HL Deb 04 July 1960 vol 224 cc937-65

3.51 p.m.

Report stage resumed.


My Lords, I apologise to your Lordships for asking a question somewhat late, and I will delay you as little as possible. I should, however, like to add to the words of the noble Duke, the Duke of Devonshire, to the noble and learned Viscount who sits on the Woolsack over the way in which he received the Amend- ments (with which I entirely agree and should like to support) moved by the noble Lords, Lord Stonham and Lord Silkin, and by the noble Duke himself. There is one point on which I should like to ask a question, which may be relevant to the consideration the noble and learned Viscount has assured us he is going to give to this problem. When we come to the question of qualified privilege, would he look into the question of whether it would be possible for Tattersall's Committee to provide magistrates' courts with their official list of defaulters as reported to the Steward of the Jockey Club? It seems to me that if that list is sufficient evidence for a racecourse to refuse a defaulting bookmaker admission, or to eject him if he has obtained admission, then it would surely be sufficient evidence for a magistrates' court to refuse, or at least to consider refusing, or subsequently to withdraw, a licence to a bookmaker.

Finally—and this is very brief—the question of the number of cases has been mentioned by various noble Lords, and it may interest your Lordships to know the exact numbers. Over the last five years an average of about 20 cases per year of defaulting bookmakers have been reported by Tattersall's Committee to the Stewards of the Jockey Club. There may, of course, be others who do not bet under the names of bookmaking firms but in their own name, and it is therefore not easy always for Tattersall's Committee to get a clear record as to whether a complainant happens to be a bookmaker or punter. Be that as it may, at the present moment there are no fewer than between 350 and 360 names on the defaulters' list. I suggest to your Lordships, whatever may have been said in this House this afternoon, that that is a sufficiently high number to warrant the serious attention of Her Majesty's Government when they come to consider the Amendments that have been moved this afternoon.


My Lords, if your Lordships will allow me to answer my noble friend Lord Willoughby de Broke, I should like to look into the procedure. I take his point on that matter. I rather suggested a different procedure on the Committee stage, but if I may I will look into the Point again and write to my noble friend.


My Lords, I beg leave to withdraw the Amendment standing in my name.

Amendment, by leave, withdrawn.


My Lords, in view of the assurance given by the noble and learned Viscount the Lord Chancellor, I do not propose to move Amendment No. 2; nor do I propose to move Amendment No. 9 when the time comes.

3.55 p.m.

LORD SILKIN moved, after Clause 2 to insert the following new clause:

Bodies corporate

". Where a body corporate is the holder of a bookmaker's permit and any material change takes place in the composition or constitution of the corporation the corporation shall within 14 days give notice to the appropriate authority of such material changes.

If the appropriate authority is of opinion that such material changes justify a review or reconsideration of the grant of the bookmaker's permit they may at any time, after giving the body corporate an opportunity of being heard, revoke the bookmaker's permit or take such other action as they may think right."

The noble Lord said: My Lords, this is a new clause which is based upon an Amendment with the same object moved by the noble Duke, the Duke of Devonshire, on the Committee stage. I have endeavoured to improve on the drafting of the Amendment which was before the Committee, but I am not at all sure that I have succeeded. Indeed, it may be thought that I have failed even more than the original Amendment. But the purpose of this Amendment is perfectly clear. A bookmaker's permit may be granted to a company and the full information about the company is before the licensing authority, abut it can happen—and probably it does happen—that in the course of a year the character and constitution of that company has completely changed. It may have a different board of directors, a different shareholding, and a change of control. It may even have altered the memorandum and articles of association. All I am suggesting in this Amendment—and all that was suggested by the noble Duke in Committee—is that, in such a case, where there is what I have described as a "material change" in the constitution and composition of the company, that should be notified to the licensing justices.

They may say, "This is quite all right. We do not propose to take any action." In that case it would involve no material burden upon them. Or they may think that it is a matter which ought to be looked at further, and they may say, "We granted a bookmaker's permit to 'A' and now an entirely different concern is responsible for the permit and we should like to have further information. We should like the new person in control, the chairman of the company or whoever he may be, to appear before us." In that case they will have the right to call upon such person to appear before them and to decide whether or not the change is to the public disadvantage, or whether they can accept the change and allow the permit to continue. In this case I Clink it would be quite satisfactory if such consideration could be given at the quarterly meeting and, if necessary, the person holding the permit sent for and seen at the next quarterly meeting.

I do not think that this is likely to arise very often. As in the case of the previous Amendment, these cases are not likely to occur often; but when these changes do occur I think it is materially important that the justices should know of them and have the opportunity of deciding whether or not they want to continue the permit to the new company, as it may be in certain instances. I have referred to a "material change" in the composition or constitution of the company, and I have been rash enough to try to define "material change" yin Amendment No. 8. I shall not weary the House by describing What is contained in that Amendment. I merely suggest that if the noble and learned Viscount considers that the definition requires amendment, I shall be perfectly happy to accept any amendment that he might suggest as meeting the case. I am suggesting that the 'material change' is any change in the composition of the board of directors or of the Memorandum or Articles of Association of the body corporate or any change in the shareholding involving a transfer or change of ownership in the aggregate of more than 25 per cent. of those shares which possess voting rights". I think any of those circumstances would constitute a material change in the company and should be considered by the licensing justices. I beg to move.

Amendment moved— After Clause 2 insert the said new clause.—(Lord Silkin.)


My Lords, I think that there is something in this Amendment and I hope that the Government will give it serious consideration. I am very sorry indeed that your Lordships have decided that a bookmaker's permit can be granted to a corporation. In my view, the finest way of identifying a person is to use the word "person" in a legal sense by addressing yourself to an individual. Let me get to the point and give your Lordships an actual example. You all know my friend Angus McKay from Aberdeen and Jermyn Street. He is a bookmaker who has taken money off you before, and is likely to take money off you again. He is a gentleman who can apply for a permit, and no doubt a permit can be granted to him. But the other day Angus McKay told me that, in order to keep on better terms with the Revenue, he has decided to convert himself into a company and to call himself the Aberdeenshire and Jermyn Street Racing Corporation, Limited. It is going to be a small company, with an authorised capital of 100 shares of £1 each; he is going to own 99 shares; his wife, who is a decorator and carries on business elsewhere, is going to own one share; and, of course, you cart be quite sure that his brother-in-law, Alistair McKenzie, is going to take a debenture for £100 over all the assets of the business so as to safeguard completely and bamboozle all the creditors.

Now that company presents all kinds of problems. In the first place, when it comes to apply for a permit, I should like to know who is what and what is who. However, your Lordships have decided that such a company should be granted a permit. But later on Angus McKay may come to the conclusion that it is better policy for him to transfer almost all his shares in the company to his wife in order that he himself may own only one share, so that if he dies he will not be able to leave very much to the Revenue. In the meantime, the brother-in-law, Alistair McKenzie, may decide to exercise his rights under his debenture, and enter in and take over the assets of the company, and appoint himself receiver thereof. They still have a bookmaker's permit; and, in those circumstances, I submit that the position ought to be reviewed again, which is exactly what this Amendment provides.


My Lords, I shall not follow my noble friend Lord Meston into this romantic story of the latter-day activities of the Scottish Highlander, but the noble Lord, Lord Silkin, and the noble Duke have again raised a serious point. However, I remind your Lordships again, as I reminded you on the Committee stage, that, by sub-paragraph (b) of paragraph 17 of the First Schedule, a permit can be refused if the business to which it relates"— in this case the business of a limited company— would be managed by, or carried on for the benefit of, a person other than the applicant, being a person who would himself be refused the grant or renewal of such a permit … Thus, if a limited company is controlled (I use the word broadly) by an undesirable or dishonest person, a permit can be refused.

My Lords, I am anxious, as I have indicated before, that the procedure under this Bill should be kept as simple as possible, and I ask the noble Lord and the noble Duke to remember two things: first, that the main objective here is to prevent the company from being a façade for an undesirable person; and, secondly (this is a matter of law, and I do not know whether the researches of my noble friend the Duke of Devonshire into the law for the purposes of this Bill have carried him thus far, but in case they have not I will remind him of it to-day), that under Section 200 of the Companies Act, 1948, a person in accordance with those directions or instructions the directors of a company are accustomed to act is deemed to be a director and officer of the company, and his name must be included in the register of directors and secretaries. So that if the directors act under his control, his name must be included.

Now what I suggest is this. The noble Lord, Lord Silkin, has put forward three constituents as constituents of material change: first, a change in the board; secondly, a change in the memorandum and articles; and, thirdly, a change of more than 25 per cent. in the share holding. In my view, the first is the really important one. I do not think that it is likely that the memorandum will be altered into some such words as, "For the future, the object of this company will be to deceive and defraud the punters with whom it operates". It is not likely that we shall see a change in the memorandum and articles to that effect. Although the noble Lord, Lord Silkin, has very carefully considered the difficulties which I myself raised, on the question of shareholding you might, of course, have a small percentage which would affect the control. I am not making technical points to the noble Lord, but I put it in this way: that when you have got control by shareholding, your next step would be to have the board that you want, or else, as I have said, the position contemplated by Section 200, where you have a board which acts in accordance with your wishes. I think that the board is the serious thing here.

Now, my Lords, as to how it is going to "bite", if there were an Amendment saying simply that the company should at once report to the licensing justices any change in the board—that is, if an Amendment were put down making it a statutory obligation to be frank about changes—then, if the person complied with that, the justices would have full information; if they did not comply with it, and it came out at the annual meeting, when his licence came up for renewal, that he had not complied with it, then he would be endangering his licence. If that were done, and if we limited the matter to a statutory obligation to report any changes in the board, and assuming there was a complaint of the kind that the noble Lord, Lord Stonham, the noble Duke and my noble friend Lord Willoughby de Broke mentioned during the discussion on the last Amendment, then, when that complaint came up, there would be the material before the licensing justices as to the change in the board.

What I would therefore suggest to the noble Lord, Lord Silkin, is that he should withdraw this Amendment, and I will do my utmost to draft an Amendment (and if I do not, I will let him know, so that he can put one down) on that line, limiting the obligation to a statutory obligation, mandatory on the company, to report any change in the board. That is a simple matter, and there will not be any reason for them to say, "It was too difficult for us to do"; and the licensing authority will be in a position to deal with it with full information should any complaint arise. If the company do not do it, the matter is bound to turn up before the annual meeting, and from the very fact that they have evaded this statutory obligation the company will have jeopardised their licence. I would suggest that that is a reasonable way of attaining the desired object; and, if the noble Lord will agree not to press this Amendment, I will do my utmost to get an Amendment on those lines ready for the Third Reading, if that meets with the approval of the House.


It goes a long way. I do not attach all that importance to the change in the memorandum and articles; I thought I would do it that way as a matter of precaution. Nor do I think that it is vital to consider the shareholding composition of a company. I fully appreciate the importance of the notification of any change in the board to the licensing authority, but I should like the licensing authority to be able to do something, if they think it necessary. In most cases they will accept the change and take note of it at the annual meeting. But suppose that a company were ill-advised enough to appoint someone who had come to the notice of the noble Lord, Lord Willoughby de Broke, and the licensing authority were aware of that fact. In such a case is it reasonable that they should not be in a position to take any action until the annual meeting? Without asking the noble and learned Viscount to give a reply now, I would ask him to consider whether, in addition to making it mandatory on a company to notify the licensing authority, if the licensing authority, after considering the information given them, think it necessary, they should have the right to reconsider the question of licence. This would put the Amendment on the same plane as the previous one. In both cases, the licensing authorities would have the right to consider the position of the bookmaker in the light of new developments.


My Lords, I shall treat the noble Lord as not having sat down for the purpose of dealing with this point. I have very much in mind the possible action on the previous Amendment, and if we are able to devise a procedure, such as suggested by my noble friend the Duke of Devonshire, for looking into complaints, it might be possible to relate this (though I have not worked it out) to changes in the board of directors in the case of a company, but perhaps the noble Lord will allow me to think over this. I am alive to the nub of his argument—which is, that if changes are likely to produce a board which would operate badly or unjustly or dishonestly, that would be a most material change. I should like to consider this point, if he would allow me to do so.


My Lords, in these circumstances, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 3 [Authorisation and registration of agents by bookmakers and Board]:

4.13 p.m.

THE LORD CHANCELLOR moved, in subsection (1), after "unless" to insert: (a) he has attained the age of twenty-one years; and". The noble and learned Viscount said: My Lords, I have already taken the pleasant element of surprise out of this Amendment, because I used it for argument in an earlier one. Your Lordships will remember the circumstances in which this Amendment arose. Clause 7 makes it an offence if tit person has a betting transaction with a young person; employs a young person in the effecting of any betting transaction or in a licensed betting office; or receives or negotiates any bet through a young person. A young person is defined in subsection (2) as being a person under the age of eighteen. Under the Second Schedule, a young person may not be admitted to a licensed betting office.

During the Committee stage, Amendments were put forward by the noble Lord, Lord Stonham, which would have made the age twenty-one instead of eighteen in relation to employment in the effecting of a betting transaction or in a licensed betting office or receiving or negotiating a bet through a young person. His Amendments would still have permitted a person between eighteen and twenty-one to place a bet on his own behalf. These Amendments were opposed by my noble friend Lord Bathurst mainly on the ground that eighteen was a more appropriate age. But he drew attention to the anomaly that would arise under the Amendments, that it would be lawful for a person between the ages of eighteen and twenty-one to go to a betting office to place his own bet but not to take a bet for someone else as a friendly act. The noble Lord, Lord Shepherd, then raised the point that under the Second Schedule a principal bookmaker must be twenty-one, and he suggested that this age should be adopted also for a bookmaker's agent. This Amendment gives effect to the noble Lord's suggestion. It is achieved by an Amendment not to Clause 7, but to Clause 3, which deals specifically with the control of bookmakers' agents—that is to say (to use the opening words of the clause) persons who by way of business receive or negotiate bets as servant or agent to another bookmaker or to the Board"— that is, the Racecourse Betting Control Board. The Amendment simply says that such a person must nave attained the age of twenty-one. I hope that this Amendment meets the noble Lord's position. I beg to move.

Amendment moved— Page 3, ine 8, at end insert the said paragraph.—(The Lord Chancellor.)


My Lords, may I thank the noble and learned Viscount for meeting the point that I made on Committee stage? I heard the noble and learned Viscount's kind words with some, embarrassment, because I spoke for only a few minutes. However, I am glad that my few words had some effect, for it gives us some encouragement. We must keep on trying.


Beginner's luck!


Yes, my Lords. Again may I thank the noble and learned Viscount.


My Lords, I am extremely grateful for the extent to which the noble and learned Viscount has so far met the points I have raised. Does the Amendment mean that no person under twenty-one shall receive bets as a servant and take a bet for a bookmaker on the telephone or by post?


No, my Lords, it does not go as far as that. The Amendment does not alter the age limit for employment in the effecting of betting transactions in a bookmaker's office or employment in any capacity in a licensed betting office. Such persons are excluded from the operation of Clause 3 by the proviso to subsection (1). The Amendment refers to bookmakers' agents. I am sorry that it does not go the whole way, but it goes to the extent to which it was raised. It is an interesting compromise and we have met it in this way.


My Lords, before the Amendment is passed, may I thank the Government and the noble and learned Viscount on behalf of the Churches Committee on Gambling. Although it does not go all the way of the Amendments which my noble friend Lord Stonham moved, we are nevertheless grateful for what has been done.

On Question, Amendment agreed to.

Clause 17 [Gaming Machines]:

4.18 p.m.

THE LORD CHANCELLOR rose to move, in subsection (2), to insert as a new paragraph (a): (a) that not more than two gaming machines are made available for play in any one building or, where different parts of a building are occupied by two or more different persons, in the part or parts of the building occupied by any one of those persons; and". The noble and learned Viscount said: My Lords, if my noble friend Lord Astor agrees, we might discuss this Amendment and his together. But I am entirely in his hands.


My Lords, my Amendment covers a different point. I imagine that my noble and learned friend's Amendment will be passed unanimously and the major question might be considered afterwards.


My Lords, I will leave my noble friend's Amendment and deal with my own.

Clause 17 permits gaming machines to be provided in premises to which the public do not have access, but subject to two conditions: that the coin to be inserted does not exceed sixpence, and that the proceeds are devoted to purposes other than private gain. During the Committee stage, on the Question whether the clause should stand part of the Bill, my noble friend Lord Mancroft (who has asked me to express his regret that he is out of the country and unable to be here to-day for the Report stage) expressed some qualms about the possible results of the clause. He drew attention to articles which had appeared in the Press suggesting that a "racket" might break out in connection with the provision of "fruit machines"—and he referred to them by their colloquial name. He said that, whilst the clause laid down that the profits from the machines should be used for purposes other than private gain, such as for the benefit of club funds, in practice the owners of the machines would be able to demand rent for their hire. The suggestion was that "strong-arm" methods might be used by undesirable characters in other places to extort excessive rents from the innocent hirers of machines. The noble Lord asked me to look into the matter between the Committee and Report stages to see whether these suggestions were well or ill-founded; and, if they were well-founded, to see whether some precautions could not be inserted into the Bill to prevent what—as he put it [OFFICIAL REPORT, Vol. 224 (No. 90), col. 355]; is normally a pretty harmless and innocent amusement developing into a most undesirable racket". I have made such inquiries as I could in the period that has elapsed, and the police tell me that there is no evidence of any preparation to operate a "racket." But although that is the position, the observations made by my noble friend Lord Mancroft have led me to look at the clause again to see whether it is capable of being abused in ways which were not intended when it was inserted into the Bill. Its purpose is, of course, to permit the provision of gaming machines on a modest scale—because it is limited to a sixpenny coin—and they are to be used for purposes other than private gain. Your Lordships are aware of what I have in mind: that a number of working men's clubs and political clubs have a gaming machine, requiring insertion of a small coin, and the proceeds, after paying the rent, are used to help the funds of the club. I do not think that anyone would say that it is easy to get into the position of excessive gambling with a sixpenny machine. It takes 40 tries, on the basis that you have no success at all, to expend £1; so I think from that point of view your Lordships will agree that, if the machines are going to be permitted, that is a very modest amount. I think that most of your Lordships will agree that, so long as the machines are used for the purpose of a club or some political or sporting purpose connected with a club, this would not be a harmful matter.

There is, however, the possibility that the clause might be abused by the provision of fruit machines on a larger scale in establishments of a less worthy character than those in which they are mainly found at present. There is perhaps the possibility that a disreputable club, of the type we heard about in a recent debate, might establish a considerable number of fruit machines as an attraction for people to go there. It is true that, if the conditions of the clause were complied with, those responsible would not be able to use the profits of the machines for commercial gain, but they might find it worth while to provide facilities for gaming on gaming machines as an inducement to get persons to attend and to spend their money in other ways. If this fear is a genuine one, then it can be met without hindrance to the purpose which the clause is intended to achieve by placing a limit on the number of gaming machines which may be installed in any particular place. That is what the Amendment does. It limits the number of gaming machines which may be installed in any one building—for example, in a golf clubhouse—to two.

There are, of course, clubs whose premises are not separate buildings but form part of a more extensive building which is divided up between a number of occupiers. The Amendment deals with this kind of club premises by limiting the number of gaming machines to two in any part of a building which is separately occupied. Inquiries which have been made suggest that under present practice there are rarely, if anywhere, more than two fruit machines in club premises; indeed, most clubs which have a fruit machine at all provide only one. Thus the clause, with the Amendment, will go far enough to legalise the existing practice and, therefore, not prevent the moderate and reasonable assistance to club funds and other desirable things, without permitting the installation of so many machines that a harmless amusement is turned into facilities for excessive gambling or as an attraction for less desirable activities. The following Amendment is purely technical. I beg to move.

Amendment moved— Page 15, line 26, at end insert the said subsection.—(The Lord Chancellor.)


My Lords, I can quite understand the references of the noble and learned Viscount to those places and classes of clubs where these gaming machines may be installed and are often used for different kinds of club or sport purposes, or for charity. I always think it is rather a pity that such channels have to be relied upon in order to obtain the necessary subscriptions for such places. On the other hand, it does not seem to me that this Amendment meets the point of view—which I think the noble and learned Viscount clearly had in mind because of his reference to the fear of gambling—of the Churches' Committee. They feel that in certain classes of clubs, and it may be in other places, there is still a great danger that it would be attractive to gangsterism and the methods described by the noble and learned Viscount. So, in spite of the limitation put here, I should have thought that it would not be beyond the ingenuity of those who wanted to exploit this to get hold of a building and adapt it for the occupation of a number of tenants, and although the tenants might separately be regarded as genuine, nevertheless, there could be some gangster organisation in the background which would bring pressure to bear upon each one of the tenants concerned. It seems to me that this point has not really been met by this Amendment. Whether the matter can be dealt with on the subsequent debate on the other Amendment I do not know, but as it stands I must say I do not like this Amendment.

4.29 p.m.


My Lords, I sympathise very much with the object of the Amendment which the noble and learned Viscount has moved but, like my noble friend Lord Alexander of Hillsborough, I do not think that it will provide a sufficient safeguard. It says that there are not to be more than two gaming machines in any one building or in part of a build- ing in separate occupation. But what size are these gaming machines? I do not know whether they exist at present, but it would be a perfectly simple thing to build a gaming machine which could be one single machine but which 20 different persons could operate at the same moment. If it was arranged in such a way that the stakes were held up, it could easily be quite an accumulation of money which would eventually go to some successful individual. In addition, as my noble friend has pointed out, you might have a building which is sub-let to a whole series of persons who agree with the proprietor to take a portion of it, and who become the occupiers of those portions. You can have quite a large number of machines installed in the building, all readily accessible from one part of it to another.

More than that, it opens itself to other forms of abuse. The clause says that the stakes hazarded are to be applied either in the payment of winnings to a player of the game or for purposes other than private gain. Let us take the first step, that the stakes are all applied in providing winnings. It is a very easy thing to devise a machine, whose working will be known to the owner of it, with which, by taking a certain number or pressing a certain button at a certain time, the person doing so receives the winnings. There is no difficulty at all about that. It is a perfectly feasible mechanical operation, and if the law is going to be open to this you will soon find a number of ingenious people engaged upon operations of that kind. It will not be for the private profit, as I understand it, of the person who owns the machine. The person who gets the winnings will apparently be somebody quite different. No doubt he may be a relation or in other ways connected. It will be somebody the owner of the machine wants to benefit. But will it be private gain? It will be the winning of a stake or a number of stakes hazarded which, by this clause as it stands, is made perfectly legal.

Then let us to come to the other branch of it: that the stakes are to be applied for purposes other than private gain. "Private gain" is not defined in this Bill anywhere, if my memory serves me rightly. What is it? The noble and learned Viscount has suggested that if the winnings are devoted to the purposes of a club—a Conservative, Liberal or Labour club—that will be perfectly legal. It will not be private gain. No doubt Conservative, Labour and Liberal clubs are very necessary and commendable institutions, but what about other clubs, and what size will the club be? If somebody forms a club with half a dozen members and the proceeds are used for the benefit of that club, is that private gain? Where is the line going to be drawn? It seems to me that the whole of this clause wants the most serious reconsideration, and that the Amendment which the noble and learned Viscount has presented is not sufficient to cure the possible hazards which there are in it.

Incidentally, on this question of private gain, suppose that the machines are owned by a company whose memorandum and articles of association are framed in such a way that those who control it are not entitled to any dividend on their shares. Or suppose that it is framed in such a way that the profits made by the company are all going to be donated, not even to a Conservative club, but to a charity. Nevertheless the business of a company must be managed by somebody; it employs people who conduct the business. Those persons might perhaps be paid considerable sums of money for their services. Are those "private gain"? I do not know. It raises some intricate and interesting questions. If salaries paid to officers or servants of a company are not private gain, while profits nearly all disappear in that direction, apparently that will be perfectly legal. Therefore, with all respect, I submit that a little ingenuity—and I have not devoted any particular amount of time to trying to think this out—will find a large number of perfectly legitimate ways of evading the provisions of the clause, even amended as the noble and learned Viscount proposes.


My Lords, may I suggest that the points raised by the noble Lord apply to my Amendment which I am going to move, rather than to this restricted Amendment which has been moved from the Woolsack?


I do not think so.


My Lords, if this Amendment is carried, and the Amendment of the noble Viscount, Lord Astor, is lost, what is the position then?


My Lords, I think I can answer that question. One must remember that we are now on the Report stage of the Bill and, after all, this clause was explained on Second Reading. There was also the opportunity on the Committee stage for an Amendment that this clause should be omitted, and no such Amendment was put down or moved. I am now moving an Amendment which is restricting the clause—which is making the clause less generally applicable, and is limiting the number of machines. So the position as far as the noble Viscount who leads the Opposition and the noble Lord, Lord Douglas of Barloch, are concerned, is that, although I am not going the whole way in the direction of the Council of Churches, this Amendment is a step in that direction, and if it is negatived the clause will be still further from the position which the Council of Churches desire. So at this stage in the Bill, even from their viewpoint, they would be better off with the Amendment than with the clause as it stands.

The noble Lord, Lord Douglas of Barloch, made a very interesting speech in which he suggested the possibility of choosing winners in these machines. The only time in the course of my life that I have seen a jackpot won on a machine of this kind—that is when all the money in the machine comes out—was in a film called Duck Soup, when that happy position was achieved by a favourite film actor of mine called Harpo Marx. I do not know whether your Lordships remember Harpo, who never spoke. Somebody said to him, "Are you going to get the jackpot?" He gave that ineffable laugh and pulled the handle and the jackpot came out. That is the only time in my life that I have ever seen anyone win a jackpot on one of these machines. I do not think that the fear of the noble Lord, Lord Douglas of Barloch, is one of the more serious.


My Lords, would the noble and learned Viscount regard a £1,000 prize which is produced by "Ernie" as a jackpot?


My Lords, I have discussed that point before, and I am entirely behind my right honourable friend the Prime Minister, who was then Chancellor of the Exchequer, who introduced Premium Bonds. That is, as Mr. Kipling would say, another story.

The point that we have really to consider in this context is the fact that, as we all know, many most worthy working men's clubs and political clubs of all Parties have been having one machine, usually with a small coin condition, even when it has been illegal. We want to ensure that when it is used for a very creditable purpose it is possible, and that it will not be subject to abuse. I think that both the noble Lord, Lord Douglas of Barloch, and the noble Viscount who leads the Opposition would prefer that these things were not used at all, and they were worried about abuse. In the case on which the noble Viscount puts stress, I think the answer is that if a machine were put into every one of a number of rooms in one building it would be practically impossible for anyone to believe—it would be beyond the limits of human credulity, as seen by courts of law, if they did believe—that it was then used for something other than the purposes of private gain. In the case of the undesirable club, again if you have a limit of two 6d. machines I do not think that you are going to add to the temptations of that club. On the other hand, you are going to help the genuine club.

I think we have a reasonable compromise in this matter. On the basis that the machines are going to exist at all, we could not have a less objectionable limitation and it is a reasonable compromise between the points of view. It is with great respect, I assure the noble Viscount, for the views that he is expressing that I ask him to remember that there are other views as strongly held by members of, I should think, many thousands of clubs who will not abuse this. Therefore, I ask him to accept the Amendment.

On Question, Amendment agreed to.


My Lords, this is a consequential technical Amendment. I beg to move.

Amendment moved— Page 15, line 35, at end add ("and the expression 'building' includes the curtilage of the building").—(The Lord Chancellor.)

On Question, Amendment agreed to.

4.43 p.m.

VISCOUNT ASTOR moved, after Clause 17 to insert the following new Clause:

"Fruit machines"

". Notwithstanding anything in the last preceding section the Secretary of State may by order made by statutory instrument prohibit, control or regulate the sale, importation or use of gaming machines, including in particular the type commonly known as 'fruit machines'; but any order made under this section shall be of no effect until it has been approved by Resolution of each House of Parliament."

The noble Lord said: My Lords, I beg to move not the Amendment on the marshalled list but an Amendment that has been available in typewritten form. I approach this House in sackcloth and ashes for having raised this point so very late in the consideration of this Bill. My only excuse, which I give in all humility, is that I had devoted my entire attention to the betting side of the Bill and had not devoted sufficient consideration to the gaming side.

I think it is very important that we should consider possible abuses of these machines. They are an American invention, and they are illegal over a great part of the United States because they have been consistently abused by undesirable elements. They consist, as noble Lords know, of a machine in which you put a coin, pull a lever and a variety of cylinders revolve; and according to the particular level at which those cylinders stop, you win or lose. The makers and controllers of these machines can rig the odds against the investor as much as they want. The investor has no means of knowing how far those odds are rigged against him.

I submit that these machines are the most undesirable form of gambling imaginable. After all, if you go to the racecourse you have at least a pleasant day in the open air and a nice holiday. If you are a stay-at-home punter you have at least a pleasant hobby apart from your normal avocations; for following racing form gives people a lot of harmless pleasure. If you invest in football pools you have the interest of following football teams and discuss- ing their fortunes with the family. Even if you go to a gambling party you have the social occasion which goes with it. I have always been told that solitary drinking is the worst form of drunkenness, and I submit also that solitary gambling is the worst form of gambling. There is nothing to be said for this particular form of gambling. It takes place indoors; it is something which develops into a vice. One sees, not children but grown men, sitting pulling the lever; on and on they go, hoping to win against impossible odds. In a day when we are much too inclined to take our pleasures without using our minds, by watching television and so forth, this is the most senseless, demoralising, brutalising, animalising form of occupation conceivable. Have we really to think that members of political clubs do not care enough for their cause—that they are not prepared to give an adequate subscription—but have to go through this particular form of robbing their own members? I know that if the Episcopal Bench had been full I should have had support on this point to-day. These machines act, as I say, as a drug on the people who play them; it produces a mental stupor. The fact is that as soon as you have these machines, which are in effect, giving the person who makes them a licence to print money, everybody wants to "get in" on them in some way and abuse his right to operate them. By making it legal for the first time you are inviting everybody to see how it is possible to evade the law.

It is rather sinister, as one has seen in the Press, that the companies who make these machines in America are expecting a substantial export of these machines to the United Kingdom. As the noble Lord, Lord Douglas of Barloch, said, it is easy to produce ways in which to evade the intention of this law. I think that at this very late stage in the consideration of this Bill, it would be too much to ask Parliament to prohibit these machines altogether. Therefore I am asking instead that we should, by the clause I have drafted, give the Secretary of State power to watch how these things work. And if he finds evidence of abuse of the intentions of Parliament in any of these ingenious ways, he will have an easy way of making an order and bringing it to Parliament, in order that these abuses may be rapidly checked before they become a dangerous, well-established, public habit. The Amendment is intended to give him that preventive power, though one hopes that it may never be used. But there is here a very serious danger. When you see the way these machines are continually being raided, smashed and hurled into the Hudson River by the New York police, it seems rather absurd that we should be going to encourage their importation into this country, even for the worthiest clubs. So I beg to move this Amendment, in the hope that it will receive the support of the House, even though it comes rather late in the consideration of the Bill. I beg to move.

Amendment moved— After Clause 7, insert the said new clause.—(Viscount Astor.)


My Lords, the noble Viscount, Lord Astor, has made a most powerful speech in support of his Amendment, and I should like to support him. I am bound to say that I had not realised—and I imagine that not many people had realised—the extent of the evil or the gravity of these so-called "fruit machines." But if it is anything like so bad as the noble Viscount has told us, I am rather surprised that he did not oppose the previous Amendment, which authorises the use of two of these machines—and conceivably more—in any establishment. Nevertheless, I am not going to accuse him of inconsistency.


The last Amendment reduced the number of machines that could be used, and I regarded it as an improvement on the Bill; but I hope that this Amendment will improve it still further.


I thought the point was worthy of comment, because I am bound to say that, had I been aware of the facts the noble Viscount has just given us, I should certainly have objected to any fruit machines being permitted in any building at all. It is rather curious that, these machines having been prohibited, so far as possible, in the United States, we should be solemnly passing legislation here permitting two in any one building, and possibly considerably more where it may be found possible to get a decision that certain parts of a building are different buildings. For what it is worth, however, I feel that this Amendment should be supported.

If this is an evil, then possibly under this Amendment the Home Secretary could virtually prohibit the use of these machines altogether, assuming that none of them is made in this country. He could prohibit the importation and use of such gaming machines, and therefore I suppose that under this Amendment he could completely regulate whether or not machines should be in operation. On the facts given us by the noble Viscount, Lord Astor, which I imagine will not be seriously challenged, I certainly feel it is something that the Home Secretary should be empowered to do. It is a little late in the day. I should have been happier if we had had this point raised on the Committee stage, and had a chance to consider it more carefully. This is a rather unusual power to give to a Home Secretary. It is not normally his function to prohibit the importation of any kind of commodity; that is more a matter for the Board of Trade. But that is a technicality which I imagine can be put right, and on the assumption that what we have heard represents the facts, I am sure that we shall all wish to support this Amendment.


My Lords, before the noble and learned Viscount replies, perhaps he will help us by clearing up one or two points arising out of the noble Viscount's Amendment. I take it the noble Viscount, Lord Astor, is frightened of the future rather than concerned over the existing position At the moment there are a great many fruit machines in this country. I presume that they are made here and not imported, and I take it that this threatened American invasion is expected to come to pass after the Bill becomes an Act. I also take it that the existing position in regard to fruit machines is more or less satisfactory, in that where they are in use they do not attract the criminal element. The only machine of which I know is at my own golf club, where it contributes £50 or £60 a year to the funds of the club; and before I sit down I would point out to the noble Viscount, Lord Astor, that I have never seen anyone sitting down while playing a fruit machine, or doing so by himself. Usually there are people sitting round with glasses in their hands.


My Lords, may I add a word as one who must admit that he has considerably more acquaintanceship with these machines than most of your Lordships? I have met them in considerable quantities in other countries, particularly in Havana, in Cuba. I am quite convinced that the restrictions which are applied to the use of machines of this kind, under the provisions in the Bill as it stands at present, are such as to render them quite unprofitable and uninteresting to any commercial development at all. As the noble and learned Viscount on the Woolsack said originally, the limitation on the coin to be used to sixpence is a limitation so great that it is really not going to be worth people's while to gamble seriously. They will insert their sixpence rather in the same spirit in which they used to insert their two shillings on the Tote, having a little interest while not expecting to make their fortune.

Likewise, the limitation that all stakes hazarded are to be awarded to the winner of the game would, of course, eliminate the possibility of the machine's being so advantageous. But where that cannot be the case, in the alternative, a provision that the stakes hazarded are applied for purposes other than private gain would completely eliminate the interest of anyone who had any proprietary interest in the machine. In my submission that would make it quite evident that the only use to which these machines can be put is something other than a commercial use, such as charitable purposes, or for golf clubs and causes of that kind.

I would submit, however, that there is another rather more fundamental objection to the Amendment of the noble Viscount, Lord Astor. It is this. We in Parliament have got nearly seven-eighths of the way towards making this provision a statutory enactment. If we accept the proposal of the noble Viscount, Lord Astor, it would enable us to accept this completely as a statutory enactment in the Bill. But his Amendment is, in effect, such as to give the Secretary of State powers of himself to nullify what Parliament has decided, and I submit to your Lordships that this is not a desirable basis for legislation. For my own part, I hope we shall not accept the Amendment.


My Lords, I thought that that was not so under the manuscript Amendment, because, as I read it, that Amendment, whilst it provides that the Secretary of State can make an Order, that Order shall be of no effect until it has been approved by Resolution of each House of Parliament; and therefore the last point made by the noble Viscount does not really apply. I listened with great interest to the speech he made, and I quite agree that very often, under the present regulations, harm from these machines will not extend over a wide area. On the other hand, it seems to me that Clause 17—and especially the Amendment recently moved by the noble and learned Viscount and carried—certainly makes possible an extension of the use of these machines in other than clubs, or other clubs than the kind we have usually been talking about where these things are used for charitable purposes.

And on this particular Amendment we have not yet said much about its effect upon youth. I think that the more machines of this character that are installed, the larger is the area of demoralisation of young people in these matters. I hope very much indeed that your Lordships will be prepared to ask the Government to accept the Amendment moved by the noble Viscount, Lord Astor. I think it would do a great deal of good. It would give Parliament always a chance to be able to examine the position upon a Draft Order submitted by the Secretary of State. It would be subject to Resolution of both Houses of Parliament; and that Draft Order would be based upon the experience which accrues after this Statute-to-be has been put into administrative operation. We can see then the effect which has taken place, what the dangers are and whether they are increasing, and then leave it to the Secretary of State to bring in an Order and not to go through, perhaps, twelve months' legislation before Parliament considers it in the Executive form.


My Lords, if I may just accept the correction of the noble Viscount, I would say that he had the benefit of the manuscript Amendment in his hand and I had not.

5.3 p.m.


My Lords, I hope that my noble friend will not press this Amendment, and one of the reasons was very forcibly advanced by my noble friend Lord Brentford, in the part of his speech which was not disputed by the noble Viscount the Leader of the Opposition—that is, that a sixpenny fruit machine will never become the subject of serious commercial exploitation, because the amount involved is so small. Nor do I think that it will ever become a serious temptation. For those of your Lordships who have complete innocence with regard to this matter, I may say that there are machines with a much greater coin content than sixpence, and, in fact, I think there have been some with a lesser coin content—but very few. It is almost the lowest coin content there has been.

My noble friend Lord Jessel asked me about the position of construction, and I should be glad to deal with that, because your Lordships will realise that what is asked for in this Amendment is to leave complete powers in the hands of the Home Secretary to deal with almost every point. But the position is, as I have told your Lordships, that even to-day, when it is illegal, there are a large number of these machines installed in a variety of clubs up and down the country; and the position would be that, once they are legalised, then of course they could be, to the very limited extent allowed by the last Amendment, installed in working men's and political clubs, and in sporting clubs. Indeed, I think my noble friend Lord Jessel will agree that, if the Home Secretary were to go wrong on the number of figures, that might lead to an unpleasant "cornering" of the number of machines and to putting up the prices and rent.

But, my Lords, from all our information, the Government do not think that there is any fear that, without a form of control such as my noble friend Lord Astor proposes, excessive rents will be charged by racketeers. Once gaming machines become lawful, the price of rent levels will, by the normal operation of economic competition, become adjusted to the proper economic level; and although it may be, as my noble friend Lord Astor says (and he probably knows better than most of us), that there is some danger from foreign-made machines, the Government have no information on that. But we believe that if they came in, and there was an attempt to extort a heavier rent, they would be under-cut by machines made by manufacturers at home; and we are instructed that manufacturers at home have begun production. So there is no information that the Government have of this influx of foreign machines which the noble Viscount mentioned.

My noble friend Lord Jessel gave the picture, I think, of the ordinary user of this machine in one type of club, and I think in most clubs: somebody puts in a casual coin, or half-a-dozen casual coins, as he passes the machine on the way to a place where he is going to get sustenance, or even takes his sustenance and puts in the casual coin as he passes the machine. But I really think that the general picture my noble friend Lord Astor gave of a serious corrupting influence was overdrawn, and I would ask your Lordships to consider that in the light of your own experience of the clubs I have described, and the clubs my noble friend Lord Jessel has described, and also from the point of view of the experience of my noble friend Lord Brentford as to the unlikelihood of commercial exploitation.

I am sorry that the noble Lord, Lord Lucas of Chilworth, has left the Chamber, because he has been here during most of this debate, and he is missing the almost unique experience in your Lordships' House of hearing the Minister make an attack on an attempt at delegated and subsidiary legislation. The number of times on which your Lordships have seen my broad shoulders belaboured because I have endeavoured to introduce subsidiary legislation will be fresh in all your Lordships' memories. Now we have an example, not put in the Bill in the beginning of its passage through Parliament, but on the Report stage in the second Chamber which has considered it, of a provision to give to the Home Secretary the power of delegated and subsidiary legislation on the widest scale that has ever been known in any Amendment to any Bill since the late lamented Henry VIII applied his famous clause. After all, the noble Viscount who leads the Opposition is the most experienced ex-Minister in this Chamber, and if he can quote me an example of subsidiary legislation as wide as this in the whole of his Parliamentary experience I shall be extremely surprised.


My Lords, I will have a look.


The Amendment says: The Secretary of State may by order made by statutory instrument … control or regulate the sale, importation or … the use of gaming machines". The nearest equivalent is war-time Regulation 55, which was the widest war-time legislation that has ever been made. When my noble friend Lord Brentford raised this point the noble Viscount who leads the Opposition said, "Ah! But there is Parliamentary control. There has to be an Affirmative Resolution". I have heard the answer to that point many times when I have been responsible for subsidiary legislation. It is said to me, "What! An Affirmative Resolution—something we cannot amend; something which, when it comes before the House, we cannot override in favour of a better way; something which we cannot deal with? Oh, that will not do. If they are going to take wide powers like that, why does the noble and learned Viscount not put them in the Act?" How often have your Lordships heard that point?

My noble friend Lord Astor has done a service in drawing attention to this matter, but I hope that he will not make us all co-conspirators with him in an act which, if I had suggested it, would have provoked every constitutional fibre in your Lordships' bodies. For those relsons—good, bad and, I hope, amusing—I would therefore ask him not to press his Amendment.


My Lords, I have listened with great interest to the answer given by the noble and learned Viscount. When one has read Lord Hewart's book on the amount of delegated legislation which has been given, especially in the time of Mr. Lloyd George, by which Bills could be varied and even changed by an act of the Department, even without Affirmative Resolutions, I think it will be seen that the comparison by the noble and learned Viscount of himself with Henry VIII—


You, Sir.


—of myself with Henry VIII is not an entirely accurate one. But I am entirely to blame, and I come before the House in sackcloth and ashes for the fact that I did not raise this matter earlier, at Committee stage. It is entirely my fault; and, as I said at the beginning, I apologise profoundly for not having done so. I have done it in this manner only because I think it is important that we should not ignore the experience of what is happening in foreign countries as regards these machines. It is possible to hire them, and to have all sorts of undesirable arrangements by which pressure is put on the amount of the hiring, as the noble Lord, Lord Douglas of Barloch, mentioned. There is every sort of way of getting round it. After all, with even a sixpenny machine, if one can put in four sixpences a minute for, shall we say, eight hours a day, if you take a profit of about 25 per cent. of what is put in, you very soon clear between £2,000 and £3,000 a year. That is not bad, and with two of those there would be £5,000 a year coming in. It is all very well to say that it is a sixpenny stake only, but if you work the figures out it comes to quite a lot. However, it is obviously no use my pressing this Amendment to a Division, for I feel that I shall not have a victory if I do not carry the Government with me. Nevertheless, I hope that the Government will pay attention to the lessons to be learned from what has happened abroad, and will watch these machines and their extension, which we are making legal for the first time in this country, with the utmost care, vigilance and suspicion. Having said that, I feel I must withdraw my Amendment.

Amendment, by leave, withdrawn.

Second Schedule [Rules for licensed betting offices]:


My Lords, this Amendment is consequential on the introduction into Clause 5, by an Amendment moved by my noble and learned friend Lord Spens during the Committee stage, of subsection (5), which forbids the advertisement of licensed betting offices. I could explain the Amendment in detail, but I know that there is other business which your Lordships want to get on to. Therefore, as it is consequential on another Amendment, I beg to move it formally.

Amendment moved— Page 38, line 14, leave out from first ("premises") to end of line 18.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Back to