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14 Mar 2007 : Column 83WH—continued

Mr. Field: If we look beyond sport, it might be argued that some of us would know a by-election or general election campaign result half an hour or so before it became public knowledge. I doubt that the result in Cities of London and Westminster or in Livingston would be so important that tens of thousands of people across the nation would want to bet on the outcome, but a small number of insiders would clearly be aware
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of the result before it was publicly announced, and it could be subject to ongoing betting.

I appreciate what the hon. Gentleman says, but it is only fair to put on record the fact that Betfair is the only operator that alerts its customers to the potential for picture delays. It includes a health warning when it advertises its spread betting and its various other options for betting on events, and that alert takes the form of a clear notice on the screen showing each of the horse racing markets in which Betfair offers the in-running option.

In September 2007, as has been pointed out, the Gambling Commission will become the regulator for all gambling in the UK. That is a positive step forward. One of the commission’s regulatory objectives will be to ensure that gambling is fair and open. Logically, therefore, it falls within the commission’s remit to consider whether the platform provided by a certain form of betting or UK betting operator undermines that objective. I hope that the Minister will ensure that the commission has the power to look at such issues and that it will have a vision of the way in which the gambling industry will develop over the next 20 to 30 years in terms of bookmaking, the issues raised by my right hon. Friend the Member for Chingford and Woodford Green and online betting, which is definitely the face of the future.

There is much more that I should like to say, and I hope that we shall have an opportunity to debate some of the broader issues—particularly online betting—but I appreciate that the hon. Member for Hove wants to make a contribution. I shall therefore bring my comments to a close and ask the Minister to give serious consideration to what has been said.

10.22 am

Ms Celia Barlow (Hove) (Lab): I congratulate the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) on securing this important debate and on all the years of investigation and hard work that he has put into the issue. The cases that he highlights are not only important to our constituents, but have ramifications for the bookmaking community and the industry as a whole. The principles at stake are those of justice, accountability and transparency.

The bookmaking industry forms an essential part of our leisure sector and provides jobs and security for thousands of people across the country. Many of our oldest bookmakers are family-run businesses established over successive generations. Spectacles such as Royal Ascot and the grand national form part of our national calendar and are watched and admired the world over.

The legitimate gambling sector is a well established part of our leisure economy, but the case to which I wish to draw attention highlights corruption and abuse at the very heart of the National Joint Pitch Council—the regulator that was established to prevent such things from occurring. The case of my constituents Don and Garry Morrill should be of concern to the millions of people throughout the United Kingdom who are associated with or support the bookmaking industry, be they customers, business people or the thousands of employees in the industry.

The Morrill family has been trading as Taffy Ltd Bookmakers for generations. Don Morrill’s first experience of the industry was as a 14-year-old boy
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when he worked alongside his grandfather. He experienced at first hand the excitement of a race meet and wanted to walk in his family’s footsteps by continuing the family business, which had been in operation since 1929. When his uncle passed away in 1974, Don Morrill took over the running of Taffy Ltd bookmakers.

The allocation of pitches on a race course is determined by the length of time that an individual has been trading as a bookmaker—a procedure known as seniority, as we have heard. The greater the bookmaker’s seniority, the better their choice of pitch on the race course. The position of a pitch makes a huge difference to a bookmaker’s business turnover. The system was designed to ensure that the longer a bookmaker had been trading, the higher up the list of seniority they would be. It was used throughout the last century until its replacement by the NJPC in 1998.

The bookmaking community has always worked hard to regulate itself to ensure the fairest system of allocating pitches on the race course. Pitches may be inherited only from father to son, but due to my constituents’ exceptional circumstances, an agreement was reached in 1974 with the National Association of Bookmakers national pitch final appeals committee under the unforeseen contingences rule. As a result, Don Morrill was able to retain a pitch on the race course, although he had to build up his seniority over the next 24 years.

It takes years to build up seniority, and the close-knit nature of the bookmaking community means that everyone is aware of everyone else’s position. That concept of seniority and the manner in which the regional NJPC has allocated pitch positions under the new system, which was introduced in regulations in 1998, are the crux of my constituents’ case. If the NJPC is to be the basis for the new regulatory body that will be put in place from September, it is of the utmost importance that my right hon. Friend the Minister takes a closer look at the current procedures for the allocation of pitches at race tracks in the southern region. In particular, I ask him to pay close attention to those individuals who oversee the current system.

When large sums are involved, there is always a danger that people will try to find ways to use the system for their own financial ends. In the case of my constituents, the select group of individuals whom we have heard mentioned—Tom Clarke, John Stevenson and Robin Grossmith—have placed themselves in such a position that they have been able to oversee not only the allocation of pitches, but the appeals procedure, which is virtually without precedent in the sporting world.

The activities of the soon-to-be-defunct NJPC have resulted in serious breaches of trust, which specifically involve the NJPC’s ex-general manager, Clive Reams. When my right hon. Friend looks at the evidence, he will also find a catalogue of mistruths and misleading statements from Tim Moore, the chief executive officer, and the NJPC’s current management.

When one looks at the evidence in the case, the proof is overwhelming. As the current regional system stands, there is no national independent appeals body to which
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bookmakers can take a regional dispute. The NJPC’s current set-up has enabled a select group to position itself so as to act as judge, jury and executioner—a far from satisfactory situation, as I am sure my right hon. Friend will agree. Such breaches of trust have been committed by the very people whose job it is to ensure that all transactions and pitch allocations are undertaken in a fair and just manner.

We are talking about earnings varying by thousands of pounds as a result of a bookmaker’s pitch position on a race course. Bookmakers with lower seniority have been found to have been given the choice of a better pick position, despite the fact that their seniority is far less than that of my constituents. Other long-established bookmakers have also found that certain individuals have inexplicably gained better track-side positions. There is evidence that those individuals are known acquaintances of those whose job it is to oversee the fair allocation of pitches.

When my right hon. Friend looks more closely into the situation, he will see the same names time and time again. Indeed, the situation has been noticed and raised by people other than my constituents. As we have heard, of the more than 900 bookmakers nationally, 292—mostly in the southern area—have lodged complaints about the allocation and auctioning of pitches. Of those complaints, which come from almost one third of bookmaking businesses, only 8 per cent. have been addressed, with 92 per cent. pre-judged by the southern region NJCP, which is headed by Clive Reams.

Tony Fairbairn, a former independent member of the NJPC, as well as ex-NJPC manager Mark Wharton and ex-NJPC official Terry Lang, assert that despite Mr. Reams’s claims to the contrary, they never attended any independent appeal panel to look into the 292 complaints that were brought to the NJPC. They further claim that any appeals were in fact “binned” by Mr. Reams. Indeed, in a letter to the right hon. Member for Chingford and Woodford Green, David Bowden, the former head of the National Association of Bookmakers, acknowledged that the application of the methodology to my constituents’ seniority had been “manifestly unjust”.

I believe that the unjust application of the pitch allocation system is not confined to my constituents. Ladbrokes, which is acknowledged to be the second oldest rails bookmaker trading in Brighton, is placed no higher than 10th on the pick list at Brighton race course. How can the second oldest rails bookmaker in Brighton achieve second place in one region, but a place no higher than 10th in another? William Hill, the oldest bookmaker in the country, was similarly placed in a lowly position in the southern lists; it chose to pay £18,000 to secure the No. 2 position at auction, with the commission going directly to the NJPC, rather than fighting for what rightfully belonged to it.

I believe that a full independent inquiry into the current circumstances of the southern region, and of the NJPC in particular, is essential, not only to establish the facts but to assure customers and bookmakers alike that the Government take fraud seriously in all its forms. If such an inquiry were to confirm that irregularities had occurred, recompense should be given to those who lost out under the system. During any investigation, it would wholly wrong for any members of the NJPC who are involved in the
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current situation to be involved in any new regulatory body being set up within the industry.

Although the present system was welcomed by those working in the industry when it was introduced in 1998, it has enabled certain people to abuse the changes in regulations for their own financial benefit and to act as judge, jury and executioner in any case or complaint brought to them. We are looking to change the rules that govern how people are to gamble in this country. It is imperative that both the public and the Government are able to make the changes in the full knowledge that all potential avenues of corruption have been adequately dealt with. Full transparency should be an absolute requirement in any process that is implemented in the future.

My constituents fully acknowledge that in ever-changing times the gambling sector itself needs to adjust and adapt. They welcome the Government’s efforts to devise a fair system in which people who wish to enter the profession can do so. It is wrong, however, on the implementation of a new system for a select few people to be able to act as judge, jury and executioner, with no recourse to appeal. Who—to employ a much used expression—watches the watcher?

An independent national body would be able to provide the necessary detachment needed when a regional grievance was raised. It would also ensure parity across the whole country and make sure that any rules and regulations were applied fairly to all, with no conflict of interest. As for the specific case of my constituents, they believe that time is running out to address their concerns about the operation of the soon-to-be-defunct NJPC. Don and Garry Morrill have been let down by a system that has allowed many people working in their industry to abuse their positions and remain in them without any significant checks or balances on their actions. It would be wrong of the Government to introduce NJPC mark 2 without adequately dealing with the serious shortcomings of the current system.

I applaud the Government’s commitment in seeking ways for the betting system to remain fair and open. Greater transparency benefits us all. When the new system is introduced in September we should do everything we can to ensure that the new procedures are transparent. The vast majority of members of the bookmaking community conduct themselves in an honest and above-board manner. They pride themselves on their work and the service that they provide. With the future well-being of their industry in mind, they feel that confidence is essential to maintaining their professional reputation. The House needs to do everything possible to ensure that the practices of a few cannot tarnish the reputations of many.

10.34 am

Richard Younger-Ross (Teignbridge) (LD): I shall be very brief. We have had an excellent debate and are now really waiting for the Minister’s response. I just want to congratulate the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) on raising the subject. He has done so before, and I am horrified that we are here debating it again and we are still in the same situation. There are allegations of incompetence, the word “corruption” has been used, the rules clearly are not fair and there is no fair or just appeals system for people who find that the rules work against them.

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My hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) said that we need cross-party consensus, and I agree. I am quite prepared to meet the Minister to discuss how we can move on and resolve the problems in a way that is not party political but that will enable us to achieve consensus and progress. We need to bring justice to a system that, judging by what we have heard today, appears to be either corrupt or incompetent, depending on one’s interpretation.

10.35 am

Anne Milton (Guildford) (Con): I too will be brief, because it is important for the Minister to have the maximum time in which to answer the points that have been raised today. The situation is serious. Confidence in gambling is crucial. With respect to the remarks of the hon. Member for Livingston (Mr. Devine), I shall say only this: the debate about online gambling has only just begun and it has many episodes yet to run.

The National Joint Pitch Council will cease to exist in September when the relevant section of the Gambling Act 2005 is implemented. However, the fact that that much-criticised organisation is in its final days does not mean that it should escape rigorous investigation of the many serious allegations that we have heard. It has been investigated by the Office of Fair Trading and, in a fairly half-hearted way, by the Department for Culture, Media and Sport. In one English region alone, 300 appeals have been made against its decisions. It is responsible for the administration of betting with bookmakers, and it is telling that, time and again, it has been in court defending itself against disgruntled bookmakers, the people whom it is meant to serve. It is incredible to hear that appeals are considered by those who were involved in the original decisions. That flies in the face of any sort of natural justice. Then, to cap it all, we hear that no minutes are kept.

The concerns continue. I, like other hon. Members, praise my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), and others who have raised continuing issues about the NJPC. We, and the Minister, must deal with the fact that it is somehow always the small man who gets it. This is a story about the big boys against the little boys; it is a story about ad hoc rule making and flagrant rule breaking. Yet nothing has been done about it, and it has taken my right hon. Friend’s hard work to bring it yet again to the Minister’s attention. I look forward to hearing what the Minister will say.

In its nine years of existence, the NJPC has irreparably damaged many bookmakers’ businesses. It is time that we had an independent inquiry into its workings, so that confidence can be restored to the regulation of the industry before the Gambling Act 2005 comes into force. There are huge concerns, not only in this House but among the general public, about the Act. I hope that the Minister will take the opportunity of the debate to restore the confidence of hon. Members and the public in what will happen after September. Irrespective of whether conspiracy or incompetence is responsible for the problem, nothing but a full independent inquiry will do.

10.39 am

The Minister for Sport (Mr. Richard Caborn): The right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has usefully drawn attention to a
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subject of considerable interest to his constituent, which he has tenaciously prosecuted for a long time. I acknowledge other hon. Members, too, with an interest in horse racing or bookmaking. As the right hon. Gentleman will appreciate, it would be inappropriate to comment on any particular allegation, but it is right that I should address the serious allegations that several right hon. and hon. Members have raised.

I agree with the right hon. Gentleman that on-course bookmaking must be properly regulated, and I hope that my contribution will show some ways of ensuring that that will happen. It is also essential that gambling remains crime-free and that it is carried out in a fair and open way. Those things are the basis for, and the key objectives of, the Gambling Act 2005, which now covers this area. It will bring bookmakers within the jurisdiction of a new national regulator, the Gambling Commission, for the first time.

I will come back to that point, but perhaps it would be useful if I were to start by outlining the history behind the establishment of the National Joint Pitch Council, the involvement of the Horserace Betting Levy Board and the Government’s association with those bodies.

As the right hon. Gentleman will know, the levy board is a non-departmental public body, NDPB, that operates in accordance with the Betting, Gaming and Lotteries Act 1963, as amended. Its main functions are to collect payments from bookmakers and use them for the three statutory purposes set out in the 1963 Act: the improvement of breeds of horses; the advancement or encouragement of veterinary science or veterinary education; and the improvement of horse racing.

Since 1972, the board has also had responsibility for issuing certificates of approval to race courses, providing for the location of betting rings for on-course bookmakers. At that time, the National Association of Bookmakers had responsibility for the administration of betting rings, under an agreement with the Racecourse Association, the RCA. However, in 1997, after seven years of disputes, that agreement was terminated by the RCA. To ensure that betting rings were properly administered after the termination of the agreement, the levy board instigated a review.

Following extensive consultation, the review recommended that a new administrative body should be established. It was to be known as the National Joint Pitch Council. It is a condition of the levy board’s certificates of approval that race courses observe the national pitch rules that the board has endorsed. The NJPC is not a public body, but a company limited by guarantee. Its functions are essentially administrative and relate to the conduct of bookmakers on race courses. In particular, the NJPC has introduced much-needed modernisation into the betting ring.

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