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House of Lords

Monday, 7th June 1999.

Reassembling after the Spring Bank Holiday Recess, the House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Bradford.

The Earl of Oxford and Asquith --Took the Oath.

Horserace Betting Levy: Offshore Bookmakers

Viscount Falkland asked Her Majesty's Government:

    How the interests of the British horseracing industry will be affected by the recent decision of a leading credit bookmaker to move operations to Gibraltar in order to offer clients tax-free betting.

The Minister of State, Home Office (Lord Williams of Mostyn): My Lords, it is far too early to tell. Bookmakers pay a levy on horserace betting and this is then distributed by the Horserace Betting Levy Board for the benefit of racing. If a significant portion of the betting market were to transfer to offshore bookmakers, then clearly the amount available to racing would diminish. However, we are a long way from that and are monitoring the position closely.

Viscount Falkland: My Lords, I thank the Minister for that Answer. However, has he perhaps understated the long-term dangers of betting being taken offshore in this way? Those who believe that the economic engine of racing is not gambling are probably deluding themselves, including the Treasury, which takes £0.5 billion a year. Any reduction of the pool of money from bookmakers will damage racing. If this is a gesture by one bookmaker to show the problems that arise from the tax being lowered in Ireland to 5 per cent and to push the Treasury into recognising that we are in a difficult position, action needs to be taken fairly quickly.

Lord Williams of Mostyn: My Lords, undoubtedly the betting industry funds horseracing to a significant extent. I agree with the noble Viscount that it would be foolish to overlook that. I declare an interest in this matter in that I formerly acted for Mr. Chandler, the bookmaker in question, in happier times from my point of view. If the newspapers are correct, he is proposing to offer telephone betting. Most people in this country do not bet by telephone. Over 90 per cent of the revenue that goes into betting is not in fact from credit telephone betting at all.

Baroness Trumpington: My Lords, does the Minister agree that the United Kingdom is the only

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country in Europe to have bookmakers? Would not the racing industry be far better off if there were no bookmakers?

Lord Williams of Mostyn: My Lords, I can certainly drop a postcard to that effect to Mr. Chandler. I am not sure that the noble Baroness is right. My recollection is that bookmaking goes on in the Irish Republic quite vigorously and quite successfully. It also goes on in the Isle of Man and in Orkney.

Lord Ewing of Kirkford: My Lords, my noble friend says he used to act for bookmakers. Is he aware that he was in the unique position, both in this country and probably in any other country of the world, of being the only person ever to make money from a bookmaker?

Lord Williams of Mostyn: My Lords, I am happy to think that that is probably correct.

Lord Peyton of Yeovil: My Lords, will the noble Lord ask himself why it is so much more comfortable to go racing in France and many other countries than it is here? Also--perhaps I am being a little simple here--will he encourage this particularly observant, opportunist bookmaker to encourage racing by giving directly to racing the extra money he will earn by not paying tax?

Lord Williams of Mostyn: My Lords, according to the newspapers, Mr. Chandler intends to return some of the money to horseracing. It is true that many people who attend horseracing in France find it much more agreeable than here, but many other people take a contrary view. I am told by my noble friend Lord Donoughue that Cheltenham Week is always well supported, and people are entitled to a free choice.

Lord Burnham: My Lords, the noble Lord says that 10 per cent of the betting turnover is from telephone credit betting. Does the Minister realise that Mr. Chandler's exercise also involves Switch and deposit betting? That means that 20 per cent of the levy, if it goes through, will be lost to racing.

Lord Williams of Mostyn: My Lords, I am not entirely clear on an authoritative basis what plans Mr. Chandler has in mind. I stress that I have simply been given newspaper reports. However, the point made by the noble Lord, Lord Burnham, is well taken. We need to monitor the situation carefully because, as the noble Viscount said originally, the revenues are critically important to the industry.

Lord Pearson of Rannoch: My Lords, bearing in mind the pressures which are being brought to bear upon

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Gibraltar from other directions, does the Minister feel that his client is well advised to have set up in Gibraltar as a tax-free exercise in the longer term?

Lord Williams of Mostyn: My Lords, I should like to make two points. First, he is not my client; and, secondly, if he were, I should certainly not be giving him free advice.

Lord Cope of Berkeley: My Lords, no doubt the Minister's former client will return some money to racing, but I think it most unlikely that he will return any of this money to the Exchequer. Therefore, can the Minister tell the House of other taxes where the revenue is similarly likely to vanish as a result of the spreading of electronic commerce, of which this is but one small indication of what will happen?

Lord Williams of Mostyn: My Lords, the taxation component of the charge levied on the punter is the general betting duty, which, at present, stands at 6.75 per cent. Of course, the levy, which is what the noble Viscount had in mind, stands at 1.25 per cent. In answer to the noble Lord's more general question, I could not possibly speculate about what devious minds--possibly devious accountancy minds--might think of in terms of avoiding duty. Obviously, the Revenue keeps a very close eye on such matters, but one needs to get this into perspective: this is one bookmaker who is talking about offering a single, limited service.

St. Helena Citizens and UK Access

2.44 p.m.

Lord Beaumont of Whitley asked Her Majesty's Government:

    What arrangements they are proposing to make to allow citizens of St. Helena free access to the United Kingdom in the interim period before permanent legislation can be introduced.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, all British dependent territories citizens are subject to immigration control. The Government are considering what interim measures might be possible for residents of St. Helena and Tristan da Cunha. These include an extension to permission to stay for those who, having completed full-time formal education, require to undertake supervised work experience to gain British professional qualifications; an agreement to grant full three-year permission to stay at the outset for those coming to Britain under the training and work experience scheme and the three-year employment scheme; and a named contact for St. Helenians to deal with for approval to changes of employer.

Lord Beaumont of Whitley: My Lords, I am grateful to the Minister for that statement; indeed, I welcome

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it. However, can she say how soon it is expected such arrangements can be put into practice so that, in the meantime, St. Helenians, who have had an acknowledgement of the injustice done to them by taking away citizenship, can enjoy their right to come to this country?

Baroness Symons of Vernham Dean: My Lords, all these measures are under active consideration. As the noble Lord will appreciate, they involve a number of different government departments. We hope that it will be possible to come to a decision by the autumn as regards all or any of the three measures I outlined.

Lord Skelmersdale: My Lords, can the noble Baroness say whether the legislation referred to in the Question will be primary or secondary legislation? If the latter, it could be implemented much faster should the department so wish.

Baroness Symons of Vernham Dean: My Lords, primary legislation will be necessary.

Baroness Young: My Lords, I welcome what the Minister has said. However, will she recognise in all her considerations the very great difficulty of St. Helenians in this respect? There is very little employment in St. Helena. Although we welcome the fact that St. Helenians are able to come to this country to gain educational qualifications, they need to be able to see the prospect of a proper future. That applies especially to the young. It is a very serious matter for the inhabitants of the island.

Baroness Symons of Vernham Dean: Yes, indeed, my Lords. Her Majesty's Government recognise the very particular problems experienced by people living in St. Helena. We are currently discussing with the United States the possibility of using the Wideawake Airfield on Ascension Island to facilitate more communication of an easier nature between St. Helena and the outside world. It is because we have recognised the particular employment problems of St. Helena that there are already some measures in place. For example, there is the taking of some 30 people a year on special work permits; in fact, we have about 60 individuals on these work permits at the moment. There are also one or two other measures in place to try to ease the employment situation.

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