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On-course Betting

Volume 458: debated on Wednesday 14 March 2007

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Roy.]

I and others requested this debate because of our concerns about the state of on-course betting. As the Minister will know—his officials will certainly have briefed him, and we have had a conversation about it—I have concerns related to a constituent and, beyond that, to wider issues about others who are involved in on-course betting. First, I draw attention to my entry in the Register of Members’ Interests.

The Minister and other colleagues will know, if they have looked back at it, that I held a similar debate two years ago in which I spoke about the problems emanating from the setting up of the National Joint Pitch Council back in 1998. My concerns were that the setting up of that body, which oversees and regulates the ring on race courses, was inefficient and chaotic. Many things were done without good reason and were unacceptable. Many bookmakers lost significant elements of their livelihood, and some lost their livelihoods altogether as a result, particularly in the southern area, which contains some of the most important race tracks in the world, such as Ascot, Newmarket and others that have become household names. At that time, I made the point that an agreement had been made to establish a formula whereby bookmakers would be integrated. It was essentially based on seniority, with any ties that would have been settled going back to starting dates.

I have since looked at the list from that time, and I have had two people do that integration, which was done without any great problem. One of them, Mr. Boden, made it clear that it could have been done in accordance with that formula, which was agreed at the time by the National Association of Bookmakers and the Horseracing Betting Levy Board as the correct way to do it. I showed in the last debate that, in the southern area, that was somehow not done as a result of key figures in the NJPC. That has led to incredibly weak and chaotic management of the NJPC, and bookmakers and on-course race-goers have suffered. That chaos has allowed other forms of betting to come on, and has disguised the fact that such things are often to the detriment of race-goers. I know that others will want to raise issues concerning Betfair online betting and so on. I am concerned that the bending and changing of the rules, and their arbitrary and chaotic nature, has led to the possibility of fraud in the system. It needs to be rectified immediately.

The issues have moved on since I last spoke to the House about them in July 2005. Almost everything that I have discussed since has confirmed my major concern about the behaviour of the NJPC and about its creation. More particularly, I have become much clearer about the extent to which the NJPC, the levy board and others have been prepared to disguise the events that took place and to block any call for a full inquiry.

Let me deal with some of the points that I raised in that debate; I hope that colleagues have had the opportunity to read the speech. In particular, I want to deal with the chaos and the failure to register some of the issues surrounding VAT and sales. In the last debate, I raised concerns about possible VAT fraud as a result of the chaotic management. Since then, I have spoken to a number of bookmakers. One in particular—I am prepared to give his name to the Minister afterwards—maintained that the sale of his pitch was not registered correctly, and others have said the same. He believes that VAT was not paid correctly as a result.

I have also spoken to a rails bookmaker, who told me that when he sold his position in 1998 he paid a full fee of some 26 per cent., in accordance with the rules, on a sale totalling some £210,000. That amounted at the time to some £56,000. It was at that level because it was not done in the auctions. He went on to say that there is one rule for the smaller bookmakers, but that when it came to the larger ones the NJPC failed to stick by their own rules. In 1998, Morgan Grenfell bought Coral from Ladbrokes for approximately £390 million. It appears that, strangely, it did not incur transfer fees as the individual bookmaker had done. Coral had an official position on the rails at the time and, like Mr. Wallis—the individual to whom I spoke—would surely have been due under the rules to pay such transfer fees.

NJPC rule 17.4 states that on the registration of any change in the shareholding of any authorised bookmaker, when the authorised bookmaker holds a senior position or positions, the appropriate registration fee and transfer fee shall be paid for each seniority position held by the authorised bookmaker. Rule 5.6 makes it absolutely clear that if a case involves

“the legal or beneficial interest in more than 50 per cent. of the shares”

of an authorised bookmaker

“details of such…control or interest must be disclosed in writing to the NJPC…within fourteen days of the commencement”.

That is clear, but Mr. Wallis said that a spokesman for Coral told him that when such a suggestion of a fee was raised by the NJPC, Coral threatened to take the NJPC to court and the NJPC quietly let it slip.

Interestingly, a year later, when Cinven and CVC bought William Hill, they received no request from the NJPC for a transfer fee. It appears that there is one rule for the big groups and one for the small. I raise that point because it illustrates the chaotic and incredible management of the NJPC, which has led to most of the problems.

Does my right hon. Friend agree that smaller on-course bookmakers have been hit by the closure of silver rings, for example, in places such as Kempton, and the threatened closure of silver rings at other race courses in the south of England? They lose a major capital asset, and the NJPC seems unable to co-ordinate any coherent compensation claim.

My hon. Friend is right. He makes an important point, which is illustrated by what I am saying, and I will develop it for the sake of the Minister. The organisation has been from the outset a complete chaotic mess. The result is damage to bookmakers and race-goers. The case that my hon. Friend raises is right; a number of people have said that to me, too.

Another example is the case of an individual trading under the name of Jack West, who told me that he discovered in the first auction in December 1998 that an unlicensed bookmaker—a pitch could not be bought by someone who was not a licensed bookmaker—had been allowed to purchase pitches against the NJPC’s rules. In fact, even worse, the NJPC had used the name of West, without his knowledge, to cover the transaction so that it would not appear that the sites were sold to unlicensed bookmakers. There were all sorts of similar things going on, involving Irish bookmakers and others who were not registered in the UK.

I had hoped to take part in the debate but sadly I have to leave to chair the Committee considering the Crossrail Bill. It is one of the great joys of my life, but I apologise for that.

My right hon. Friend has already raised two worrying issues. Does he think that the whole matter is a question of incompetence or is there slightly more to it? I have read the speech that he made on 6 July 2005, and it appears that he raised some important issues at that time. Those issues have not been taken note of and I fear that it is more than just incompetence. Something is going on that should be made known to the betting public of this nation who put considerable trust in the regulatory affairs of bookmakers. The issue is vital.

I am sorry that my hon. Friend has to go to chair the Committee on the Crossrail Bill—ever since I have been in the House people have gone to Crossrail and, as far as I can make out, some of them have never returned, which some people may say is a good thing.

The reality is that I do not know the answer to my hon. Friend’s question, but I know what bookmakers tell me and if any organisation in Britain with such an amount of money going through it was charged with running an operation in the way that the NJPC is run, there would have been inquiries from day one. If the stock market was in that position, there would be a hue and cry about it. However, with racing everything is swept under the carpet and nothing is done, which leaves the industry open to fraud. I am concerned that some of the people responsible and who benefited at the time are still around in the NJPC and are elsewhere involved in the decisions to be taken about racing in the future. Again, that would never have been allowed in any other organisation, yet in racing such issues go by the board.

Does the right hon. Gentleman agree that a key concern should be to protect the consumer—the person who puts the money on at the race course? Will he comment on the practice of laying bets off not on-course, but on the internet, which takes money out of the industry and is completely unregulated?

The hon. Gentleman has raised yet another vital point. I will not go into detail about that issue today because I know that other hon. Members wish to speak about it, but the chaos of the current situation has opened the door to exactly such a proposition. I have heard that some organisations offer the opportunity to regular or big punters to get the best price—deals that simply beggar belief, have damaged on-course racing and opened the door to those who are taking the money out, as he mentioned. I know that another hon. Member will make a speech about that issue, but I will say that if the NJPC had been set up and run properly, we would not be in such a position. The Minister needs to take account of that.

On the specifics of my last speech, I believe that the Department has been casual about this issue for too long. For years, the NJPC denied that when it was set up, it was meant to integrate the list for the southern area for reasons that I will come to in a moment. It denied that the full list of relevant seniority was passed by the southern area to the then general manager and chief executive, Mr. Clive Reams, in 1998. Although the denials of the levy board and the NJPC were emphatic at that time and at the time of my last debate in 2005, they have now had to do a complete volte-face and accept that those lists were provided exactly as they should have been and in sufficient detail to enable the integration in accordance with what was then the correct formula—the Stevenson formula. The levy board and the NJPC maintained in sworn statements in two court cases that those lists were not provided—that is a form of perjury. No one has raised that issue at all although it materially changed the cases in which they were involved. It is outrageous that for a period of time those officials continued those falsehoods and knew that their statements were not true.

We have also discovered that a bookmaker, Sam Harris, was at the same time threatening the NJCP with court action. The reason I have raised that important point is to ask why the NJCP and the levy board were maintaining that the changes made to the Stevenson formula—and we can prove that those changes happened—were done because the lists were not provided, which we now know not to be true. The answer is because the only rationale and reason for changing the formula was that the lists were not provided. Once that reason is eliminated, a pattern of events unfolds in which an individual has arbitrarily changed the rules. That individual, Mr. Reams, spoke to a journalist, and I have a note of the conversation in which Mr. Reams made it quite clear that he had changed the lists. He said that the change was put to the levy board yet it was clear that the board was told that it was necessary because the list was not provided correctly. He went on to say that many bookmakers lost out during the course of the change, which was not approved by the National Association of Bookmakers. I will show that not only was it not approved, but the association did not even know about it.

If the changes were not made because the lists were not given to the NJPC correctly, why were they made? I believe that that is linked to the case of Mr. Harris. In September-October 1998, Mr. Harris made the calculation that his pitch position at Ascot would not be correct as it was not good enough. He has clearly told me that he threatened Mr. Reams and the NJPC with legal action and, in the midst of that process, Mr. Reams arbitrarily changed the way in which disputes would be settled from starting dates to pitch positions. That had never been the agreed formula and no other areas had integrated bookmakers in that way. That would have benefited Mr. Harris and others. It is clear that in advantaging one or two people, many others were disadvantaged, including my constituent, Mr. Morrill.

Since then the Department for Culture, Media and Sport has carried out a cursory examination of what it described at the time as the timelines because, following a request from us, the Department had to decide whether an inquiry was necessary. I was astonished that despite the evidence given to the Department, we received a whitewash statement saying that everything was all right because changes had already been agreed. When I read the DCMS’s report I was astonished because I know that the views of those who were party to what happened did not bear it out. The key conclusion of the report is that the situation was okay because Mr. Reams had the power to make the changes and because the levy board was informed. However, we know that the levy board was not informed about the real reason why he made the changes and that there was no discussion with the National Association of Bookmakers, which was party to the original Stevenson agreement. It is an incredible supposition that those changes were ever agreed.

I remind the Minister that the NJPC had full responsibility for the integration of all bookmakers in accordance with the Stevenson report. Every other area did what it was requested to do by the NJPC and they all did so under the Stevenson formula. The one exception was the southern area, which did not because the NJPC acting under Mr. Reams, who decided arbitrarily to change the process, did so. Someone cannot change a formula applicable to the whole of racing in this country just for one area, without informing anyone they have done so or discussing whether others should also do so. What a chaotic mess. I cannot imagine any other national organisation acting in such a way.

Mr. Boden is a highly respected figure and was chairman of the National Association of Bookmakers when the Stevenson formula was set up. He subsequently became chairman of the Racecourse Association and SP Bookmakers Association—the midlands equivalent of the southern area Bookmakers Protection Association. He is absolutely clear that he and others who used the formula carefully applied it in their areas, as they had been requested to do. They did not make arbitrary changes as they knew that they were not allowed to do so. In the case of the southern area, for internal reasons relating to illness, the NJPC was requested to make the integrations. As we have established, it provided the list and the only reason for Mr. Reams seeking to change the formula would have been if he had received incomplete lists—we now know that he did not. Therefore, he must have had other reasons for changing the formula, which we are certain were linked with individual requests from bookmakers. However, worse than that, despite changing the formula he applied the Stevenson formula to some people and the new formula to others. Some people have benefited because they had pitch positions that are key and others have been left with seniority. In other words, not even the whole of the southern area was treated in the same way; some people were treated in accordance with Stevenson and, halfway through, Mr. Reams decided to do it differently for others.

A crucial letter was sent to the Department from Mr. Stevenson, in which he rebuts the series of statements made in the DCMS’s report and completely dismasts it. The letter shows that approval was never granted by the National Association of Bookmakers. In its report, the Department said that the integration of the southern area was carried out by Mr. Stevenson of the NAB and Clive Reams, the chief executive. In January, Mr. Stevenson responded to the report, saying:

“I have never had access to nor ever seen the southern BPA lists.”

He had nothing to do with the integration of those lists; it was left to Mr. Reams. It is amazing that that letter was not used to change the report.

Furthermore, the DCMS report maintained that Mr. Reams had faxed a letter to the southern area BPA referring to a revised formula that referred to the changes in the lists. In his letter responding to the report, Mr. Stevenson made it absolutely clear that he had

“no knowledge the Southern BPA replaced the Stevenson formula in preparing the new bookmaker lists by a revised formula”.

He made it clear that he had no understanding of that, and he went on to deny the DCMS statement that he had any knowledge that the so-called revised formula had been structured.

Worse than that, the Department’s report then made a significant number of sweeping statements saying that the number of appeals in the southern area was between 20 and 30, and that the appeal panel had judged them against the revised formula. Actually, there were some 300 appeals. Mr. Reams arbitrarily decided that only 20 or 30 should go forward to the appeals panel, at which he produced his summary statement—there was no other documentation—so that the panel could decide who should have been accepted and who should not. The panel accepted his statements. How remarkable.

One of the problems seems to be that the appeals system is run by the original decision makers and that cases cannot be reviewed further by anyone independent of them. I referred a constituent’s case to the ombudsman, who said that he could not deal with it. He said that although he could deal with levy board decisions, the case involved an NJPC decision; the NJPC was responsible for appeals and there was nowhere else to go.

The hon. Gentleman is absolutely right. The biggest problem was that the people hearing the appeals were all rooted in the original process and had no independence. Mr. Reams sat in front of them and gave them the summary documents. One member said later that he thought it was all over pretty quickly and that he did not know what the hell it was about. They certainly were never told that a new formula was in place. I have an interesting point to make about that later. The hon. Gentleman has hit the nail on the head.

The key is that there were more than 20 or 30 appeals, and Mr. Reams had arbitrarily ruled the others out. It is remarkable—one could not imagine it happening in any other organisation—that those hearing the appeal were unable to draw on any minutes because no minutes were taken during the appeals process. How lucky! It is staggering that an appeals tribunal took place with no minutes taken; certainly none were in the files—very convenient, say I.

Mr. Stevenson said in his letter—a letter that the DCMS refuses to pass on to my constituent—that to the best of his knowledge the national formula for the construction of the NJPC, unless it was the Stevenson formula, was not altered by anyone, and to suggest that the methodology was altered with his knowledge and agreement was “preposterous”. Here we have it. One of the key figures on the appeals panel, who was stated by the Department to have been present when the original changes were made, knew nothing of the changes or of a new formula. He was making decisions about bookmakers’ appeals on the basis of a formula that no longer existed; it had been changed but no one knew about the changes.

The DCMS is wrong. Mr. Reams did not give the correct reasons for the changes to the formula—and he did not inform the NAB that any changes had been made. As far back as September 2000, Mr. Marriott, the chairman of the NJPC, said that

“the principle of integrating away bookmakers had been established by the levy board before the NJPC came into existence and the precise method was agreed with the NAB in the summer of 1998.”

Mr. Marriott, too, seems to have been completely in the dark. The whole basis of the DCMS report has therefore crumbled.

In a letter dated 4 May 2006, in response to the Department’s statement, the southern area BPA maintained that it did not make contact. The Department’s document said that the during the appeals process calls were made to the southern area BPA, but the latter says that it did not receive any such calls. The Department seems to have accepted everything that the NJPC said, despite the fact that a huge number of documents from the files have strangely gone missing and that no minutes were kept of the appeals process. The Department seems to be saying, “Well, that’s all right then.” It is like asking the Department what it has to say and the Department replying, “That is jolly good. We have settled the argument now.” That appears to be what the Department has done.

The DCMS seems to believe that because Mr. Reams says that he informed the southern area BPA of alterations to the formula that it had indeed been informed. The Department seems to think that that was okay. In fact, the southern area had no power to change the formula. It made clear in a later press release that it did not agree with the system as reformed by Mr. Reams. Referring to the changes, it stated in September 1998:

“Sadly, that has not been the case and the system in use appears to have a number of flaws”.

However, it was not entitled to appeal against the process. Mr. Reams had established early on that one could not appeal against the formula; so the southern area and the bookmakers could not have appealed against a formula that had been changed without their notice. Even if they had known about it they could not appeal against it, so they were dismasted from the beginning and unable to make any progress.

I ask this question of the Department. Can it say to me and my colleagues, honestly and genuinely, that we have a system under which bookmakers who disagree with what has happened to their pitch positions are not allowed to appeal against the process that made them go into those position, and that because they appealed on the basis that the process that had been agreed had been changed arbitrarily, their cases were dismissed?

In other words, the whole appeal was a waste of time. How can people appeal about something that is not the same as what they are appealing about? Imagine in a court of law saying to a judge, “I want to appeal your decision,” and the judge saying, “Well, I’ll tell you what the rules are after you have told me what you want.” That is what we have here. It was made up as they went along. It is appalling. The rules were bent and changed, and appealing was a pointless exercise—as was discovered when most appeals were strangely dismissed out of hand.

Mr. Stevenson denies any involvement, contradicting the DCMS. Mr. Marriott denies knowing about the changes. I have even spoken to Mr. Fairbairn, who sat on the panel, but he had no recollection of any new formula being presented to the appeals tribunal. It is clear that at the heart lies Mr. Reams, who was—how shall I put it?—economical with the actualité.

It is absolutely clear that the chaotic state of affairs that existed when the NJPC was set up led to serious problems not only for my constituent and the hon. Member for Hove (Ms Barlow) but to those involved in the 300 other cases dismissed out of hand, not to mention those who did not bother to appeal because they had some sense of what was going on.

The levy board had a duty of care to oversee the changes and to ensure that the NJPC was set up openly, that it was in a strong position and that its affairs were conducted in an honest way. The board utterly failed in that duty, and the NJPC has since failed in its duty to clear up the mess. It is impossible to imagine any other organisation being allowed to continue like that without trying to resolve the problems.

Worse than that, the people who run those organisations are making statements in court that they know to be fundamentally untrue. The basis of the blocking was the refusal to accept and admit that such things could have happened. I am astonished that the Government have not decided to overhaul the system and to make reparation. I ask only for a full and proper independent inquiry into the setting up of the NJPC and its subsequent running.

We know that the Office of Fair Trading has been highly critical of the NJPC, including its present appeals process and its limiting access to the ring of a number of bookmakers. If we do not overhaul the system, we risk opening the door even wider to things that I know others will want to speak about, such as online betting and off-course betting, which are unregulated, are taking over and will frankly leave punters open to abuse. Far too many people involved in the process have subsequently benefited, and one has to ask to what degree fraud has taken place.

I ask the Department to take this opportunity and have the courage to say, “Enough is enough.” Unless we clean the house and clean it properly so that those who were damaged can have reparation, the Department will not be fulfilling its own duty of care. I know the Minister. We have had conversations on a number of occasions and I have a high degree of respect for him. I hope that in this case he will simply say to his officials, “This is not good enough. You do not accept the word of the NJPC or the levy board. We want a full and proper inquiry. Let’s clear this up before we establish racing in a new format at the end of the year. Otherwise, that will risk going the same way as this did.”

I congratulate the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) on selecting this subject for debate in the week of the Cheltenham festival, where the public face of racing is at its best. We know that jockeys are trying and that horses are trying. The crowd, the atmosphere and the craic are a great advert for racing. I would love to be able to report that I managed to pick the 40-1, the 50-1 and the 16-1 winners from yesterday, but sadly I did not, although I do have a fancy for a horse called Finger On The Pulse in the 4 o’clock, which might be worth an each-way bet today. I recognise that that statement could come back to haunt me, as this debate is being recorded.

The horse racing and gambling industry is at a crossroads. Allegations of fixed races, jockeys being charged and horses being doped do not present a positive image of the racing and gambling industry. My comments will concentrate on Betfair. Gambling is big business in the UK, generating £50 billion every year. Betfair takes up to 5 million bets a day—an astonishing number—and it takes those bets on the premise that every punter has a fair and fighting chance of winning, but how many people realise that they might be placing bets after the result is known, the race has been won, or the goal has been scored? That, to be frank, is where Betfair comes into disrepute.

Punters can be in a bookmakers or at home watching a so-called live transmission, not realising that the pictures are subject to a delay of six or even seven seconds. That is a long time in a horse race and even longer in a dog race, where the dog from trap 1 can be past the winning post when the rest of the dogs are not even at the final bend. I pay tribute to the News of the World campaign, which has highlighted the problem in recent months. It recently showed two pictures: one from terrestrial television and one from SIS—Satellite Information Services. On both the televisions, the time was exactly the same. On one of the televisions, the favourite and its market rival were coming to the last jump; that was on the delayed screen. On the real screen, which was showing the actual time of the race, the favourite had fallen at the last. People were betting in running on the favourite losing. People who knew that the favourite had fallen were betting on that. Many punters who were betting on the favourite did not realise that it had fallen at the last hurdle.

Clearly, someone who is betting in running and watching the race on a delayed screen is at a major disadvantage to someone who is at the track or someone watching on a different monitor. As I said, the problem is more pronounced in dog racing, where we are talking about one length per second—people can imagine the consequence of a six or seven second delay.

Horse race betting is about studying form. It is about watching the horses in the paddock and being aware of the breeding. It is about the punter versus the bookie, not about a punter versus a punter, particularly when one individual has an in-built advantage. Horse race betting is about identifying the winner before the race. It is not about betting to lose. It is not about betting in running when an individual could, frankly, be cheated out of his money.

A constituent of mine, Henry Spurway, was a traditional bookmaker in Scotland who with his company, Easibet, entered into partnership with Betfair in October 2002. He was not aware of these issues. He got the first licensed betting exchange in the UK and initially the concept was very successful, but problems associated with in-running betting and betting to lose lost him a substantial amount of money in a relatively short time. He has initiated a campaign, which I support, to ban in-running betting and backing to lose. Henry can be contacted at henryspurway.co.uk.

The problems that I have described apply not only to horse racing and dog racing, but to all sports. Let us imagine Tiger Woods on the final green, looking to birdie to win a tournament. I am watching a screen that is showing in accurate time him making that putt. Someone else is watching a screen on which the pictures are delayed by five, six or seven seconds. If I know first whether Tiger Woods has birdied that hole or missed that putt, I have an advantage over other people who are betting on the outcome. That applies to football and the taking of a penalty kick; it applies to cricket and tennis—indeed, all sports are affected and it is totally unacceptable.

Betfair claims that 400,000 punters use its system. How can that number of individuals be policed? In The Times a few weeks ago, on 20 February, Alan Lee stated:

“I am equally uncomfortable about Betfair patting themselves on the back for wrong-doers being brought to task. For while it is true that the name-sharing agreement between Betfair and the Horse Race Authority has aided the detection of corruption, this inconveniently ignores the fact that such corruption has first been facilitated by the betting exchanges. Peter Savill, in his time as chairman of the British Horse Racing Board, likened the scenario to a shopkeeper leaving his doors unlocked every night whilst also installing security cameras.”

Mark Tompkins, trainer and chair of the Newmarket Trainers Association, said on 25 February that

“if we had no betting exchanges a paper trail would not be necessary as people wouldn’t be betting to lose. If someone got rid of exchanges tomorrow, he’d be doing racing a big favour.”

He also said in the article:

“I’d prefer to see no betting exchanges. Hong Kong, for instance, won’t have them.”

Hong Kong is one of the leading betting arenas in the world.

My predecessor as MP for Livingston, Robin Cook, said that in life he enjoyed two thumps—the thump of ballot boxes going on to a table at the end of an election night, and the thump of hooves on a race track anywhere in the UK. I share Robin’s love and passion for horse racing. In-race betting and betting to lose are damaging racing’s image. Those practices have been described as a cheat’s paradise and I do not disagree with that description. It is time that they were banned.

I strongly support the initiative of the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith). His constituents, a constituent of mine and others have been comparing notes, as it were, to make the case stronger.

I have three points to make. First, the history of the self-employed people whom we are discussing—people who are not employed by a great state enterprise and who are trying to conduct their business, to be productive in the economy and to use their initiative—has been marred since the arrangements were changed nearly 10 years ago by the real administrative incompetence of the National Joint Pitch Council. I have records of a litany of unanswered letters and of complaints not dealt with. They were compiled by someone who kept meticulous records in an effort to do business as a successful self-employed person should. It is not satisfactory that, when the arrangements changed nearly 10 years ago, an organisation was created that was incapable of dealing fairly with day-to-day administration. That was the first cause of consistent complaint.

The second was the subject of my intervention on the right hon. Gentleman. The location of someone’s pitch is a personal matter and people feel strongly about it because it can give them an advantage on a particular course. It seems to me that, if one is dissatisfied, one is entitled to an independent adjudication that is properly conducted on the basis of rules that are known in advance and of which a record is taken, so that if anything goes wrong the matter can be considered somewhere else.

In my view the appeal process should be independent. Had I been aware of the proposed arrangements before the changes were made, I would always have so argued. I am the chair of the governors at a primary school. If we turn someone down for admission, the appeal goes to a group of independent people who can tell the school to accept the applicant. I think that all hon. Members would accept that that system is the right one. The lack of proper, independent systems is a fundamental flaw that the authorities in the racing world have never dealt with. It is not sufficient for the Horserace Betting Levy Board to say that it has oversight, but that appeals are none of its business.

The third point is that there is a legacy, certainly of incompetence and arguably also of corruption and preferential treatment based on personal motives, which causes disadvantage to individuals, many of whom have worked in and served the industry for a long time. None of us is arguing for a system in which, for example, being born in Chingford or Bermondsey or Devon would confer an automatic advantage over someone born in Ireland, for example. We are arguing that there should be rules that are agreed to be fair with the industry, and which are known and stuck with. People could then join a queue to make their application for a pitch.

Cash flow is not an easy matter for self-employed people. I have been to race meetings and I have put money on horses, and my parents were keen on racing and taught me to understand its importance. However, as the hon. Member for Livingston (Mr. Devine) said, based on his much greater experience, the reality is that finances in that type of business can be really tight in some cases. We are not talking about millionaires who have lots of money to invest and for whom the problems that we are discussing are unimportant. You can win a lot, but you can lose a lot too. Reparation is therefore an issue, and I want to add my plea for it to happen. My plea to the Minister is that, by whatever mechanism can be agreed—including on a cross-party basis in the House, and between those whom we represent—there should be an independent review of what has gone on, so that if people have clearly been disadvantaged there will be a way to give recompense.

The people whom we are talking about are alive and well and have not given up battling. They have merely failed to succeed in breaking through the existing mechanism, so we need another one. We look to Government to intervene, because it must be better to act politically and in the public arena than to go through the courts. There is huge interest in the success of the racing industry in this country; it is an important industry. If our race courses are to be places where people, including tourists and visitors, want to go, they need to know that the system is fair; and if we are to produce employment in the racing industry for people from this country, it is important that they, too, know that the system is fair. People will not enter the business if they think that they will be disadvantaged or that information will be withheld from them without recourse.

I hope that the Government response will be much more positive. Many people have been fighting this battle for a long time—years and years—but it is not too late to put things right. It is not too late to create a system that, when the arrangements change in the autumn, will be fair and will be seen to be so, with independent processes for dealing with complaints.

I too shall speak briefly, because I know that the hon. Member for Hove (Ms Barlow) wishes to say a few words.

I congratulate my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) on having procured the debate. I know from my own experience of initiating Westminster Hall debates that it is often on the second or third bite of the cherry that one sees action. He is absolutely right that the Department has a duty of care to ensure that the allegations of preferential treatment are put firmly to bed. He did not use the word “corruption”, but the hon. Member for North Southwark and Bermondsey (Simon Hughes) did. There should certainly be a level playing field—that is essential. Many of the concerns that were brought to light in my right hon. Friend’s speech would undoubtedly be open to judicial review.

I suspect that outsiders who are watching the debate might think that some of the discussion has been at cross-purposes. I say with the greatest respect to the hon. Member for Livingston (Mr. Devine) that he was talking about online betting. I shall do so, too. I believe that online betting is here to stay in this country. It should be encouraged and promoted to ensure that the best managed, most innovative and most ethical players can succeed, so that players who would tar the industry can be pushed away, rather than pushed underground. Remarkably, as the hon. Gentleman pointed out, some 5 million bets a day are made on Betfair, and I suspect that we ain’t seen nothing yet. We shall see far more online betting. However, that is not to say that the antics of the National Joint Pitch Council can be relegated to the past, because the sector of betting with which the council is connected will remain an important part of betting.

I confess that I am not a great race-goer. I was offered the chance to go to Cheltenham today, but because I am not a race-goer and because of the important debates that are taking place in the House today, I turned the offer down—although, as it happens, I shall miss the vote tonight because I have to attend a state dinner with the President of Ghana at the Guildhall, which gives me an excuse on matters of conscience. None the less, I should like to say a few words about the in-running betting that is offered by the UK betting operators.

I am close to Mark Davis, who is one of the managing directors of Betfair, and he has alerted me to some of the issues. It is only fair that some of them are put on the record, because when all is said and done I think that Betfair does a tremendous job. It is at the cutting edge of online betting, which is the way of the future. We need to embrace online betting, because it could bring tremendous tax revenues into the country. More importantly, we need to ensure that there is an acceptable regulatory framework so that those tax revenues do not go offshore, as has happened in the past.

All betting operators—including all the traditional high street UK bookmakers—offer in-running betting on most sports. Punters who bet on those sports generally watch the relevant events by means of what might be described as live TV pictures. The hon. Member for Livingston alerted us to the high-profile campaign in the News of the World about some of the problems that can arise in that regard. Depending on which TV channel an individual is watching, they might see the action with a few seconds’ delay. That applies also to normal television, if one compares satellite transmission with terrestrial channels. By definition, that means that other punters, or traditional bookmakers offering services to those markets on a race course, might have a slight advantage if they are watching the event on a different channel with a smaller time delay. However, it has always been the case that a host of variables can give an advantage to one gambler over another. The punter who has a copy of Racing Post might have an advantage over one who looks only at The Daily Telegraph. Likewise, an online punter with access to a broadband internet connection will have an advantage over another who relies on a slower connection, such as a dial-up service.

Is the hon. Gentleman able to give an example in which someone is betting on the outcome of an event that has already happened?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 man’s 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 commission—an 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.

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 system—I appreciate that there will be a new system from September—has a fundamental flaw?

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”—

the other appellant’s—

“appeal.”

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.”

It is crucial, but I just want to put it into context. The right hon. Gentleman’s 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.

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 Minister’s 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 did—the Minister just said so—so there was no reason to change the formula. There is a real discrepancy.

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 commission’s 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. Gentleman’s 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—

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 NJPC’s past decisions, particularly when the on-course bookmakers picking lists were combined in 1998.

The Minister said that my constituent and the hon. Lady’s 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.

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 morning’s 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 Commission’s main aims in carrying out its duties.

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.

I assure the hon. Gentleman that there has been dialogue with my officials and with the right hon. Member for Chingford and Woodford Green.

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.

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.

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?

I shall write to my hon. Friend to give the working group’s terms of reference and its composition, and I shall place a copy of that letter in the Libraries of both Houses.