Examination of Witnesses (Questions 240
- 259)
THURSDAY 16 NOVEMBER 2000
MR STEVE
ROBERTS, MR
ROGER WITHERS
AND MR
RICHARD BOARDLEY
240. You are regulated by the Home Office, but
you are not established by the Home Office, you were not set up
by government, by Parliament, were you, whereas the National Lottery
was?
(Mr Boardley) Surely, just because one approach is
set up and governed by this place, as you say, and others are
commercial ventures, it does not necessarily follow that one should
be treated less favourably than the other.
Mr Maxton: Well, personally, I do not
agree, I think the National Lottery was established to raise money
for good causes. That was its purpose, that was what Parliament
wanted it to do and, to be quite honest with you, I think therefore
it should be treated much more favourably than most organisations
which are running their organisations for profit from gambling.
Chairman
241. That is very good Socratic questioning
we have just had. I would like to ask you about another aspect
which certainly concerned me. I think that concern has been justified.
Last week when we were in Watford visiting Camelot we heard of
800 jobs possibly in danger there, obviously that is a matter
of concern, but when we first saw you, what we were concerned
about to a considerable degree was employment, particularly on
Merseyside, in the pools. The statistics you provided for us showed
that the impact on employment has been catastrophic.
(Mr Roberts) Yes.
242. Just as your turnover has been reduced
by an extraordinary amount from £988 million to £170
million a year. Mr Maxton may be justified in saying "That
is a commercial risk" but the employment in the pools, which
was 5,600 before the Lottery was established, and in an area of
very high unemployment, has fallen now to 700, which is below
even the number of jobs under threat in Watford if Camelot were
to lose the licence. Now, that is all happening and my guess is
that your worst fears have been turned into reality by that. As
I say, Mr Maxton speaks very fairly from the point of view that
you are commercial organisations and you are in a market and you
take the risks. What has happened, so far as you know, to the
people who have lost their jobs in the pools industry? Have they
been able to find new jobs? Has the general increase in employment
over the last three years assisted in that? Explain to us what
has happened because that is a lot of jobs to have been lost in
a pretty short time.
(Mr Withers) I would suggest, and I think you well
know, Chairman, that the unemployment situation in Liverpool is
not as good as the national average and certainly we have apocryphal
evidence from ex members of our staff who had worked for us for
20, 30, 40 years, who unfortunately found themselves at that stage
of their life where they found it difficult to find employment
and got into this twilight area of they are not old enough to
draw their pension but they cannot find other employment. So apocryphally
we know of many examples where our members of staff cannot find
work because, in fact, Liverpool has had a continuing series of
difficulties. Certainly, 1994 to today seems like a long time
in some respects but we know it is not a long time. The real job
losses probably did not start until 1995 and most of them were
really over by 1998. We are still losing people, very sadly we
are still losing people, and we hope, Sir, you will help us redress
some of that. Even Mr Maxton will help us on that one. Over those
three to four years we lost 5,000 jobs between us and, frankly,
we know a lot of those people just could not find work. A lot
of them, of course, were second wage earners in a family, it is
quite true, but second wage earners were essential because neither
of them had a very high paid job. We have now got one wage earner
in a family and the income has been halved.
Mr Maxton
243. I accept that and obviously we are concerned
about jobs. Can I just ask, however, is it not true that jobs
in your industry were already declining as a result of introducing
technology which allowed the scanning of the pools documents?
How much of the decline has been as a result of you introducing
new technology rather than just entirely down to the National
Lottery?
(Mr Roberts) Prior to 1994 our turnover was growing,
it was growing at roughly the rate of inflation. The turnover
was growing and growing steadily.
244. Was the number of employees going up or
down?
(Mr Roberts) The number of employees was remaining
constant and we found better ways to process that volume of coupons.
It is true to say every company looks to introduce new technology,
to become more and more efficient. The scale of loss that we both
suffered is something that you would not like to go through ever
again in your working career.
245. I accept that.
(Mr Roberts) We have gone from 1,060 people down to
145 people. I would like to echo lots of the things that Roger
has just said. There are lots and lots of long serving people
at Vernons who have lost their jobs and will never find another
job. They have all done 20, 30, maybe 40, one lady even 50 years'
service with the company and that has been an enormous drain on
the local community.
(Mr Withers) Can I just add a little thing on the
technology here. We have a slightly different situation between
us in terms of the way we operate the business. We have got 30,000
door to door collectors. We did have 65,000 to 70,000 door to
door collectors, we have now got 30,000. Every one of those has
hand held terminal technology in their homes and in their hands
every week. The technology has made their jobs more modern. We
all remember the supermarkets before there were laser check-outs
and so on and so forth but that has not cost a single job. They
are all part-time jobs, I accept, but that technology has been
very good and it has not cost a single job.
246. Not even where it is put in?
(Mr Withers) No. The checking of coupons really is,
I would hate to admit it, quite similar to what it was a few years
ago.
Chairman
247. I believe that indeed the line of questioning
of Mr Maxton was very important because what Mr Maxton said was
that Parliament created this Lottery. Parliament created this
Lottery not on a level playing field which undermined your activities
to a very considerable degree. Now the Lottery exists and nobody
is going to abolish it, whoever gets it. Again, I suppose it is
a have you stopped beating your wife question. Do you believe
that Parliament, having created the Lottery, ought to accept responsibility
for the social, economic and employment consequences in your area
of the effects of the Lottery?
(Mr Roberts) I think Parliament can help us because
the rate of taxation we pay in the industry is 17½ per cent,
pool betting duty, that compares with the National Lottery's 12
per cent and general betting duty which is 6.75 per cent. I still
think there is an awful lot that Parliament can help us to reinvent
ourselves.
248. Those are points we will take account of.
(Mr Withers) I think, Chairman, we are great supporters
of the National Lottery. We were trying to think of ways we could
ask you for your help which would not damage this very essential
social and financial institution which has been created. As Mr
Roberts has mentioned there is the betting duty. Also we are beset
by silly little rules which we hope you will be able to cut through.
For example, we are not allowed to retail online in an unfettered
way. You cannot go and put a football coupon down a terminal,
even if we had one in all retail establishments. We need a clarification
of the regulation to allow us to do it. You certainly cannot do
it in pubs and clubs, it is a bit grey as to whether you can do
it in a corner store. We heard from the people who sell Lottery
tickets in the convenience stores this morning, and of course
the vast majority of them do not have the National Lottery, because
there are a heck of a lot more than 35,000 of them. We would like
to be able to put our coupons in an automated way into those stores.
We are not really allowed to do it. Our retailers are not allowed
to pay out small prizes, so if somebody wins £10 on the pools
we have to send them a cheque. We cannot say "Well, you bought
your ticket at your local corner store, here is your £10".
We think those sort of silly things you could help us with in
clarifying the law. Maybe it is the job of the Gambling Review
Body but I am sure you will give them a good steer on this.
249. All that is very important. I wonder if
you could itemise this because I have been looking at the memorandum
you sent us, the executive summary, some of the points you have
mentioned but some others you have not. For example, the ban on
putting money on the pools online, I do not see that in your summary.
Perhaps you could look again at what you sent us and send us a
list of points. I am not necessarily saying that we will accept
them as recommendations but we will certainly consider them.
(Mr Withers) Chairman, we will be delighted to do
that.
Ms Ward
250. I do think that will be very helpful because
it leads into my next question which is you have lost all of these
jobs, they are not coming back, are they, so what is the future
for the pools, whether that is Littlewoods or Vernons?
(Mr Roberts) We are looking at new product development.
That is something we have continually looked for. We have obtained
a Section 6 National Lottery Licence and we invested heavily in
that, unfortunately it did not work. We have also launched a new
game based on the Irish National Lottery which enables us, as
a pools company, to get our customers to bet on the National Lottery.
We would love to have the same opportunity on the UK National
Lottery, to allow our customers to bet on that as well. So, new
product development within the area of what the Chairman has just
said, relaxations would certainly help us to grow the business
and re-employ people in our area.
(Mr Boardley) I think that is right. I think there
is diversification which we are obviously getting into. There
are still restrictions, I apologise but it is a different point
from the one that was made earlier, on football itself. For example,
what we can do on football with the football pools is prescriptive.
We can only operate the pools on football. There has to be more
than a certain number of games that constitute a coupon so it
is beset with problems. Our ability to expand and develop the
football pools' product is limited.
251. Littlewoods, would you see Littlewoods
going into more of a partnership with the National Lottery in
future if you could?
(Mr Withers) Yes, indeed. I am sure you have read
the bids for the National Lottery and you will see that in the
same way that Vernons had worked with Camelot previously on the
Section 6, Camelot have indicated that if they do win the franchise
again they will develop with Littlewoods a game based on football
to apply for a Section 6 Licence. Yes, we know football is very
popular, we think Littlewoods and, indeed, Vernons have a good
reputation for football and we would like to build on that with
the National Lottery. We would also like to go further than that,
which will need slightly more than a regulatory change. Whilst
we do understand the concerns that people expressed earlier about
having too many things down a National Lottery terminal, too many
types of transactions, we would like to see football pools acceptable
as a coupon via a National Lottery terminal. We do not have a
7.30 deadline on Saturday night, ours is three o'clock. We would
not be giving them logistical problems.
252. Littlewoods has an agreement with Camelot
for the future should Camelot win the licence. Does Vernons have
an agreement with The People's Lottery?
(Mr Roberts) No, we do not.
253. Neither of you have had any discussions
with The People's Lottery?
(Mr Withers) We have had outline discussions with
them. We could not put a Section 6 outline application in both
bids.
254. So you made your choice?
(Mr Withers) We made our choice.
Mr Fraser
255. Just one point: is perhaps the lack of
appeal of the pools versus the Lottery simply that to do the football
pools is far more complicated than it is to punch in your numbers
for the National Lottery?
(Mr Withers) There is certainly credence in that.
Mr Fraser: I tried to do it knowing you
were coming and I gave up.
Mr Maxton: That is because you are an
MP.
Ms Ward: And a Tory one.
Mr Fraser
256. I might like to add in a non-political
way that I talked to some constituents in a convenience store
in my constituency and I asked whether they do the pools or whether
they do the Lottery and they all said the Lottery. I am putting
that to you because I talked to people, I wanted to find out how
you do the pools. It is not easy. Lots of people find it a lot
easier to tick six numbers and then it is done.
(Mr Roberts) Obviously there is a lot of credence
in that statement. There are an awful lot of our customers who
like the complicated perms and plans and like the involvement
of picking their teams and using skill and judgment in making
their entry. Although we have tried to simplify the coupon you
have to be very careful you do not alienate your core customer
base and, therefore, you finish up losing both sets of customers.
257. Is that not the conundrum you are in, that
balance?
(Mr Roberts) It is very difficult.
(Mr Withers) Technology can help us. Again, I think
if we come back to the point, there is a fundamental difference,
the pools still remains a game of skill, it is not a lottery.
It may be fairly close but technically and legally it is not a
lottery.
258. Depends who is playing.
(Mr Withers) It is not a lottery.
Mr Maxton
259. Any one of you could do the pools every
week. You are not allowed to.
(Mr Boardley) I am not allowed to, my wife does.
(Mr Withers) I used to do the pools.
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