Lord Lipsey
Main Page: Lord Lipsey (Labour - Life peer)Gambling (Licensing and Advertising) Bill
Lord Lipsey Excerpts(10 years, 11 months ago)
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Viscount Falkland (CB)
My Lords, in the absence of the noble Viscount, Lord Astor, I speak to this amendment, which is not brief but is logical. I hope I can persuade others it is logical that when we extend the area of tax we expect to online betting, the levy should benefit accordingly from the benefits that the bookmakers get from their increase in betting online. Noble Lords will realise that the levy fall has had a grave effect on the finances of racing. Among the causes of the fall has been the move to online betting by people who back horses and the fact that no levy comes from that source. There are all kinds of other reasons why the levy contribution has fallen. As regards the popularity of betting on horses, since the 1960s when the law effectively changed to introduce betting shops and so on, the fall has been gradual but the amount of betting has not in any way declined. It has just been spread over a wider area of gambling opportunities and is not likely to change favourably for racing in the foreseeable future.
I urge the Government to consider the logic of what I am saying. If the bookmakers find this unappetising and unacceptable, I suggest they realise that racing is threatened. The sport has existed in the form we know basically from the early 18th century. It has a worldwide reputation and its brand is unequalled. We really cannot afford that to change because bookmakers do not feel that they should contribute towards the sport from which they profit. I do not want to get any more e-mails from bookmakers, which I expect noble Lords also have been getting, saying how lovely betting shops are with their daffodils and how they are places where you can take children. Of course they are not like that.
As we all know, in those shops there are four gaming machines. They are called fixed-odds betting terminals, which is a euphemism and nobody understands what it means. They are casino machines. You can play poker, blackjack and so on. In most betting shops, they are a main contributor, if not the major contributor, to the bottom line of the bookmakers’ accounts.
I do not want to be rude about bookmakers. I did that once in the House. It was covered by what I can only call a pornographic newspaper, the Daily Sport. I had the privilege of removing the ladies in compromising positions on the front of the Daily Sport to find that my face was very large on the front of the paper under a heavy headline saying, “Falk Off!”. I have to tell you that that newspaper is displayed in a prominent place in my house. However, if noble Lords will allow me, I will say to the bookmakers through this Committee that if they do not play ball on this we will take away the machines—simple as that. The previous Government did not seem keen even on looking at the machines although, in opposition, most of the complaints about betting machines come from the Labour Party—I hope that the noble Lord, Lord Stevenson of Balmacara, will take note of this—and I agree with them. It is no good the bookmakers saying that there is no danger to people who go into betting shops in terms of social damage from increasing their gambling habit. It is a fact that it does that, but the bookmakers deny it.
I think it will be quite some time before we get those machines removed. I see no evidence of movement on that; other noble Lords may be able to disabuse me of that. If the bookmakers do not play ball now, such is the threat to racing that we have to find ways of putting pressure on. Maybe they have suddenly had a change of heart. If they agree that they should pay a levy online, we will have to find other ways, but if they do not agree we should consider asking the Government to tell them that the machines will be removed—simple as that. Others may not agree, and bookmakers certainly will not, but that is it.
That is what this amendment is about. I hope that the Government can make an encouraging response, because the other day we all had the benefit of listening to the new head of the horseracing authority. I was impressed by his general approach. His is a fresh look at racing, because he comes from outside it. He made this important point about this wonderful sport that we have exported to the rest of the world: what other activity is there, half of which is extremely profitable, in this case the breeding industry and the bloodstock agency in particular, and the other half of which—the racecourses and the people who work in the racing industry—is having a very bad time? It is about time that the Government took steps—many of us are keen to work with them and talk to them, together with the horseracing authority—on how they can get a balanced view of that and get racing back into the position where it deserves to be and is properly funded.
Lord Lipsey (Lab)
My Lords, nobody is going to tell the noble Viscount, Lord Falkland, to “Falk off” this afternoon because he is doing a noble thing. He sees the levy lying nearly unconscious on the sidewalk and rushes up to offer it mouth-to-mouth resuscitation. In that way, he offers the Committee a chance to discuss the levy and its future; I, among others, am grateful for that. However, I cannot support his amendment, and I am afraid that I am going to detain the Committee for a few minutes in explaining why.
I shall start at the technical end. It is not clear that the amendment would not constitute state aid in European terms, and state aid that would not be allowed. The recent French judgment on state aid has been much misunderstood. The Commission did not rule that the activities of the pari-mutuel in France were not state aid. It did rule, however, that it was legitimate state aid. What we have yet to determine is whether a similar ruling would apply were we to extend the levy in Britain, in the way that this suggests, to overseas betting. That judgment needs to be studied carefully and the views of the Commission need to be sought. It would be premature—indeed, I would say provocative—to seek to advance at this stage. On those minimal technical terms alone, I would not support the amendment.
A broader question is going to constitute the majority of my remarks. The Government have for some time been looking, and still are, at the future of the levy. There are all sorts of notions about the levy, from the kind of notion put forward by the noble Viscount, Lord Falkland, that we should extend its scope to the whole question of a sporting levy in general for sporting betting rights, to, at the other extent—and I am about to expand on this—the abolition of the levy. All these options are rightly open at the moment and still being reviewed. The Government have lurched to and fro for rather a long time on this, and changes in Ministers have meant changes of attitude. This is certainly not something that we should rush into. The levy has been about for 50 years, and for most of that time it has served its purpose. We ought not to go into a decision about its long-term future without careful reflection and analysis of the alternatives.
Having said that, I make it clear that I am in favour of the abolition of the levy. I have been for 25 years. I first wrote a leader on this subject in the Times in 1991 or 1992, and I have consistently never changed my mind about it. The only thing is that in those days, and indeed when I came into this House, I was in a minority of one. There really was not anyone else, in this House or another place, who favoured the abolition of the levy. That is not so today. Some of the most knowledgeable people about racing in the House of Commons take the view that the levy should go. I think of Mr Robertson, the chairman of the horseracing, betting and levy group, and Philip Davies. These are all opponents of the levy. They may or may not be right—indeed, I may or may not be right—but they have a view that ought to be carefully weighed.
I am an opponent of the levy for two sets of reasons, and they consist of being an economist and a socialist. The two do go together—in some people’s minds, anyway. First of all, I shall expand on the economic case. Throughout the world, including in a lot of countries that were once communist, there is now a strong understanding of how very bad subsidies are for industries. When I look at racing, I do not see an industry that has been brought low because it has not had enough subsidy; I see an industry many of whose flaws stem from the subsidy that has meant that every time, instead of sorting out the fundamental problems of the industry, people have asked someone else to pay for them through the levy. For years we have had a situation where the bookmakers and racing were at loggerheads, because racing was seeking more money out of the bookmakers and the bookmakers were seeking not to give it to them, when they should have been working together to grow the size of the cake by looking to their mutual interests and advancing those.
The multiyear settlement this year was a tremendous step forward, and the great improvement in the climate of relations between bookmaking and racing is also an extraordinarily encouraging development. I hope, however, that it could go still further: I hope that within a year or two the levy will simply seem to be an unnecessary mechanism. I am certain that no one would cheer louder in that case than Her Majesty’s Government. An absurd situation has arisen in recent years where at midnight one night negotiations break down and a Minister of the Crown is asked to decide how much money one industry should give to another in subsidy. That beggars the imagination. If anything other than racing were involved, it would be recognised that it beggars the imagination.
Lord Lipsey
I am sorry to interrupt the noble Viscount, especially as his point about the yacht-owning, horse-owning aristocrat made my point so much more eloquently than I did myself. Perhaps he has not entirely followed the full detail of my argument. I spoke as a socialist, not as a non-socialist—I am so sorry to disappoint him. I would have bought my share in Robber Baron had there been no prize money, just as willingly as I did when there was prize money. Anyway, we did not get anywhere near that prize money very often. I suggest not for one second that there should not be prize money, but that it should come about as a result of the commercial business of racing, supported by the bookmakers for commercial purposes, not by a compulsory tax on poor betting-shop customers.
Viscount Falkland
We shall discuss that outside the confines of this Room, I am sure.
The only other point I have to make is in answer to the noble Lord, Lord Clement-Jones. I have thought of a definition of “parafiscal levy”: I think it is a soft tax. Having said that, I thank everybody for their participation in this debate, which has been an interesting one, and I hope that over the coming months we can have further discussion on it. I beg leave to withdraw the amendment.
Lord Lipsey
My Lords, the noble Lord, Lord Browne, began his speech with a number of statistics about gambling. I do not want to speak about self-exclusion but I would like to take a minute or two, if I may, to speak to the Committee about gambling statistics.
In preparing for this afternoon’s debate, one of the most depressing things was to follow the various statistical claims made both by those who are generally pro-liberalism in gambling and those who want a crackdown and to see a degree of statistical distortion that I can rarely remember coming across. As my exhibit A, the Guardian says:
“According to researchers while the number of people addicted to the gambling”—
that means FOBTs—
“represents only 1% of the total number of gamblers, such is the extent of their habit that they contribute up to 50% of industry betting revenue”.
That must be false. There is a piece of research that governs how much they contribute, and it says that 23% of profits from FOBTs come from problem gambling, so the other 77% is not from problem gamblers, which knocks the Guardian’s statistic on its head without further help. However, that piece of research is itself a bit peculiar because it uses a sample of only 25 problem gamblers, and would be subject to orders of magnitude of error.
Lord Lipsey
My Lords, like the noble Viscount, Lord Falkland, I do not very often have a bet these days. I, too, am a problem gambler, except that my problem is that my horses lose more often than they win. But I am not anti-gambling in any sense. I declare an interest as a member of the Starting Price Regulatory Commission. I have been involved in all four racing disciplines—greyhounds, harness racing, point-to-pointing and National Hunt racing. Indeed, I have written a whole novel about betting, Counter Coup, which is out this spring. Please queue to buy it; price to be fixed.
Having said that, I admit that I am not very keen on FOBTs. If horserace betting is the full sexual intercourse of the betting world, FOBTs are a form of masturbation. It is a solitary activity about which people do not chat in the shops or have a communal experience. They just go on on their own in a way which I think is rather dehumanised.
Having been involved in the discussions on the 2005 Act, I do not think for a moment that Parliament would have considered allowing these machines if it had known that they would, as they do now, account for around half of betting shop turnover. The deal is now shrouded in history but basically they were supposed to be a little top-up revenue for the bookmakers in return for which the bookmakers would put extra resources into some good things, including tackling problem gambling. Instead, they have become the dominant product in betting shops, which I regret. It is tempting to go on from that and to say “Ban the bloody things” but we in this House should be very wary about banning things that people like doing even if we disapprove of them doing it. We found that with the Hunting Act, which has proved to be such a tragic mistake. The noble Viscount, Lord Falkland, is not here to appreciate me saying yet again “as a socialist”, but I add as a socialist that it would be a great pity if a great fuss was made about fox hunting, which is basically a sport for people wearing pink jackets and uniforms, and an activity much liked by people who wear cloth caps was banned simply because no one was standing up for it.
Lord Lipsey
As I was saying when I was rudely interrupted, I am quite pro-gambling and quite anti-FOBTs, but I would not ban them.
The third thing I wanted to say was that—and I have had good friends in and good relations with the bookmaking industry for many years—I am frankly disappointed with its reaction to the increasing social concern at the rise of FOBTs. I make no secret of the fact that I have had a number of meetings with bookmakers at which I have pressed on them the desirability of making a concession voluntarily—my preference would be to reduce the £100 limit on bets—as a sign that they are genuinely concerned about this. I know there has been a bit of flapping about with measures to deal with self-exclusion.
Overall, and it pains me to say this, I have been reminded rather of the tobacco industry in its dying days, except now we are all alert to the tactics that it used. I do not think that the bookmaking industry is helping itself, and I very much hope that even at this late stage it will come forward, more positively recognising the scale of the problem that it faces, recognising the political consensus that now stretches from David Cameron to Ed Miliband that something has to be done about it, and working positively in a way that enables a solution to be found without more conflict.
The amendment is designed—I hope—to be probing. It is a long way from clear yet that a local authority-based scheme for licensing is the only way of tackling this problem. I have a considerable concern about what happens when you have one local authority that allows, let us say, eight FOBTs per betting shop while the authority next door allows none. That will lead to a huge proliferation, beyond anything that we have seen so far, in the “Come here and fill our slots” borough and none at all in the one run by the Liberal Democrats.
This needs further looking at. Local authorities’ planning powers, which are not covered by this amendment, also need looking at in order to find a robust policy. A measure of localism has a great deal to be said for it. It is also necessary that any scheme that we eventually come up with also embodies a strong measure of statutory guidance that sets the basis of the argument.
Most of all, I hope to see the consensus that exists now in the political class and among politicians spread more widely to the bookmakers, to the betting industry and among the public. I hope to see even more concentration on methods to exclude those who abuse this form of gambling. I also hope to see a frank recognition of the reality and not just a single-minded focus on short-run profits, because if the bookmakers focus entirely on short-run profits they will find in the long run that they make much less money.
Lord Clement-Jones
My Lords, I am glad we are having this short debate today. It is quite interesting that this has become a topic of current debate. I followed closely the debate that took place last week in the Commons on the subject.
I notice, and indeed I regret, that the noble Baroness herself does not express any regret for the legislation that was passed in 2005. After all, it was the Labour Government who introduced these FOBTs, and now we have had the proliferation of what appear to be highly damaging and addictive gambling machines in our high streets. Prefacing remarks along those lines would have been quite useful, because they were clearly introduced by that legislation.
However, I share her concerns about these machines. Indeed, it is all very well for the noble Lord, Lord Lipsey, to say what he said, but we have been warning of the dangers of these machines ever since the passing of the 2005 Act because we thought that it would lead to the proliferation of these high-stakes machines. I will come on to the level of stakes in a minute because that is one of the key issues surrounding them.
Even though there is, in a sense, a cross-party view about the impact and danger of FOBTs, there is a level of disagreement because some of us feel that the evidence is already there that they are addictive, and that something should be done in the very short term. I am not going to adumbrate all the research that is out there but it includes that from GamCare, the Salvation Army, the National Problem Gambling Clinic, the Campaign for Fairer Gambling, Professor Gerda Reith at the University of Glasgow and even the European Journal of Public Health—a series of different reports can be prayed in aid to show that these machines really are a source of problem gambling, and that the problem is rising over time.
Clearly, the evidence is disputed by the Association of British Bookmakers; I am sure that we have all had its briefing, which heavily disputes some of the points that are being made about FOBTs. The association questions the validity of the evidence put forward by the British Gambling Prevalence Survey, for instance, and so on. The Government did not have much of a choice other than to say, “Right, let’s remit this to the Responsible Gambling Strategy Board and see what comes out of that”. I very much hope that that will be conclusive on the matter and lead to further action, although probably not through this Bill because I do not believe that any of this needs primary legislation. I do not believe that it is the planning system that is essentially at fault here. We heard during the Commons debate last week that Southwark Council is employing perfectly proper legal means to restrict the further spread of FOBTs and betting shops in its borough, and that sort of remedy is open to other councils to adopt.
I do not think that it is about that side of things; a lot of this problem boils down to stakes and prizes—something that can be remedied very straightforwardly by political will through secondary legislation, through regulations and through altering the stakes. At the moment you can put in £100, which is a huge amount of money for these machines in the high street. Some of the campaigns are saying that this should be reduced to £2—I think that that is somewhat drastic—but I certainly hope that when the Responsible Gambling Strategy Board reports it will make a recommendation about the appropriate level of stake that should be the limit for these machines. That will go a long way towards making sure that they are no longer as addictive as they currently are, and will also mean that bookmakers have to think very carefully about the profitability of their premises and we do not have the kind of proliferation that we appear to be having as a result of the ability to install these FOBTs. I appreciate the subject having been raised and I share the noble Baroness’s concerns but, ultimately, I hope that quite soon we can adopt a remedy by secondary legislation that could be relatively straightforward.