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14 Mar 2007 : Column 89WHcontinued
The right hon. Gentleman has suggested that the introduction of the auction of on-course betting pitches has allowed crime to infiltrate that market. He has further implied that the NJPC has turned a blind eye to that infiltration. I should remind him that the auction of pitches was implemented by the NJPC, at the request of the levy board, to ensure greater freedom and transparency in the on-course market. I should further remind the right hon. Gentleman that the fact that
pitches are auctioned demonstrates that the process is transparent, since auctions take place with scores, if not hundreds, of people present. Pitches may be bought and sold only by bookmakers who have permits issued by the magistrates court and who are then subject to further NJPC authorisation hurdles. The right hon. Gentleman suggested that he could supply evidence. If that is the case, will he please provide it? We would refer it to the right people, be that the police or the new Gambling Commission. The system was a marked improvement on the dead mans shoes arrangement that existed pre-1998, and the vast majority of people said that that was so. Furthermore, the Office of Fair Trading looked into the operation of the on-course market and found no problems with the auction arrangements.
The right hon. Gentlemen has also implied that organised crime groups might be forming cartels to influence the starting price used by off-course bookmakers across the country. Again, it might be helpful if I were to explain a little about how starting prices are set and used. In 2004, the method used for setting the starting price was revised by the starting price regulatory commissionan entirely independent body chaired by Lord Donoughue. At that time, he stated that his priorities for the new system were total transparency and integrity. Indeed, he insisted on opening up the new system to press scrutiny during its testing period and, to this day, the starting price for each race is overseen by an independent starting price validator employed by the Press Association.
The importance of the starting price is that it is used in licensed betting offices up and down the country. I should remind hon. Members that the off-course industry is under no obligation to use the starting prices from on-course bookmakers. It is widely considered that the starting price arrangements benefit the customer because the on-course market is highly competitive and highly efficient, and therefore drives down off-course margins. It is perhaps for that reason that some bookmakers are beginning to consider setting their own starting prices without reference to on-course prices. If the right hon. Gentleman has any evidence of criminal conduct concerning the setting of starting prices, I urge him to draw it to the attention of the police.
Simon Hughes: The Minister has heard from several contributors, including the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) and myself, about the failure to have an independent appeals system in respect of pitch allocation. Will the Minister address that? Will he tell me whether the Department has examined that and whether it accepts that the present systemI appreciate that there will be a new system from Septemberhas a fundamental flaw?
Mr. Caborn: The answer to that is that we have examined the matter. I believe that the hon. Gentleman received a copy of a lengthy letter that was sent on 13 October 2006 to Mr. John Morrill. I shall put a copy of it in the Library, if I have permission to do so.
Reference has been made to the appeals system. The letter stated:
You...have...claimed that you were treated unfairly during the NJCP Appeals process that followed the integration, on the basis that your appeals were not upheld. Those appeals were judged against the revised formula set out in the NJPC fax of
20 November 1998. I agree with you that it is regrettable the NJPC has not maintained better records of the appeals panel and I have taken this issue up...However, it is clear that the NJPC was explicit that the appeal panel would hear appeals on matter of mistaken fact only, and not on complaints regarding the methodology. I have not seen your appeal papers, but I understand that you did not seek to challenge the facts relating to your start date, to which the new methodology was applied. Again the Department has not seen any evidence to suggest that the NJPC acted improperly in not upholding your or
Mr. Duncan Smith: Will the Minister give way?
Mr. Caborn: I shall quickly finish this point. The problem is that we do not have time today to deal with the important questions that the right hon. Gentleman raised about why the southern area was different from the rest of the United Kingdom.
The letter put the matter succinctly, stating:
On 18 August 1998 John Stevenson wrote to the NJPC Chairman suggesting that the Stevenson Formula was over complicated. He also highlighted concerns that the commencement dates used in the formula only went back one generation thus disadvantaging longer standing bookmaker families. On 6 October 1998 the decision that the NJPC should integrate the lists on behalf of the BPAs was reversed, and it was agreed by the NJPC and NAB that local BPAs would integrate their own lists using the Stevenson Formula and forward these integrated lists to the NJPC. All but the Southern Area BPA, integrated their own lists. Many (but not all) went through a number of iterations of their integrated lists, consulting members and amending the lists several times before they were finalised and submitted to the NJPC. On 25 September 1998 the Southern Area BPA informed the NJPC that it was not in a position to integrate its own lists. Therefore, and with agreement between Southern Area BPA and NJPC, the Southern Area forwarded its home and away bookmaker lists to the NJPC to be integrated using the Stevenson Formula. On 21 October the NJPC wrote to the Southern Area BPA confirming that the Stevenson Formula would be used for integration and requesting that any amendments to the home and away lists submitted be forwarded to the NJPC no later than 23 October 1998, otherwise the previously submitted data would by used for the integration. The NJPC has confirmed that all data necessary for integration of the lists was, after some delay, received from the Southern Area. The integration of the Southern Area lists was carried by John Stevenson of the NAB and Clive Reams, the then Chief Executive of the NJPC.
Mr. Duncan Smith: Will the Minister give way on this crucial point?
Mr. Caborn: It is crucial, but I just want to put it into context. The right hon. Gentlemans first argument was that the Stevenson formula was departed from and that people were seen to be left in a mess. The move was agreed by Stevenson and others.
Mr. Duncan Smith: The Minister ought to get from his officials a copy of the letter that Stevenson wrote in response to the report. He has denied all that and made it absolutely clear that he had nothing to do with that and that he did not know of any change to the Stevenson formula. It is interesting that the Ministers officials have not put that on his desk, because they should have. The critical point is that Reams made those changes without any clear reason or the authority to do so, and that he lied about having to do so because he did not get the lists. All the way through, thereafter, the levy board said that it did not have the lists, but it didthe Minister just said soso there was no reason to change the formula. There is a real discrepancy.
Mr. Caborn: We are not going to resolve this issue in the debate. I will look into this matter with my officials. At the end of my speech I shall say how we think matters should proceed.
I thank the right hon. Gentleman for referring to the important issue of money laundering. We must ensure that there is integrity in all sections of the gaming and gambling industry. If we do not, everyone will suffer. The Government take the prevention of money laundering extremely seriously in every industry, including on-course betting. In 2000, the NJPC engaged two former senior police officers to investigate possible money laundering in the betting ring, and they found no evidence of that. However, it would not be appropriate for us to leave matters there. The prevention of money laundering is the responsibility of the Government and law enforcement agencies, and we continue to monitor the gambling industry to identify risks as they arise. That is vital in a continually evolving industry that is subject to the technological changes that have been described this morning.
Bookmakers are not subject to the Money Laundering Regulations 2003, but they are subject to the principal money laundering offences established in the Proceeds of Crime Act 2002, which carry prison sentences of up to 14 years. Again, I say to the right hon. Gentleman that if he has any evidence of money laundering, which we take very seriously, he should present it to the police.
My Department is far from complacent on these issues. The right hon. Gentleman accuses us of not taking repeated allegations seriously, but nothing could be further from the truth. The British gambling sector has an excellent reputation worldwide and on-course bookmaking is no exception to that. I am determined that it will remain so. Ensuring that gambling is conducted fairly and remains crime-free is a high priority for the Gambling Commission. Indeed, the Gambling Act 2005 sets those considerations out as the commissions priorities.
From September 2007, all bookmakers will be licensed by the Gambling Commission instead of by local magistrates. The national gambling regulator now carries out joined-up checks on the suitability of all applicants for gambling licences, including bookmakers. Those checks will go well beyond those under the previous arrangements. The commission will maintain a national register of all on and off-course bookmakers and will have robust powers to investigate, seize evidence and prosecute, if necessary.
I am aware that constituents of the right hon. Gentleman and my hon. Friend the Member for Hove (Ms Barlow) have expressed concerns about the infiltration of crime into the on-course market. I am also aware that the right hon. Gentlemans constituent has long been pursuing the NJPC for breach of contract and that the parliamentary ombudsman and two separate courts have heard and dismissed his claims and awarded costs to both the NJPC and the levy board. I agree that we must be vigilant about the risks, but we must also take care not to impose unnecessary and disproportionate measures. The new licensing regime that is being introduced under the Gambling Act
Mr. Caborn: This is important; I hope that the right hon. Gentleman takes note. The new regime provides an appropriate regulatory structure for on-course betting in Britain. The regime addresses the three objectives of the Act, which are to keep gambling fair, to keep it crime-free and to protect the vulnerable, particularly children. However, I appreciate that some on-course bookmakers are still unhappy about some of the NJPCs past decisions, particularly when the on-course bookmakers picking lists were combined in 1998.
Mr. Duncan Smith: The Minister said that my constituent and the hon. Ladys constituent have been to the courts, but the key point that I have made today is that the levy board and the NJPC simply perjured themselves in those court cases. They said that the lists were not available and that was why the changes were made. We now know that that is not true; the Minister admitted that just now. In essence, we have had a whole game of subterfuge. Surely that alone is enough to ask why there has been no real inquiry into this case.
Mr. Caborn: It is very serious to say that people have perjured themselves. If one makes those serious allegations, one has to make them stand up. The courts are there to make sure that matters stand up. We make the laws and they carry them out. That case has to be a matter for the courts, not the Government.
I want bookmakers, the Gambling Commission and all those with a role to play in ensuring that the new licensing system is fit for purpose to be involved in the process, and I will look for a positive way forward. It is important to resolve these problems while we are modernising and bringing in the measures in the new Act. To that end, my Department hosted a round-table discussion last month between representatives of race courses, bookmakers, the levy board, the NJPC and the Gambling Commission to discuss the future administration of on-course betting. The hon. Member for Guildford (Anne Milton) was wrong to say that the NJPC will go out of operation. It will not, but it will change its role.
Following those discussions, a working group was set up to consider possible solutions and will report shortly. The points that have been made this morning by hon. Members on both sides of the House will be put to that group, and we will ask it to consider in particular the appeal process and whether it is fair and transparent. I shall ask the Gambling Commission to report, and will ensure that its report is placed in both Houses so that it can be further scrutinised. I shall reflect on this mornings debate and consider whether further representations should be made to the working group to ensure that it takes all concerns into account. It is not in my interests or those of the gambling industry to have this kind of cloud hanging over it. I am determined to clear matters up and ensure that there is transparency and integrity.
We live in a fast-moving world, and globalisation is affecting every sector of our lives, whether that involves the Tesco store that takes over the corner shop or technology moving at such a pace that matters have to be managed differently. Unfortunately, there are casualties as a result. We might not like that, but it is a fact of life. We are trying to manage this important
sector of the industry, and we have a great record. I believe that we have kept this industry crime-free since 1968, and that it probably has the greatest integrity of any such industry anywhere in the world. We are determined to take that forward with the new Act, particularly by setting out in it for the first time measures to ensure that punters have a fair bet, that the industry is kept crime-free and that the vulnerable are protected. Those are the Gambling Commissions main aims in carrying out its duties.
Richard Younger-Ross: The Minister said that there is not enough time to go through all the detail of what has been said here today. When he reflects on the debate, will he consider having a cross-party meeting to discuss these matters in greater detail and to consider whether they need to be taken forward? It seems to me that they do.
Mr. Caborn: I assure the hon. Gentleman that there has been dialogue with my officials and with the right hon. Member for Chingford and Woodford Green.
Mr. Caborn: The right hon. Gentleman has met my officials.
Mr. Duncan Smith: Not since the report.
Mr. Caborn: Well, the right hon. Gentleman has met my officials several times. If a dialogue is needed, hon. Members can meet my officials or me before we have the discussion with the working group. That might not be a bad idea, but I assure hon. Members that this matter is extremely well documented. We have gone through it in detail and the right hon. Gentleman has had two court cases and been to the Office of Fair Trading and the ombudsman.
Mr. Duncan Smith: The facts are fundamentally wrong.
Mr. Caborn: If the right hon. Gentleman has evidence of perjury in the courts
Mr. Duncan Smith: I have given it.
Mr. Caborn: That must be taken back to the courts.
Mr. Joe Benton (in the Chair): Order. We cannot have this interchange across the Chamber.
Mr. Caborn: I am very sorry, Mr. Benton. All that I am saying, very clearly, is that if there is evidence of perjury in court, it must go back to the court. It is not my officials or the Government who should make a decision on that, but the courts.
Ms Barlow: What is the composition of the working group? I add my voice to that of the hon. Member for Teignbridge (Richard Younger-Ross), because many issues have not come up in the debate, such as the conduct of auctions, which the Minister brought up himself. Will they also fall within the remit of the working group?
Mr. Caborn: I shall write to my hon. Friend to give the working groups terms of reference and its composition, and I shall place a copy of that letter in the Libraries of both Houses.
Susan Kramer (Richmond Park) (LD): I appreciate the opportunity to raise this issue before the Minister, because it is a serious worry to those in my constituency and surrounding constituencies.
Later this year, in November, we will lose the Eurostar services
Mr. Joe Benton (in the Chair): Order. I apologise for interrupting the hon. Lady, but would hon. Members who are leaving the Chamber do so quietly?
Susan Kramer: Thank you, Mr. Benton.
We will lose Eurostar services at Waterloo International when they move to St. Pancras. That will be a genuine loss for many of my constituents because it will add an hour to train travel to the continent, and unless they revert to the airlines it will be more burdensome. Because they supported Eurostar services, my constituents and others in the South West Trains area willingly gave up one of their tracks to make the Eurostar service possible. Now, with Eurostar moving and Waterloo International being vacated, we would like our track back and the associated platforms turned over to domestic use.
The Minister will be aware that in the past 10 years passenger numbers on South West Trains are up by close to 50 per cent. Network Rails route utilisation strategy in 2005 forecast that that increase would continue at the rate of about 19 to 20 per cent. over the next 10 years. We questioned those figures at the time, and I understand from conversations with the industry that there is now general consensus that planning in the route utilisation strategy for a 20 per cent. increase in passengers over 10 years is now recognised as being fundamentally flawed. The Minister will also be aware that the Association of Train Operating Companies has today produced a new report that predicts that the number of passengers on routes served by South West Trains into Waterloo is set to rise by 50 per cent. over the next 10 years. Those are the sort of numbers that the rest of us were talking about. ATOC based its figures on growth acceleration since last spring.
Dr. Vincent Cable (Twickenham) (LD): Does my hon. Friend agree that in developing her excellent initiative her proposal for using Waterloo International is a much more cost-effective, immediate and practical way of dealing with overcrowding than the bigger and longer-term solutions, such as the proposal for double-decker trains, which is often advanced to solve the problem?
Susan Kramer: I thank my hon. Friend, who is right. The opportunity presented by the vacation of Waterloo International platforms is a quick hit for dealing with immediate overcrowding and lack of capacity.
The original route utilisation strategy anticipated only 20 per cent. growth on South West Trains and said:
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