the public using the machines are entitled to know the amount of money that is returned from the machines. I agree with the Commission that not less than 75 per cent. should be paid back. That would leave a handsome profit on which to run the clubs. The proposal would not require a great deal of bureaucracy. All that would be required would be for the Gaming Board to be satisfied that the machines to be installed conformed to the requirement. The question of the availability of keys is a straightforward criminal matter for the police.
I agree entirely with what has been said about casinos. Casino operators do not appear to have a friend in any part of the House—I am not surprised by that. We must ensure immediately that casino operators pay a much greater contribution to the Exchequer. My final comment on casinos is that it cannot be right that a casino operator who is found out and loses his licence is able to sell the casino and the licence. In those circumstances, he is making a profit out of the illegalities that he has condoned. That aspect needs attention.
The question of lotteries used as fronts for charitable organisations also requires attention. A number of hon. Members have referred to a betting levy evasion case. I think that all hon. Members have received representations from the Levy Board and an article in the Daily Mail reported that Ladbroke has escaped a £1 million levy payment. I do not know whether that is true. According to the article, the company is negotiating with the Levy Board. Most of us know that there was a change of company towards the end of the financial year which brought about the present situation. I hope that the Levy Board and Ladbroke come to an immediate agreement that the levy should be paid. The £1 million of levy was paid by punters in the belief that it would go to the Levy Board for the furtherance of the good of racing. The matter cannot be left. Money was collected for a purpose and was not paid over for that purpose.
Football has rightly occupied a major part of our discussions. The game has gone through a traumatic time recently, though I agree with the hon. Members who have said that the astronomic and ridiculous transfer fees now being paid by some clubs have not helped their case. When I was a Minister, it seemed that every time I went to see the Chancellor of the Exchequer about pool betting duty and such matters, a football club paid £500,000 for a player almost on the morning that I visited the Treasury. I did not find that a great encouragement.
We have changed the Small Lotteries and Gaming Act by an Order in Council to raise the limit from £750 to £10,000. As a result, Plymouth Argyle football club has been able to make a profit of about £500,000 in 18 months. That is just one example of how the change has saved third and fourth division clubs in particular. In addition, nearly all the first division clubs run successful lotteries.
It is ridiculous for the Royal Commission to recommend the abolition of the Football Grounds Improvement Trust. The pools promoters, with whom I negotiated the initial arrangement, should be given credit for entering it voluntarily. They agreed to pay 12 per cent. of their take from the spot the ball competition into the pool. In 1978, that went up to 20 per cent., though they have had to bring it down to 15 per cent. this year because of the impact of VAT on their business.
This year alone, £2¾ million has been paid out by the trust. There are four objectives which are important for us to note. One is ground safety, and a Conservative Member was right in saying earlier that when Parliament enacted the Safety of Sports Grounds Act it did not provide the money to do the job. Had the pools operation not been carried out, many clubs would have been in great difficulty.
Secondly, there is the need to improve general standards of amenities in our grounds, thirdly, the welfare of the players and participants in football and, fourthly, the question of using clubs, most of which are in the heart of our industrial conurbations, for community sport. I am glad to acknowledge this year that the trust has paid £250,000 to the Sports Council to assist in its community sports activity and another £250,000 to the Football Association for the same purpose. That is a magnificent achievement. Spending in the current year on clubs is £2,391,000 and might amount to more later.
Why do we want a football board? I have always been a supporter, although I acknowledge that the changes that have taken place have gone some way towards assisting the position. We want it because there should be a contribution from gambling to football. The Home Secretary, if I may say so with respect, did not seem to appreciate it. The levy on horse racing is hypothecation of taxation. It is a term about which I thought we would hear a lot, but it has not been mentioned until now. It is hypothecation of taxation when one has a bet on racing and agrees that part of that bet shall be assigned to the welfare of racing. I favour that principle.
If it is right to have hypothecation of taxation for horse racing, how is it wrong to have it for football, greyhound racing or other sports that prosper as a result of gambling? That is the question that the Home Secretary has to resolve. I consider the case irresistible. Once one asserts that it is important in the instance of horse racing, the case must automatically be accepted for football and everything else.
The Royal Commission did not find the standards of administration so good that they would leave the money to go direct to the football authorities. I think that the Football Association and the Football League both accepted that if there was a levy for football, as the Chester committee recommended 10 years ago, the board should be established. The pools promoters have told me on many occasions that they think they are excessively taxed at 40 per cent. I agree with them. If they could get a sensible reduction, they would agree, happily and voluntarily, to make their contribution in this respect.
On the modes of betting on racing, whether by bookmaker or Tote, I have always been against monopoly. Parliament was right when it established the Tote as an alternative form of gambling. If that is right, it must follow that those hon. Members, usually found on the Government side of the House, which is ironical, who ask for a Tote monopoly, must be wrong. The Tote has transformed itself. It is now three separate operations. This is how it has got itself into difficulties. There is now a Tote board which takes the money and fixes the dividend on the track. There is the Tote Credit which enables people to phone and place a credit bet, and there are Tote bookmakers trying to take on the bookmakers at their own game.
It is vital—we shall know when we get the report and this inquiry—that the declaration of dividends on the Tote must be sacrosanct. There must be no contribution of income after the race has started. The declaration of the result must be scrupulously observed. I hope that the Tote will undertake to do that. I hope it will continue to prosper and make, as it does, an increasing contribution to the welfare of racing.
Similarly, the bookmakers must understand—most of them do—that they have a contribution to make to the development of racing. The one case which has been mentioned is, I hope, an isolated case. I hope that that will be put right soon.
The main recommendation of the Royal Commission was the establishment of the British horseracing authority, which I have always strongly supported. I recognise that times have changed, not least because the Jockey Club changed its mind halfway through the Royal Commission's hearings. It is to be congratulated on changing its mind in those circumstances. It was the establishment of the Royal Commission that caused it to agree.
Whatever one thinks of the Jockey Club, its members are people of absolute integrity. I know of no one involved in racing who has a moment's qualm about the way in which they operate the rules of racing and the disciplinary code. However, if they are to continue with that function, I wish that they would broaden the base of their membership. If all the members come from one social stratum, the Jockey Club's position is undermined.
The advisory council must be dovetailed with the Levy Board. I agree that it should not contain any members of the Jockey Club, especially if the latter is to continue to run racing, as most people want. The chairman certainly must be independent.
I cannot see why bookmakers, who contribute most of the £14 million or £15 million a year to racing, cannot be found a place on that body. As the hon. and learned Member for Thanet, West (Mr. Rees-Davies) said, if this gets off the ground next year and has proved itself totally independent in about two years, those of us who think that the answer had to be a racing council will be happy to settle for something which is effective on those lines. I certainly do not approach this is a doctrinaire way.
I should like to see more representatives of the stable lads on the general council of this new body. One representative is not enough. People who earn their living in the industry and the trade unions who represent them are entitled to stronger representation than is proposed.
The Racegoers Club seems to have been chosen to represent the punters. Who joins that club, and how do they join it? If its representative is to be the punters' voice in racing, we shall need more information about it. Membership will have to be advertised much more widely and we should have much more detailed information. The club must be independent of all the other interests—the Jockey Club, the bookmakers, the Tote and anyone else—if it is to speak out genuinely on behalf of the customer, the public.
Returning to the terms of reference and the importance of the contribution of gambling to the furtherance of sport, I agree with my hon. Friend the Member for Normanton (Mr. Roberts) that we are moving into an age of much greater leisure. This will be brought about by technological change and by the demands of trade unionists, since it forms an increasingly large feature of the priorities laid down by unions. It is therefore odd that the Royal Commission decided to do nothing about evening racing and the opening of betting shop facilities for evening racing and entirely ducked the question of Sunday racing. Sunday is one of the most important days in the week for the working man—the one day when he can go out with his family and enjoy himself.
I hope that the Home Secretary will take those questions on board and note that widespread support was expressed in this debate in respect of those two matters.
There is also the question of taxation rationalisation, which the Government, especially the Exchequer, must consider. It is ludicrous to put a 4 per cent. tax on on-course betting, 8 per cent. off-course, 40 per cent. on the pools and 5 per cent. on bingo. That structure is irrational. If the betting taxation structure were rationalised, it would give sport a better deal and enable the Exchequer to receive an increased yield. That is of importance to the country.
Do not let us think that we are totally concerned only with those sports involved with gambling. We must contemplate the 61 other sports. We think of the possibilities of next year's Olympic Games. Many other sports have not been mentioned today, including athletics, swimming, cycling and boxing. There is also a wide area of recreation to which increasing numbers of people attach importance. I refer to camping, caravanning and people enjoying the open air, nature conservation, the delights of the countryside and national parks. Those must be paid for. When the Royal Commission was established, we hoped that it would tell us, in part, how to finance those increasing needs.
I congratulate the Government on inaugurating this debate. I hope that they will take urgent action on the priorities but will not neglect the other major social questions of our time.
I listened with great interest to the debate. The speeches ranged over a wide field, as did the Royal Commission's report.
First, I congratulate my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) on a first-class maiden speech. He knows a great deal about the Pool Competitions Act. He also spoke with compassion about the charities affected by it. I shall respond to some of his points later.
I endorse the tributes paid to Lord Rothschild and the other members of his Commission. One does not have to agree with all their recommendations to appreciate the immense amount of work that must have gone into the detailed analysis which they have provided of almost every corner of the gambling field.
I am sure that the universal view of this House—it was especially highlighted by the right hon. Member for Leeds, South (Mr. Rees), the hon. Member for Derby, South (Mr. Johnson) and indeed by the right hon. Member for Birmingham Small Heath (Mr. Howell)—is that an immense amount of readable detail is available in this important report for future consultation.
I shall attempt in a moment to respond to as many points raised in the debate as possible. But I should make it clear at the outset that at this stage the Government, and particularly my right hon. Friend the Home Secretary, who bears the main responsibility for considering these matters, are not in a position to announce decisions on many of the Royal Commission's proposals. This was not the objective of the debate. While the Government have already reached a view on some of the proposals—particularly those concerned with the administration of horse racing—the main purpose of the debate has been to enable right hon. and hon. Members to express their views, so that the Government are able to take them fully into account before coming forward with firm proposals for legislation which, as my right hon. Friend has already made clear, will not be in this Session. Hon. Members responded readily to that opportunity. I am glad that the right hon. Member for Small Heath congratulated my right hon. Friend the Home Secretary on initiating this debate today.
Before I reply to the points put to me I should like to say a few words about one of the subjects dealt with by the Royal Commission, which concerns me closely as Minister with responsibility for sport: that is to say, football and the pools. The Royal Commission's consideration of football pools was devoted mainly to a scheme for the financial assistance of football. My right hon. Friend and I have examined the scheme. Briefly, the Commission recommended allocating to football about 3 per cent. of the football pools stakes, with a corresponding reduction in pool betting duty from 40 per cent. to 37 per cent. It proposed the establishment of a statutory football board to administer the proceeds, which it estimated at about £7 million a year. It intended that the football board should absorb the work of the existing non-statutory Football Grounds Improvement Trust, on the assumption that, as it recommended, the Pool Promoters Association spot the ball competition, from which the trust gets its money, would be illegal. These proposals, particularly that for a new statutory football board, financed in effect by the Government, by public funds, through a reduction in the amount presently collected in pool betting duty, have aroused a great deal of interest, but have also attracted an equal and considerable volume of criticism.
Many people have questioned the justification for the creation of a new statutory body, financed from public funds, with the object of helping a major spectator sport which to many people, and to some clubs, does not appear to be conspicuously short of money to help itself.
Other critics have suggested that the Royal Commission's proposals though well-intentioned, do not take sufficient account of the existing administrative and other arrangements within football, and have drawn attention to the Royal Commission's own comments on these, in its earlier interim report—which has hardly been mentioned today—which seemed to be pointing to a different conclusion from that which it finally produced.
There are, therefore, many uncertainties surrounding the idea of a new football board, and, indeed, even the football authorities were far from persuaded that it was necessary or desirable.
The Royal Commission's proposal was closely linked with, and complementary to, its recommendation that the revenue currently going into football from the Pools Promoters Association's spot the ball competition should be cut off, by making illegal all such prize competitions. This suggestion, again, has attracted strong criticism, and, I am bound to say, very little support.
The Royal Commission's reasons for wishing to prohibit the spot the ball and other similar competitions were that they involve so little skill as to be virtually indistinguishable from lotteries, while not being subject to the controls applying to lotteries; that it is often impossible for competitors to discover if they have submitted winning entries; and that the results can be "rigged".
Many hon. Members have spoken about spot the ball today. My hon. Friends the Members for Brighouse and Spenborough (Mr. Waller) and Brigg and Scunthorpe (Mr. Brown) have both spoken about it in some detail. It may be desirable to establish some form of control over these competitions—possibly by having them supervised by independent accountants as already happens with the football pools—but we do not believe that the Royal Commission has made out a sufficient case for their abolition. We have borne in mind particularly that the Commission found that the Pools Promoters Association's competition maintains high standards of accuracy and security, and that the selection of winners is fair and impartial.
In considering whether such competitions should be made illegal, we have been very conscious of the generosity of the Pools Promoters Association, and the excellent work of the Football Grounds Improvement Trust, to which many hon. Members have paid compliments today.
The safety of sports grounds, to which the trust has contributed substantial amounts of money, is of self-evident importance. But the trust also co-operated in the initiative launched by my predecessor, the right hon. Member for Small Heath, and the Sports Council, in funding the "football and the community" schemes.
I have been to see a number of these schemes. My right hon. Friend joined me at Carlisle when I opened that scheme. I have also seen the new scheme completed at Notts County. I have been tremendously impressed by the determination of all those involved that they will make a real contribution not only by providing sports facilities where they are most needed, but a contribution towards the social objectives of involving professional clubs much more closely with their local communities.
Many of these schemes have brought together a range of local interests, and the input of money from the Sports Council or the Football Grounds Improvement Trust has been the catalyst to bring about a change in attitudes about the place of football clubs in society. This has been a change for the better and I hope to see it continue.
My right hon. Friend and I would like to see the spot the ball competition continue to provide much needed income for the Football Grounds Improvement Trust. To date, the trust has used the bulk of the income to assist football clubs in the first division of the League to carry out safety improvements necessary under the Safety of Sports Grounds Act 1975, and in similar grants to the international grounds these statutory safety requirements are being extended to teams in the second division. These are now to be designated, and I am sure that the clubs will be in touch with the trust about help in that area.
The trust, under the chairmanship of Sir Norman Chester, has demonstrated its willingness to move in the direction of helping both the community and the football clubs by giving £250,000 last year to the Sports Council to help with these schemes. If the growth of spotting the ball continues, I should like to think that the plans of the Pools Promoters Association will be reflected in a wider application of the profits from the competition to benefit football.
My hon. Friend the Member for Brighouse and Spenborough highlighted ways in which we should help raise the standard of the game from county level through to the League clubs. That is an admirable objective.
Before leaving football pools and football generally, I shall supplement what my right hon. Friend said about the 1971 Act. Many hon. Members have mentioned it, especially my hon. Friend the Member for Aldridge-Brownhills. As hon. Friends know, there are four notable sporting organisations and three football clubs—namely, Rangers and its associates, Celtic and Manchester United—plus Warwickshire County Cricket Club, along with three most important charities, which are covered by the 1971 Act. They have been allowed to continue their operations. They have been extremely worthwhile operations, especially those of the charities.
It was right that the right hon. Member for Leeds, South emphasised the difficulty of coming to a judgment between emotion and logic. There is a clear body of opinion that the special treatment cannot continue indefinitely. I emphasise again the valuable work done by these organisations and the importance to the sporting organisations of the income that they are receiving. The Government have no intention of allowing the 1971 Act to lapse until Parliament has an opportunity to decide in the context of lotteries legislation what changes would be appropriate.
There will be ample notice of any change. If there is change, I hope that all deserving causes will benefit. We shall bear carefully in mind the interesting comparisons that have been made between football pools and charities covered by the Act.
We have had a whole host of inquiries from hon. Members about racing and lotteries. I shall try to answer as many as I can as quickly as I can. The right hon. Member for Leeds, South introduced a number of most important topics. Most of those matters were picked up by my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson) and the right hon. Member for Bermondsey (Mr. Mellish). We were immediately intrigued by the generous offer of help with legislation to tidy up the collection of the levy. We shall consider that extremely carefully.
The parliamentary timetable is now extremely tight, but with good will on both sides, and perhaps a little encouragement from another place, we shall do all that we can. No promise is being made, but we shall endeavour to make progress, especially bearing in mind the offer of my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) to draft the legislation for us.
We are told that the parliamentary timetable is extremely tight and that we shall be kept here until September. Then we have whole days when nothing happens in this place, and the House rises at 12.30 p.m. on one of the busy working days. Is it not time that the Government said that their legislation is not ready, that half the things they are threatening to do are to be done by order and regulation and that there will not be the massive rush of legislation with which we are threatened?
The hon. Member is not being terribly clever. With his vast experience, he knows the position perfectly well. He ought to be saying "Thank you" to my right hon. Friend the Leader of the House for arranging the debates that we are having on various reports, not only today but in the coming weeks. There will certainly be no opportunity in the next 12 months for major legislation on what we have been discussing today.
What was most welcome—and, indeed, expected—was the universal praise for those who have been involved in racing administration, and especially for the Jockey Club. This was highlighted particularly by members of the all-party racing group which has been in close touch with the Jockey Club for some years, during the period of the Royal Commission and before. The respect and integrity with which the Jockey Club is held by hon. Members is most impressive. The right hon. Member for Bermondsey mentioned the fear with which the Jockey Club was regarded by those involved in racing. I began to wonder whether the senior steward must be equated with the Chief Whip.
During the period of the Royal Commission, all the other organisations in racing, in the broadest sense, have been involved, such as the Levy Board, the Gaming Board and the Tote. They played their part in reaching the conclusion that has come out of all this hard work. I have in mind also the many other sides of racing, such as the Bloodstock and Racing Industry Confederation, the Racing Industry Liaison Committee and the race course owners. They have all buried many hatchets and seen that a universal approach to the problem was the right one.
The general welcome given to the report has shown that the good will generated throughout the industry has been worth while. I am confident that by 1 January any small outstanding difficulties will have been ironed out, that a chairman will have been appointed to the horse racing advisory council, that it will be in being and will be the beginning of a long and constructive partnership with the Jockey Club, the Levy Board and the Gaming Board, for the benefit of the industry generally.
Several hon. Members mentioned Sunday racing. My right hon. Friend the Home Secretary indicated that we did not propose to have a general inquiry into Sunday sport. I do not think that that would be advantageous at the present time. It was interesting that so many hon. Members seem to be keen on Sunday racing. The key issue here is Sunday betting, because that is illegal. If we were to have Sunday racing, even with on-course betting, which would need major legislation, that would surely open the doors to illegal betting elsewhere. I do not think that the case has been made out at this stage for legislation to make betting legal on Sundays.
Other hon. Members rightly raised the issue of VAT.
I have not overlooked the hon. Gentleman's point and will deal with it when I have finished my remarks on horse racing.
I was about to deal with the issue of VAT. As a member for a considerable time of the all-party racing group I have learned the strength of feeling of Members in this House. The position, frankly, is that the Irish and French are out of step with the EEC's sixth directive on harmonisation. It is for them, in the first instance, to get into step with us. My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) told me that he had been to see Commissioner Burke 10 days ago and discussed this matter with him, following up the protest we made on 15 May relative to VAT and the position of the French and the Irish relative to bloodstock generally. We hope that in the near future we will get harmonisation and the whole issue resolved.
I mean harmonisation in the sense that we are all on the same wavelength. A number of hon. Members have raised the question of duty on on-course betting. This is basically a matter for my right hon. and learned Friend the Chancellor. It may be an exaggerated point bearing in mind the relatively small proportion of a day's racing that would be covered by the duty at the present time.
The hon. Member for Normanton (Mr. Roberts) and the hon. Member for Walsall, South (Mr. George) both raised the issue of greyhound racing. Their speeches indicated that there were problems with the GRA and the new federation and that this point should be looked at carefully. However, hon. Members should not overlook the point that my right hon. Friend the Home Secretary made, that, when there was time for legislation, he would move towards extra days and meetings which should certainly go a long way to solving the problems of greyhound racing.
A number of hon. Members raised the issue of lotteries and the right hon. Member for Leeds, South asked whether it would be possible to publish the many comments on the Royal Commission. We are certainly prepared to consider issuing a summary some time before major legislation, but it would be a major task to publish all the comments. He also raised the issue of lottery regulation which would follow upon a study of the consultation papers recently issued. I am sure that there is only limited scope in changing the regulations without legislation. However, if and when those changes are introduced and when we have had a look at the result of the consultation, they would come to the House by way of a negative resolution and there would certainly be ample opportunity to discuss them.
Some hon. Members have raised constituency points concerning miners' welfare clubs and similar institutions. It is not our intention to allow police access to such clubs without a warrant. Everyone should be quite clear about that. My right hon. Friend the Member for Crosby (Mr. Page), whom many hon. Members rightly call "Mr. Lottery" and who had my support when he was beavering away on the legislation in 1975, made, along with my hon. and learned Friend the Member for Thanet, West, many suggestions about trying to ensure that there was a code of practice for those administering lotteries. This seems a sound idea deserving of careful thought, because if we could take those people with us, in the face of legislation, it might reduce the necessity for the depth of legislation that some hon. Members have suggested because of the criticisms in the report. That is a valuable idea. We shall look at all those comments on lotteries most carefully.
We also had interesting comments on casinos, particularly from my hon. and learned Friend the Member for Thanet, West and the hon. Member for Blyth (Mr. Ryman). They were concerned about the powers of the Gaming Board and they put forward many technical points relating to casinos. All these matters will be carefully considered, whether by my right hon. Friend or by my right hon. and learned Friend the Chancellor. I am not quite sure whether I agree about casinos being for the tourists. Whilst there may be some latitude, tourists must comply with the 48-hour rule before they can go to a casino to gamble.
My right hon. Friend asked for comments on tracks, but none was forthcoming. I suspect that it would be ignominious for Lords and the Oval to be called tracks in legal terms.
One of the key issues of the debate was that of a national lottery. My right hon. Friend came here with an open mind to hear the debate. I have also listened carefully. By and large, remarkably few Members have spoken in favour of a national lottery. The right hon. Member for Small Heath said that a large number of sports were not covered by local lotteries. However, he should bear in mind that all sport would achieve some benefit from the many small lotteries held today. If there were a national lottery, the funds would be dispensed by the suggested body which would be under extreme pressure from a whole host of good causes and that might not be to the benefit of sport at all.
On the whole, the weight of feeling from the debate appears to have been that a national lottery would be far too competitive with local lotteries which, given their failings at present, will be improved by legislation. I think that at this stage we should press on and encourage and improve the administration of local lotteries rather than move to a national lottery which would need major legislation and be highly controversial.
The great advantage of the debate has been the breadth of opinion which has been expressed by many hon. Members on both sides of the House. We shall certainly discuss most carefully with our colleagues all the points which have been made. When the appropriate moment comes, either for regulations or for future legislation, we shall take into careful consideration the expertise that has been displayed by hon. Members today.
The tone of the debate was sparked off by the high quality of the Royal Commission's report which, as I said initially, will virtually be a bible, as it were, against which to compare any gambling document for years to come. There is an immense depth of detail in the report which will no doubt be used as a major reference work whenever we come to consider legislation.
The final point that I should like to make was highlighted by the right hon. Member for Small Heath at the end of his remarks. We are entering a period of additional leisure as the years go on. We want all sport and recreation to benefit as much as possible from lotteries, sponsorship and other forms of income. What we have discussed today and, between us, almost decided, bodes well for the future.