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4 July 2007 : Column 242WH—continued
The outcome of the current predicament will have far-reaching consequences not just for the bookmaking community but for the general public. The traditional
bookmaker is as much a part of the racing experience as the horses and jockeys. Spectacles such as Ascot and the Grand National are part of our national calendar. They bring in many thousands of tourists, and are watched and admired the world over through television and satellite coverage, which also brings much-needed revenue. As the Act will change the rules that govern how the bookmaking industry operates, it is especially important that confidence in the industry is retained, not just by the public but by those who work in it.
I support the broad outline of the Act. With the advent of modern technologies, the gambling industry has undergone many changes. It is only right that the Government acknowledge those changes and introduce legislation that best reflects the need to adjust and adapt so that this great sport, the sport of kings, may continue to operate throughout the 21st century. However, with the allocation of list positions no longer being recognised after 2012, many bookmakers in the industry are concerned that too much control of trackside betting and the associated assets will be in the hands of one body—the Racecourse Association. There is great worry that such unprecedented control would provide the association with a greater degree of commercial control over trackside betting than would be desirable in a free industry.
The consequence of the Gambling Act 2005 is that Britain’s 59 race courses will be able to take over ownership of sought-after sites in 2012 and then rent them back to the people who originally bought them in good faith. No distinction or preference will be made on the basis of the bookmaker’s previous list position, which, in some cases, was acquired through a century of work and trust-building in the industry. Obviously, the allocation of pitches will be awarded on a commercial basis to those who are prepared to pay the greater rent.
Perhaps I am being absurdly pessimistic, but I can envisage the end of the family bookmaker as a result of the Act. Bookmakers, many of whom are individual businessmen, will vie for their trackside position against huge, enormous betting companies that obviously have huge, enormous resources. Having paid for their list position once and been promised that it would be for life, they will find themselves once again at the mercy of big business.
It is fair to say that many of the well-established but smaller bookmakers will be unable to compete. If they were to be lost, an essential component of our horse racing industry would be lost for ever. It is the duty of this House to do everything in our power to ensure that that does not happen. The loss of recognised list positions would be grossly unfair to those who spent so long building up their businesses. It would be unfair to their children, parents, grandchildren and grandparents—to whole generations of bookmakers. Furthermore, it would leave them with no long-term financial security. A highlight of previous legislation was that it gave bookmakers something to hand on to their children.
I therefore strongly urge the Minister in his new position to consider the specific intent of the Racecourse Association, and to consider whether legislation should be amended so that list positions remain in the ownership of the bookmakers. The issue is causing a great deal of stress and anxiety to many in the bookmaking industry
who want nothing more than to continue to work in the profession that they admire and respect. We have but a short time before the Act comes into force, so I would appreciate the Minister’s review of the issue.
2012 looks set to be a golden year for British sport, but it is important that it should be a golden year for all British sport, not just the Olympic sports. It is important that we do everything that we can to protect the livelihood and reputation of those who have given their life to the industry.
9.58 am
Mr. Crispin Blunt (Reigate) (Con): I congratulate the hon. Member for Livingston (Mr. Devine) on securing this debate and thank him for doing so. He and the hon. Member for Hove (Ms Barlow) clearly laid out the case, so I do not intend to repeat it. As the hon. Gentleman might expect, the only place where I disagreed with him was at the beginning of his speech. The family bookmakers who are faced with the consequence of the 1998 reforms might now be in mind of the Duke of Wellington who, when faced with the Great Reform Act of 1832, said:
“Reform, reform—aren’t things bad enough already?”
We now have to deal with the consequences of changes made in the past 10 years. It is self-evident that we are faced with a substantial injustice, which, as pointed out, is in total estimated to be worth £100 million. Representations have been made to me about this issue, particularly by a classic family-bookmaking firm, Russell White and his son, John. Russell inherited the business from his father, so to my knowledge, at least three generations of people in the business have used the reforms to secure pitches. The value of those pitches is now estimated at £300,000; that is the size of the asset of which they will be deprived. If they seek to trade it now, under current valuations, they have already been deprived of a significant percentage of that amount.
The Minister intervened on the hon. Member for Hove to ask for evidence that the pitches were sold for life. If I were a lawyer defending his position in front of the European Court of Human Rights, I would not want to take his brief. As I have said, it is self-evident that there is a right to property and people have a right to enjoy their property, and it is plain that people are being deprived of that through the operation of the Gambling Act 2005.
The plain motivation of the Racecourse Association to obtain ownership of £100 million in assets under the operation of the 2005 Act will unfairly and unjustly deprive a group of people of a very significant asset, and that must be addressed. The case has been made extremely clearly by the hon. Members for Livingston and for Hove, and I will not repeat it, but something must be done, and if the Government do not do it, family bookmakers will be forced to take the expensive option of taking their cases to the courts. On the evidence that I have seen, I believe that they will have a clear legal case, because they have been unfairly deprived of their property. We should not be in the business of driving bookmakers down that extremely expensive and hazardous route, where the beneficiaries will be a group of people who are nearly as well respected as bookmakers: a bunch of lawyers. I sincerely hope that the Government can find a solution to the issue.
10.2 am
Jeff Ennis (Barnsley, East and Mexborough) (Lab): Thank you, Mr. Conway, for giving me the opportunity to participate in this important debate. Before I start my contribution, it would be remiss of me not to pass on my congratulations to the new Minister, who is a fellow Yorkshireman. His predecessor, my right hon. Friend the Member for Sheffield, Central (Mr. Caborn), who was the longest-serving Minister for Sport ever, is also a Yorkshireman. He has an advantage over the current Minister: he is from south Yorkshire, rather than west Yorkshire, and as we all know, south Yorkshire is the best part of Yorkshire.
I will show that I agree with many of the comments made by hon. Members from all parties by quoting part of a letter from one of my constituents who is an on-course bookmaker. He is called Mr. Chris Johnson and he lives in Harlington, Doncaster, in my constituency. He has been an on-course bookmaker for a considerable time. I will not read the whole letter, but those parts that I think are most relevant, as it encapsulates the problem of the current impasse that we face. I have, of course, recently sent the letter to the Minister’s predecessor and have not yet received a response, although I only sent it around three or four weeks ago. The letter states:
“Dear Sir, I am a racecourse bookmaker whose livelihood will be confiscated on1September 2012 as a consequence of the Gambling Act, which comes into force on 1 September 2007.”
The letter then goes into the history of the establishment of the National Joint Pitch Council, and I will carry on from that point. He says that the establishment of the NJPC was
“heralded as an opportunity to introduce new blood into the ring and to give bookmakers the comfort of a stable career option at the end of which they would have a marketable asset with which to finance their retirement.”
“As a consequence bookmakers have invested substantial sums in buying into the ring and to date it is estimated that the value of bookmakers’ positions is in excess of £100 million. Many bookmakers have invested heavily into the ring, often financing these purchases out of savings or loans raised on the value of their houses.
During the drafting of the Gambling Bill it was decided by the DCMS that the levy board was to be abolished and hence it’s role in issuing ‘certificates of approval’, upon which bookmakers’ pitch tenure depends, disappeared and was not replaced by another mechanism. The Act provides for a period of 5 years, during which racecourses are restricted in the pitch fees they may charge, as has been the case since outlined in successive Acts, the latest being the Betting, Gaming and Lotteries Act, 1963.
However, as a consequence of the omission in the Gambling Act to replace the function of issuing ‘certificates of approval’, the RCA has interpreted this as allowing ‘the confiscation of bookmakers’ positions from 1 September 2012’... I believe that it could not have been the intention of Parliament for bookmakers to have their assets confiscated in this way.”
Mr. John Greenway (Ryedale) (Con):
As hon. Members will know, the hon. Gentleman and I jointly chair the all-party group on racing. An issue that occurred to me while listening to the exchanges of hon. Members is that, when the measure was drafted, it was envisaged that the horserace betting levy would be abolished and therefore a commercial arrangement would need to be entered into between on-course bookmakers, race courses and the racing industry. As the levy will now continue, does the hon. Gentleman
agree that we need to take account of that in the arrangements that will be put in place beyond 2012?
Jeff Ennis: I thank the hon. Gentleman for his comments, with which I totally agree—to some extent he has read my thoughts.
If I may, I will continue to read from the letter:
“The levy board has now been reprieved but is reluctant to continue with it’s ‘certificate of approval’ role, and, as a consequence, there is a need for the tenure issue to be placedin alternative hands.
I am 49 years of age and have worked all my adult life as a racecourse bookmaker, acquiring my first bookmakers permit in 1979. Many of ‘my’ pitches were ‘earned’ under the previous system, (i.e. prior to the NJPC taking over the administration of racecourse bookmakers and their positions). To attain an allocated pitch in those days the bookmaker (in person) had to attend at least 75 per cent. of the scheduled fixtures for that racecourse. As I’m sure you can imagine trading on some of these days in the poorest position within the ring was almost unworkable, but to attain a permanent position the attendance requirement had to be fulfilled, thus I consider I well and truly earned my right to trade at each individual racecourse.
In 1998 the National Joint Pitch Council (NJPC) became the racecourse bookmaking industry administrative body, and along with many afore-mentioned changes within the ring, introduced the buying and selling of bookmakers positions. This allowed ‘new blood’ to become racecourse bookmakers and also allowed incumbent bookmakers like myself to improve their position within the ring by trading up. This I have done at several racecourses, investing well over £65,000 on positions at different racecourses, giving me a total valuation of my pitch portfolio of around £140,000, this prior to the RCA decision outlined earlier. Not only has this decision robbed me of any financial return/retirement package but it has knocked at least 30/40 per cent. off of the current pitch values because the purchaser knows he has only a 4 and a half year tenure to attain a return on his investment. As such, people who invested in pitches are left ‘high and dry’ because no-one wants to buy racecourse positions now (even at vastly reduced prices) and will have no asset to sell in 2012.
I am not a university educated man but this decision by the RCA cannot be a fair and equitable one. Your government introduced the social charter and extended rights for the individual and as such ought to view this outrageous decision by the RCA totally unjust.
As stated above, when pitch reform was introduced we were given assurances that this would give career bookmakers certainty and security and provide them with assets to finance retirement. It would now appear that these assurances have been swept away by something that would not appear to have been intended by Parliament, which would appear to be a case of ‘the law of unintended consequences’.”
I think that that epitomises the current problem. They are the words of an actual bookmaker.
I should like to stress the difference between an on-course and an off-course bookmaker. The point has been made already that many on-course bookmakers are small, family businesses; often they are not the rails bookmakers that can be found at race courses—the “big four”, as they are called, or the other big on-course bookmakers. Many of them are very small, family businesses, and they all have a certain amount of character to them and add to the atmosphere on the race course.
I remember an on-course bookmaker from Great Houghton, which is a village next to mine, near Barnsley, in my constituency. He was known as “Smiler” Pearson, and he was a typical on-course bookmaker; he had a flat cap, as could be imagined, given that he came from Barnsley. His lips were usually white from the chalk dust. I am going back to the days when bookmakers
had to chalk up the odds, to the days before marker pens, so his lips were always white. He earned the nickname, “Smiler”, because, as could be imagined, he never smiled, like a lot of bookmakers. As they rob people and take their money, they never smile, even though they have just taken someone’s last shekel. Those sorts of characters are endangered by the current situation.
It goes without saying that we need to reach a consensus, which is why it is very important that discussions continue between the on-course bookmakers association and the RCA. Indeed, the Northern Bookmakers Association, which has been in touch with me and is based in Ilkley in west Yorkshire—of course—is looking, as a compromise, for the reintroduction of the certificate of approval, either by the levy board, as it used to be, or by the new Gambling Commission. I should like to hear the Minister’s thoughts on that when he sums up.
I realise that this is an extremely difficult issue to resolve, and in many respects, I can understand the position of the RCA, which wants to maximise its product. We have 59 race courses in this country. Long may that continue! I think that the rest of the world admires the diversity of our race courses. We must ensure that every one of those 59 race courses continues to exist, rather than allow the closures that have occurred, certainly since the second world war, to continue.
I understand that the RCA wants to maximise its profits. Betting on race courses is under threat from wider sports betting across the industry. The race courses feel threatened by the current environment. I can understand that. Both I and the joint chairman of the all-party group on racing and bloodstock, the hon. Member for Ryedale (Mr. Greenway), were present last night at the centenary celebrations of the RCA. Obviously, it is 100 years old, and we hope that it will keep together and continue to do the good job that it does in representing race courses.
One thing springs to mind that I would like the Minister to consider, in the spirit of compromise. The legislation is new, but is there any possibility that the transition period could be reconsidered and changed to seven years and therefore extended not to 1 September 2012, but to 1 September 2014? That would require regulation and have to come back before the House, which could be a stumbling block, but in the spirit of compromise, I should like him to outline to us his thoughts on that point.
I have spoken for quite long enough now, Mr. Conway. I think that Members on both sides of the House will make the same points that have been made already. My main point is that on-course bookmakers add to the atmosphere of race courses, and I want there to be as many of them as possible on every race course in this country, because they add to the flavour of a day at the races.
Derek Conway (in the Chair): Order. A number of hon. Members have indicated a wish to take part in the debate, and we need to call the Front Benchers to make their contributions at half-past 10. Hon. Members might like to bear that in mind during their contributions.
10.14 am
Mr. John Greenway (Ryedale) (Con): I shall be brief, Mr. Conway.
The on-course bookmaker is a unique feature of the British horse racing scene, and we put him at risk at the peril of racing, in my view. People who go to our vastly improved race courses have a choice: they can bet with the bookie on the course, or with the Tote. As I think that some here know, I have been an adviser to the Tote for some time, and the last thing that it would want to see is the demise of the on-course bookmaker. The competition between them is a vibrant part of the racing scene. I do not believe for one minute that anyone running a race course in this country wants to see the demise of the on-course bookmaker either.
Let us unite in the view that we must retain on-course bookmakers and the ability to bet on the Tote, which is a feature that does not exist in other parts of the world. If one goes to France, one can bet on the pari-mutuels, but not on the on-course bookmakers, which, quite frankly, apart from the fact that my French is not good enough to keep up with the commentary, I find a pretty miserable experience, compared with going to York, Newbury or Ascot, for example. Let us be clear about our objective.
It cannot be said that nobody knew that this was about to happen. It was put out originally in the Budd report, six years ago, and in the Government’s response in 2003. The Joint Committee that looked at the Gambling Bill, which I chaired, took evidence from the National Joint Pitch Council—we received a written memorandum from it—and oral evidence from bookmakers. The issue under discussion was not the relevant one at the time; the issue was the betting exchanges and the fact that the levy board was to be abolished, and probably the levy as well. That was the question.
I do not think that anyone quite knew the implications of this change. We have heard this morning about the funds that some bookmakers have paid for their pitches. We have all known for a long time that the current system is anachronistic and that generally there is support, even among bookmakers, for change. My right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) has campaigned on behalf of bookmakers in his constituency about those problems. In a sense, there was a need for change, which now has to be introduced in a way that is fair and preserves the racing scene that I have just described.
We need to take account of the fact that, as I have said, the levy was to be abolished, but now is not. On-course bookmakers have seen their margins reduced because of betting exchanges, which are growing. Of course, the abolition of off-course betting tax, which has been hugely beneficial to racing and off-course bookmakers, whose profits have grown, has put even more pressure on on-course bookmakers. There was a time when using an on-course bookmaker was the way to place a bet without paying tax, but that is the case no longer.
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