I beg to move amendment No. 1, in page 1, line 9, leave out from 'betting' to end of line 12.

If we have to be in the House on a Friday, as our duties occasionally require, I cannot think of many better subjects for debate than the great sport of racing. We can think about what you, Mr. Deputy Speaker, are hoping to do tomorrow—that is, attend a race meeting—even though we might have preferred to be at one today or on some other Friday, perhaps during the recess.

My hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) asked as she came in, "Why are you amending your own Bill?" That is a good question and the explanation is equally succinct: it is that the amendment would, to all intents and purposes, put the Bill back in the same form as it was when it first entered another place. I want to persuade my right hon. Friend the Minister that the Government were wrong to insist upon an amendment being made in another place and that reversing it would make a great deal of sense.

There is one slight difference in that, as well as deleting the words,

"except bets on the outcome of any lottery forming part of the National Lottery for the purposes of Part I of the National Lottery etc. Act 1993",

the amendment would leave in clause 1 the words, "on any event", which were not included when the Bill was originally introduced in another place by my noble Friend Lord Kimball. I pay tribute to my noble Friend for successfully piloting the Bill through another place, with the support of several other Members of that House who are keen supporters of the racing industry. Many are active and loyal members of the all-party racing and bloodstock industries committee, of which it gives me great pleasure to be chairman.

Despite their not being there originally, it makes sense to keep the words "on any event" in the clause because those three words go to the heart of what we are seeking to do in this measure. The legislation that established the Horserace Totalisator Board permitted the Tote to accept bets only on sporting events. In March last year, other high street bookmakers began to accept bets on the outcome of the Irish lottery. Over the years, they have also constantly accepted bets on the outcome of other events, of which two come to mind. One, which clearly occupies the thoughts of most hon. Members, is the outcome of the general election, but there is also that famous annual bet on whether there will be snow on the roof of the Meteorological Office in London on Christmas day.

It is ironic that, had the Bill completed all its stages on 13 December—instead of being considered in Committee on Wednesday and proceeding to Report and Third Reading in the House today—we might well have got the Bill on to the statute book before Christmas, which was the first time for many years that there was snow on the roof of the Meteorological Office on Christmas day, and it would have cost the Tote a few shillings had it accepted bets on it. Notwithstanding that little difficulty, it is ridiculous that the Tote should be in the disadvantaged position in its 200 or so betting shops—as opposed to the 9,000 betting shops operated by the main bookmakers, especially the big three, William Hill, Ladbroke and Coral—of not being allowed to receive bets on the outcome of any event, sporting or otherwise.

I am sorry that I missed my hon. Friend's first sentence. I congratulate him on his consistently good work as chairman of the Racing and Bloodstock Industries Committee, which is a powerful, important body of which I am glad to be a member. However, bearing in mind the benefits that result from the fact that the takings of the totalisator board pass directly into racing, which is crucial to the survival of that great sport—we had Desert Orchid this week at the Palace to celebrate the 50th anniversary of the founding of the British Horse Society, which brings it to mind—would a percentage of takings from other than racing bets go into racing if they were allowed? The answer to that question would be crucial in forming my view. We need that in the racing industry, as my hon. Friend well knows, for the benefit of all punters, jockeys, horses, owners and so on.

My hon. Friend is a valued member of the committee and I am grateful for what he said about my chairmanship. I suspect that he knows more about horses than anyone in the House—the horse's friend indeed. We share, not only a love of horses, but a surname—not that we are related, at least in the recent past; we may have been, centuries ago.

My hon. Friend has put his finger on the point of the measure, which is to remedy the loss to the totalisator board's profits that has arisen as a result of its inability to take bets on events other than sporting events. From March to 20 December 1996, the Tote estimates that the profit lost as a result was between £1.5 million and £1.75 million. All that money would have gone directly to racing, and everyone who follows the racing industry knows how important it would have been.

A statutory instrument approved by Parliament on 20 December made it possible for the Tote to take bets on the Irish lottery, as all the other High Street betting shops had been doing. It is important to understand, however, that the loss of bets is not the only problem. Punters—the people who go into betting shops—want to have a pound or two on the outcome of the Irish lottery or other events, and if they cannot have that bet in a Tote betting shop, surprise surprise, they go elsewhere.

There has been a haemorrhage of regular Tote betting shop punters into other high street betting shops. That is why the figure of £1.5 million to £1.75 million is such a substantial proportion of the Tote's total profit of about £11 million a year. It has been deeply damaging. I was told by totalisator board officials yesterday that, since 20 December, the profit from taking bets on the outcome of the Irish lottery has been about £100,000 every four weeks, and that money goes directly to racing.

Will my hon. Friend spell out exactly how the profits are used to further racing? Are they spent on management of courses? Are they used to support the widows and orphans of jockeys who have been killed, unfortunately, in accidents? Exactly how is the money spent?

It is slightly outside the scope of the amendment but, with your permission, Mr. Deputy Speaker, I am more than happy—

Order. It is not for me to prejudge whether the hon. Gentleman responds to any intervention. However, I am listening attentively.

The simple answer is that the money from the Tote supports racing in several ways, especially by redeveloping race courses by creating new stands and facilities, but also by sponsoring races. I shall discuss that subject later during the debate on amendment No. 1 or, if I catch your eye, Mr. Deputy Speaker, on Third Reading.

The Tote is one of two funding bodies under the auspices of the Home Office which support racing. The Tote provides money direct because all its profits go to racing. The Horse Race Betting Levy Board takes money from the bets placed in betting shops other than Tote betting shops. That money amounts to about £56 million a year, and it is also used to develop new race courses but is primarily used to support racing through prize money. There are, however, many racing charities, which my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) rightly mentions, especially charities relating to horses, and those are also supported by both funding bodies. Racing is keen to ensure that the welfare of horses, and the interests of injured jockeys and so on, are strongly supported.

I shall now outline the key point about amendment No. 1. At present the Bill seeks to deny totalisator board betting shops the opportunity to take bets on the outcome of the United Kingdom national lottery. Rightly or wrongly, Ministers, especially those in the Department of National Heritage who have responsibility for the lottery, have convinced themselves that if bets were allowed to be placed on the outcome of the lottery, the lottery's turnover, and therefore the amount of money available for good causes, would be damaged.

The betting industry does not accept that argument. The evidence from Ireland, where bets are permitted on the outcome of the Irish lottery, is that such betting has not undermined the success of the Irish lottery. The people who buy lottery tickets from among the many thousands of high street UK national lottery outlets are not the type of people who usually go into a betting shop. I do not believe that there is any significant evidence that allowing bets on the outcome of the national lottery would seriously damage the lottery.

The lottery provides the opportunity to win several million pounds. This week, the mid-week draw gave £10 million worth of prizes to the person with the six numbers. A person would not get that sort of return from a betting shop, but he might get slightly better odds if he had three or four of the correct numbers. That is why betting on the outcome of the Irish lottery is so attractive.

I am grateful to the Minister of State, Home Office, my right hon. Friend the Member for Penrith and The Border (Mr. Maclean), for being present today. I make it clear that my support for the national lottery is unequivocal. It has been a tremendous success, and throughout the country many organisations—especially sporting bodies and charities, as well as the arts—have benefited enormously from it. Had we not had the national lottery, that money would not have been available. The fact that that money has come at a time when money for capital expenditure is tight is all to the good. I am grateful for what the lottery has done and is doing for organisations in Ryedale.

The lottery's impact on book makers and the football pools has been severe. I am pleased that the hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) is in the Chamber because, as a Liverpool Member of Parliament, she knows how devastating the effect of the lottery has been on football pools' income, as many of us in the House predicted.

We are not here today to talk about football pools, but the turnover in betting shops has been equally adversely affected. When people ask me whether—now that there is a second draw and talk of future draws—I think that the lottery is being a touch greedy, I find it difficult to answer in the negative.

I apologise to my hon. Friend for missing his opening comments. Both the racing and football industries can apply for lottery funds for various purposes. The fact that the betting industry is structured as it is and the national lottery is protected as it is does not necessarily mean that there is a bias against football or racing.

I hear what my hon. Friend says, but I am not sure that he is right. I am not convinced that the Sports Council—which would be the funding body—would be enamoured if commercial organisations were to start knocking on its door for funding for capital projects. But, to pick up on my hon. Friend's point, we need to ensure that the regime is fair and equitable, which is certainly what concerns the high street bookmakers, including Tote bookmakers. They are concerned that the lottery has too great an advantage and that it is time for us to come to terms with the fact that something needs to be done to redress the balance.

I should like to think that if the House accepted the amendment, bets on the outcome of the national lottery could be taken in Tote bookmakers. But even if we accept the amendment, that will not happen because the National Lottery etc. Act 1993 prohibits bookmakers from taking bets on the outcome of the lottery. That is why the Bill refers to part 1 of the 1993 Act—that legislation already prohibits any bookmaker from taking bets on the outcome of the United Kingdom's national lottery. If that prohibition already exists in primary legislation, which is binding on all bookmaking shops, including Tote bookmaking shops, why does it need to be included in the Bill? That is an important question because sooner or later the Government will make a move.

Sooner or later, the pressure will tell and the Government will accept that betting on the outcome of the UK national lottery should be permitted. When that happens, and if the Bill is approved by the House in the form in which it came from another place, we shall have to amend the totalisator board legislation again so that the Tote is in precisely the same position as other betting shops. We do not need a belt and braces; the braces are already in place through the National Lottery etc. Act. Only if that Act were changed would the Tote be able to take bets on the outcome of the UK national lottery.

If the provisions of the amendment, which were inserted in another place on the recommendation of the Government, are unnecessary, what is the answer to my hon. Friend's question? Why was the provision inserted?

My hon. Friend asks the right question. The provision was inserted owing to the concern of Ministers at the Department of National Heritage that, if the Tote legislation did not make specific reference to the national lottery, it might send a signal that it was all right to have bets on the Tote. I do not accept that argument, but it is the only reason that I can suggest. It must have been known that the Act already prohibits the taking of bets on the outcome of the lottery.

If that is so, can my hon. Friend confirm that the legislation enabling bookmakers generally to take bets on any event—legislation that was introduced when the sector was liberalised in the 1960s—has been amended in the same way as the Bill has been amended?

I am sure that that is right. I cannot give my hon. Friend a definitive answer to his question, but I understand that when legislation was introduced allowing the totalisator board to have betting shops, it was not envisaged that there would be a market for bets on events other than horse racing, greyhound racing and possibly football matches. The market has developed substantially.

I do not see why the Bill needs to contain the same provision as already exists elsewhere—unless and until the main lottery legislation is amended, it will not make a difference either way. But if we allow the Bill to stay in the form in which it came to us from another place, whenever the other legislation changes, the Bill will also have to be changed. I hope that my right hon. Friend the Minister will address that issue.

Following the prohibition on betting on the outcome of the national lottery, bookmakers—who are not noted for their lack of imagination in devising possibilities for betting—have introduced their own lucky numbers game. Shortly before Christmas they introduced a game called the 49ers, with 49 numbers. A person can bet on the outcome of the 49ers in betting shops. Legal action is pending which seeks to rule that the 49ers game is illegal and infringes the National Lottery etc. Act. It is not for us to decide, but that game has led to an increase in betting shop turnover of about 3 per cent. Tote bookmakers will be able to take bets on the 49ers game as soon as the legislation receives Royal Assent and comes into effect. Surely it would be better not to have the argument about whether there should be a separate 49ers game in betting shops—and instead allow betting shops to take bets on the outcome of the national lottery. That must be the sensible answer. Better odds can be offered for a few numbers, but the tens of millions of pounds in prize money which the lottery offers will not be available. People will not become multimillionaires. The prizes will be much smaller across the board, but people obviously feel that they would like the chance to get three or four numbers and perhaps a slightly better return, even if they will not have the chance of becoming a multimillionaire. That is a matter for them. As a government, we should be about giving people choice. They are being denied that choice because of a concern which is misplaced.

I believe that one day Parliament will agree that betting on the outcome of the national lottery is the only sensible way forward. If and when that is permitted, Tote bookmakers should be in the same position as all the others. The only way in which we can guarantee that they are in the same position from day one is to accept the amendment. Either way, for the moment bets on the lottery are off. But it will not be like that for ever.

I am grateful to you, Mr. Deputy Speaker, for giving me the chance to speak comparatively early in the debate. I must apologise to the House because it seems unlikely that I shall be able to stay until the end of the debate, as I understand that it is expected to continue for at least another hour and I have another appointment.

I am pleased to have a chance to support the hon. Member for Ryedale (Mr. Greenway) both in the Bill and in this welcome amendment to it. I suppose that some hon. Members feel that the hon. Member for Bury St. Edmunds (Mr. Spring) has the greatest racing interest in the House. I see the hon. Member for Ryedale shaking his head. Even if some hon. Members think that the hon. Member for Bury St. Edmunds has the prime racing interest, with Newbury race course, Lambourn valley—the so-called valley of the race horse—and all the Berkshire downs area in my constituency, I have a fair claim to be among those hon. Members whose constituency racing interests are greatest. I am delighted to inform the House that Newbury races are on this weekend. Any hon. Members who wish to travel down to my constituency are welcome to do so, even if they do not give me prior warning of their arrival.

I am not normally a betting man. I like to bet only on absolute certainties and sadly there are few absolute certainties when one is betting on what happens on the race course. For that reason, one of my most recent bets—I am not sure that it was not the last bet that I have ever placed—was on the outcome of the Newbury by-election, which was an absolute certainty. I am happy to say that I had a bet at four to one and won quite a lot of money.

What about the next election?

I am happy to tell the hon. Gentleman that I have every intention of laying an equally certain bet on the outcome of the next election in Newbury. I intend to make a certain amount of money on that, too. Unfortunately, the odds against a Liberal Democrat win there at the next election are much smaller than when I made the previous bet, so I will probably not make quite so much money this time. Never mind.

The Bill allows the Tote a much greater chance to take bets on any event. That is welcome. The hon. Member for Ryedale has made a number of important points, which I will not repeat. He said that it was unfair that if all bets on the lottery were made legal in the future, the Tote and in particular Tote betting shops would be handicapped. It is wrong that we should restrict one particular part of the betting industry. It is right that the Tote betting shops should be given freedom which may well be available elsewhere in the near future. So we should accept the amendment. I welcome the amendment and the Bill on behalf of the Tote and the racing industry, which is so important and provides so much employment, particularly in my constituency.

I am grateful to you, Mr. Deputy Speaker, for calling me to refer to the amendment. I use the verb "refer" rather than "support" because, although I have enormous sympathy with the very reasonable arguments of my hon. Friend the Member for Ryedale (Mr. Greenway), I make no apology for saying, I hope with characteristic modesty, that I am waiting for my right hon. Friend the Minister to give the official response to the amendment. As often happens with these matters, the likely situation vis a vis the national lottery is not so simple as Conservative Members would like in view of the implications of the expansion of freedom of choice, to which my hon. Friend referred implicitly and explicitly in his remarks.

I thank my hon. Friend the Member for Ryedale for tabling the amendment and making his arguments in an extremely reasonable way, as is characteristic of him. We are used to that. We appreciate his great knowledge of the industry and this important sector. I do not have that knowledge in equal measure so my remarks on the amendment will be brief.

We need further thought on the matter. I was impressed with the original text of the Bill. It is a short Bill. I was extremely impressed by the remarks of Lord Kimball. I suppose that everyone accepts that he is the expert of both Houses of Parliament on all these matters, including rural matters relating to horses, but not necessarily to horse racing and betting. His speech on 6 November last year when the Bill was originally presented in the other place was extremely reasonable. He showed the value of the other place in proposing legislation. We receive it with a considerable amount of pleasure in the lower House as we take it further today.

I welcome this type of legislation, particularly on a Friday. The officials in the Box trying to attract the attention of the Whip and my right hon. Friend the Minister will agree with me, I hope, when—

Order. The hon. Gentleman should address the amendment, not matters external to the Chamber.

As a European, I hasten to add—I hope without straying out of order, Mr. Deputy Speaker—that in some other European Parliaments Members can introduce private Member's legislation, which is so valuable in the House. We are all glad that the potential proportion of private Member's legislation has been increased under recent procedural changes.

I am chairman of the Anglo-French parliamentary liaison group. The Assemblée Nationale has a similar system of private Members' legislation. A Government Bill there is called a projet de loi whereas a private Member's Bill is called a proposition de loi. I do not know why I make that point, but perhaps it is interesting to see that private Members in the French Parliament can also deal with matters such as betting. In France, all betting is governed by the Tote whereas in Britain we have the private enterprise system of bookies, which many people prefer. Bookmakers take their own entrepreneurial view, sometimes in a quasi-cartelised way, which they are allowed to do under the law, and sometimes individually. If I remember correctly the modalities of the system, the Tote is based only on the weight of money inputs so it is a mathematical calculation done, I presume, by the Tote computer.

I welcome the expansion in the use of the Tote. It is a congenial way of betting. It is the way in which I mostly place bets. My hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) and I had the pleasure of going to the races briefly last summer, although we had to rush back for business in the House. Apart from that, I attended only the Cheltenham Gold Cup meeting last year, also briefly, on the most important day—I think the Thursday. So it was a lean year for attending the races, which is something that I like to do if time allows. There is no time for such things nowadays, for self-evident reasons.

The Tote is a popular form of betting. Its usage has increased in recent times.

I strongly agree with the reference made by my hon. Friend the Member for Ryedale to the fact that his informal uncle—not his real uncle—my hon. Friend the Member for Ealing, North (Mr. Greenway) has a deep knowledge of racing and horses. I have the pleasure of reminding the House that he also is an active visitor to the most famous riding school in my constituency, Suzanne's riding school, which is extremely successful and has done a great deal for riding for the disabled and other worthwhile causes. People in riding schools are interested in betting and use the Tote, as do other members of the public.

In respect of the national lottery, I would welcome other changes which have often been aired and are germane to the amendment—the degree to which the national lottery system should be protected or ring-fenced by arrangements such as those proposed in the original text of the Bill, which my hon. Friend's amendment would remove. Such protection was necessary, and remains necessary to some extent, because the national lottery is still new and we needed to see its effects. It has had a considerable impact, and even those who did not like the concept of a national lottery—many people are against even modest betting and gambling—or its structure in the United Kingdom have often changed their minds as they have seen the enormous sums deployed on worthwhile charitable and social causes throughout the country. In my constituency we have benefited considerably from national lottery money.

However, I remain firmly of the view that a system that combined a smaller total prize potential than the multi-millions that are dispensed regularly, with more reasonable odds than the astronomically large odds that are available, would be better.

May I suggest to my hon. Friend—

Order. We are not here to discuss the national lottery and the distribution of prizes. The amendment is specific, and I should be grateful if the hon. Gentleman would return to it.

I shall obey your advice immediately. Mr. Deputy Speaker. I was referring to the way in which the national lottery is protected by arrangements, which is germane to the amendment in one respect, but I shall not pursue that. I hope, therefore, that my hon. Friend the Member for Beaconsfield (Mr. Smith) will forgive me if, in response to Mr. Deputy Speaker's suggestion, I do not give way, unless he wishes to persist, with the permission of the Chair.

I wanted to ask my hon. Friend about the amendment. That might be in order. I agree that huge sums have been raised for charity by the national lottery and it has been a great success. Of course it is true that the competition to run it was won by Camelot, which has done an excellent job. However, the national lottery is a state-approved monopoly. Now that it is so firmly established, I do not believe that it needs protection. It has tremendous advantages in terms of advertising and is the single event on which no bookmaker or the Tote can take a bet. That cannot be right.

As I overcome my shock at my hon. Friend's insistence that I should refer to the amendment, I have a good deal of sympathy with his argument. That is why I am not yet persuaded what my own conclusion should be. I await guidance from the Minister.

Whatever the protection system of the national lottery—I understand and sympathise with my hon. Friend's point—an arrangement akin to the more modest payouts and odds system of the football pools would be congenial to millions of people when they consider the structure and characteristics of the national lottery.

I hope that my hon. Friend the Member for Ryedale will not mind my saying that I still have doubts about his amendment. I would like further guidance on it, as the original text seemed rational and would strengthen the role of the Tote and the board in a way that many citizens would appreciate.

I give a warm welcome to the amendment moved by my hon. Friend the Member for Ryedale (Mr. Greenway). I served on the Standing Committee that considered the national lottery Bill, and I recall the vivid debate that took place when the Minister, my hon. Friend the Member for Salisbury (Mr. Key), told the Committee that the success of the national lottery would in no way affect any outside organisations or interests. The debate was on protection for the pools organisations, Littlewoods and Vernons.

When the national lottery came into being, it was a success beyond our wildest dreams. It could not be threatened by any other organisation. On the contrary, its success threatened the survival of the pools promoters. Their take dropped sharply and they had to lay off staff, not in dozens, but in hundreds. Many of those laid off relied on the small sums that they could make from selling tickets.

10.15 am

We must also examine the effect of the national lottery on the Tote. People's betting habits have changed as a result of the lottery. Takings from the Tote have fallen sharply. Its income has gone down by at least £1.5 million—my hon. Friend the Member for Ryedale suggested that the figure is more than that. That in turn affects support for other organisations, such as race courses and welfare interests. The pools promoters, through the constitution of their bodies, set up the Sports and Arts Council Foundation and the Football Trust, which have also suffered a drop in funds.

It is in no one's interest for the Tote to suffer loss. It is invidious to suggest that the national lottery is threatened by the Tote. People cannot place a bet on the national lottery, but they can place a bet on the Irish lottery. A Goliath of the scale of the national lottery could be generous and a bit of a sport, and allow other organisations to compete in a fair if more modest way. They should all have a chance.

I hope that the amendment will be seriously considered by my hon. Friend the Minister, who is a reasonable man. If he will not accept it today, I hope that appropriate legislation will be forthcoming in future.

I shall take a few minutes to outline the Opposition's position. It is appropriate that I should follow the hon. Member for Sutton and Cheam (Lady Olga Maitland), as we spent many hours together in the Standing Committee that debated the national lottery.

It might cheer the hon. Member for Ryedale (Mr. Greenway) to know that, after the National Lottery etc. Bill was enacted, I spoke to representatives of the pools workers. Through their representatives in the House, they had presented their case for their business to be allowed to compete on fairer grounds. There was, of course, dismay that those representations were not heeded by the Government, but when I rang them and told them how disappointed we all were, they said, "Never mind, Jane, we are going out to put a bet on the national lottery to see whether we can be the first millionaires and bring the money to Liverpool."

That was the immediate reaction of local people. There is no denying that the lottery is hugely popular and successful, although I must confess to never having bought a ticket myself. When I go to my newsagents, especially on a Saturday, and see my neighbours standing in queues, I regard it as quite an achievement, and to the Government's credit, that they have found a way of encouraging people to stand in queues at their newsagents to pay their taxes to the Exchequer.

The national lottery introduced scratchcards in an attempt to continue to allocate £15 million per week to good causes, and it has now initiated a midweek draw to sustain its sales. When debating the lottery's potential impact, we considered the fact that sales would tail off as public interest inevitably waned and people realised that they had only a slim chance of winning. That has not yet occurred, although it is too early to predict when—if at all—it will have an effect. I hope that it will not.

In the circumstances, we want to review carefully the case for allowing bookmakers and the Tote to accept bets on the outcome of the national lottery. Any decision to allow it must depend on a demonstration that there would be no significant impact on the £15 million per week that the national lottery allocates to good causes. Therefore, I hope that the Minister will resist his hon. Friends' arguments at present. We do not oppose the amendment in principle: it is a matter of waiting to gauge the impact of the midweek draw. In time, perhaps we will be able to demonstrate that further deregulation and relaxation of the gambling regulations could take place without any detrimental effects on the national lottery.

This issue is important in my constituency as the Ladbroke Group pic is the largest employer in Harrow, West. Its telephone betting centre in Rayners lane is not a small operation—it looks more like Houston mission control, with a huge bank of monitors and many people taking bets over the telephone. The point of the amendment moved by my hon. Friend the Member for Ryedale (Mr. Greenway) will not be lost on my constituents who work at that centre and those who work in the betting offices of Ladbroke's and other companies throughout the country.

I believe that the national lottery is run spectacularly well by Camelot. Many people attacked Camelot initially and took a rather rose-tinted view of the other applicants, but Camelot is now returning a maximum amount of money to good causes and its running costs are less than those of some applicants who claimed that they would be doing us a favour. The success of the national lottery has had an inevitable effect on other associated industries. I believe that most people who complain that the lottery is affecting their businesses or charities are not telling the whole truth. I believe that they blame the national lottery simply because it is convenient and they know that their claims will receive press coverage.

I am surprised by my hon. Friend's comments. Some £5 billion is bet on the national lottery each year, and that has clearly had some significant macroeconomic effects. For example, there is a large black hole in value added tax receipts, and research suggests that that is partly because consumer spending that would have been VAT-able has switched to the national lottery. Therefore, I think that it has had significant effects on businesses and charities throughout the country.

I agree that the national lottery has had a significant effect on the pattern of retail sales, which has led to the black hole in VAT receipts that my hon. Friend mentioned. Some charities—particularly those that sell scratchcards—have been seriously affected. I was referring to those who claim to have been affected by the national lottery, but whose pattern of fundraising was clearly very different and did not appeal to people who spend money on the lottery. However, some bodies, such as the betting industry, have clearly been affected. Scratchcards have had a huge impact. The average bet on a horse race is about £2.60.

Plus tax.

My hon. Friend is very knowledgeable in such matters. People would buy their newspapers or cigarettes and spend the change from a fiver in the nearest betting shop. Such sums constituted a substantial portion of the betting industry's income. People now choose to buy a couple of scratchcards, so the money is going directly to what my hon. Friend the Member for Beaconsfield (Mr. Smith) described as a national monopoly rather than to the private industries that run betting shops. I praise the way in which the big betting organisations, such as Ladbroke's and William Hill, have lobbied for change on a purely factual basis. The levy was altered in the Budget before last in order to ameliorate their losses.

Does my hon. Friend agree that we should adopt a real partnership approach to the betting industry and its support for racing? In that regard, do he and his constituents who work at Ladbroke's headquarters in Harrow share my joy at this week's announcement that Ladbroke's has finally done a deal with Tote credit?

Ladbroke's advised me that that was about to happen, and it is very good news for my constituents and for the many people who work in betting shops throughout the country.

And racing.

It is also good news for the racing industry. I have described to the House why the national lottery has substantially affected trade patterns and reduced the amount of trade in betting shops. As hon. Members have said, the industry has applied to be allowed to take bets on the lottery lucky numbers. That practice has not had any adverse effects on the success of lotteries in other countries, and such bets can be made on the lucky numbers in the Irish lottery.

I think that the time has come to have enough confidence in the national lottery and its continued success to allow private bookmakers to take such bets and begin to rebuild their businesses. That would be fair and reasonable, and it should not affect the success of the national lottery. The only factor that is liable to affect its success is the Labour party's wild talk about changing the contract completely and increasing Government control over the way in which the money is used for good causes. As the national lottery is such a great success, we should allow those bets to be made.

I understand why the words that my hon. Friend's amendment seeks to remove are in the Bill. We all know that, in a usual Session—let alone a short Session such as this—private Member's Bills are very delicate flowers. Unless they enjoy the support of all hon. Members—but notably of the Government and the official Opposition—they do not stand a chance of being passed. I understand why the Government said, in line with the policy that they have so far adopted, that they could not allow an extension to allow betting on the national lottery to take place when my hon. Friend the Member for Ryedale decided to insert the clause, but I urge them to think again. I ask them to think about those who work in the betting industry throughout the country and to think about the solidity of the national lottery. I hope that the Government will accept the amendment and the Bill so that we might bring some justice to an injured betting industry.

I (shall speak against the amendment, but I hasten to assure my hon. Friend the Member for Ryedale (Mr. Greenway) that I strongly support the Bill as originally drafted.

My hon. Friend the Member for Ryedale said that he felt that the law would be clear because of the implications of the National Lottery etc. Act 1993, and that removing part of the clause would not immediately allow the Tote to accept bets on the outcome of the lottery. I believe that there would still be an ambiguity in the law. If the Bill were enacted, it would appear to allow betting on any event, whereas the National Lottery etc. Act 1993 appears to prevent it. For the purposes of clarity, surely it would be best to leave the relevant part of the clause in being.

My hon. Friend was honest with the House in that he argued that betting should be allowed on the outcome of the national lottery. He was perhaps keenest to advance that general argument, which has been taken up by other contributors to the debate. It is a valid argument, but I feel that this is the wrong moment to embark on it. This is a complex subject and, given the passions that were aroused during our deliberations on the National Lottery etc, Bill, perhaps we should consider it in more detail and debate it more thoroughly. I believe that that debate should be based on more detailed research and evidence. I would say that it is valid for us to trot round the course this morning. We might even say, "Lay your bets now." This is not the moment, however, to start the race. That should be left for a future occasion.

If the amendment allowed bets to be placed on the outcome of the national lottery in the Tote, we would immediately have the ludicrous and contradictory situation of such betting being allowed on the Tote but prohibited in betting shops.

No. I understand my hon. Friend's confusion. The National Lottery etc. Act 1993 prohibits all betting on the outcome of the national lottery, whether in Tote betting shops or in other high street betting shops.

I am aware of that. With respect to my hon. Friend, perhaps he was not listening to my argument earlier. I said that what he has outlined was probably the case, but that I thought that there might be an ambiguity if the Bill becomes law, the amendment having been agreed to. The interpretation might be that the Tote could accept betting on the outcome of the national lottery. If that interpretation was made by the courts, we would have the ludicrous situation of national lottery outcome betting being allowed in the Tote, but not in betting shops. That would be unacceptable.

I am saying that if the House wished to alter the present implications of the National Lottery etc. Act on betting on the outcome of the national lottery, that should be done across the board and not only for the Tote. Betting shops should be included as well. We should consider briefly whether it would be a good thing for the Tote to be allowed to bet on the outcome of the national lottery, even though I think that we should put off a final decision until a later date.

There is a danger that the national lottery might be damaged. We need to assure ourselves beyond all doubt that that would not be the outcome. It has been said that the national lottery has been an unparalleled success, and more successful than expected. That success is demonstrated by the fact that money put on the national lottery has to an extent come from money that would have been used for betting. Indeed, the betting industry's turnover has fallen if the national lottery is excluded. If it is included, the industry's turnover has increased. In other words, there has been a substitution. That is strong evidence that the national lottery has been a success. It is also evidence that when we change what is permitted in betting there is a slightly unpredictable change in the amount of money deposited in the different sections of betting. On that basis, we cannot be certain that if betting is allowed on the national lottery outcome there will not be a similar change, with a haemorrhage of funds flowing away from the national lottery towards betting on the outcome of the lottery. There could be some damage to the lottery, which needs to be researched and, wherever possible, quantified.

I am not sure whether my hon. Friend is saying that, if there is any damage at all, that settles the matter. It is entirely understandable that, initially, the Government wanted to provide a protected environment for the national lottery. Camelot made assessments of the likely turnover, which have been wildly exceeded. The money that is going to good causes is much greater than forecast. Surely in those circumstances the national lottery could have the confidence to be able to take on a bit of competition.

I accept my hon. Friend's point. I am not saying that we must be certain that there will be no damage to the lottery; I am saying that we need to consider, on the basis of the best research available, what is likely to happen. We must ensure that any predictable damage is fairly limited. It is the degree of damage that is important. I am sure my hon. Friend accepts that, if the damage could prove fatal, we would have to consider carefully any argument for changing the law. We must consider carefully the impact of any change and achieve the right balance. That is precisely the purpose of current legislation. Before we introduce change, it is incumbent on us to be certain that there will not be unacceptable damage.

There is a second and important argument that needs to be taken into account when we consider whether at some future stage the Tote should allow betting on the outcome of the national lottery. The purpose of the national lottery is different from the purpose of other sorts of betting. Its objective is entirely altruistic. The national lottery does not aim to make profits for itself, for its own purpose, or for its owners; it aims to generate moneys to be spent on good causes. That is one of the reasons why the lottery is so popular.

Betting on the outcome of the national lottery is a different matter, because that betting would presumably be run for profit, or in the case of the Tote there would be a specific objective. There is perhaps a moral argument, but certainly there is different motivation. That is an important point to bear in mind.

I am seeking information. I am not enough of a mathematician to be sure about the matter, but presumably the danger is that the odds offered by the bookmakers, and by the Tote, would be more generous than that which would be the equivalent gain from the national lottery system.

I, too, am not an expert mathematician. My immediate instinct, however, is that my hon. Friend is correct. The result must be that many people who are now attracted by the national lottery might instead be attracted by something similar to it and linked to it which offered them a greater chance of gain. That would substitute money that currently goes on the national lottery for money that goes on pure betting but does not produce the beneficial outcome—proceeds for good causes.

One does not need to be a great mathematician to understand that the odds in the national lottery are fixed, regardless of the number of people who participate, so the risk-return ratio changes as the prize gets bigger. That is unlike, for example, Tote betting, where the odds are adjusted according to the number of people betting on particular outcomes. The betting would swing towards benefiting either the national lottery or the Tote, depending on how big the rollover—the main prize—was. It is a complicated assessment to make, but I imagine that many people would be interested in working out all the parameters.

My hon. Friend is clearly a great mathematician—a true Pythagoras. I am grateful to him for such a clear explanation and complex calculation. It reinforces my point—there is potential danger to the national lottery if we allow betting on its outcome.

I simply suggest that this is not the moment to enshrine in law a significant change in the way in which we view the national lottery. The issue will no doubt be debated at length on some future occasion and, in the fulness of time, it might be right for the House to change the law. I would not necessarily oppose it for all time, but this is not the right time to make the change. For that reason, in principle, I oppose the amendment.

My final concern about the amendment relates to the nature of the Tote. Because the Tote channels money into one sport—racing—we must bear it in mind that, to an extent, money spent on the Tote goes to that one final cause. It is a good objective and I would not criticise it in any sense, but so far the Tote has operated to allow the profits from betting on sporting events to go into a specific sport. That seems to be a sensible balance, but the Bill would change that to allow the proceeds from betting on any event to go into one sport—racing. That is a limited and reasonable change to the Tote, but to go a step further and allow such a wide change that betting could take place on the outcome of the national lottery and then to allow the proceeds from that to go into one good cause—racing—strikes me as a change of a different order.

I merely question whether it is healthy for the Tote to develop so widely. Perhaps it could be argued to the contrary but the matter must be looked at carefully and I urge a note of caution. The matter must be examined more closely than the Bill seems originally to have intended.

This is a good Bill, and I support it. The amendment, however, widens it too much, which is why I oppose it. The issue it addresses may be worthy of discussion in the future, but not now; we should stick to the original Bill.

I congratulate my hon. Friend the Member for Ryedale (Mr. Greenway) on piloting the Bill through the House. I also congratulate my noble Friend Lord Kimball on introducing the Bill in another place initially. It is an excellent Bill, which supports an excellent organisation: the Tote.

On the issue of whether the national lottery should be the only future event on which bookmakers and the Tote cannot take bets, I have corresponded at length with the Department of National Heritage on behalf of one of my constituents, the business development director of William Hill, Mr. Ian Spearing. William Hill has an interest in the matter, but I think that it is right on this issue: the time has come to make a change.

I understand that, initially, it was right that the national lottery should be protected because we wanted it to be a success. It has been a huge and overwhelming success, and has far exceeded expectations. The Government should now show their confidence in the national lottery's ability to compete with other forms of gambling.

I wrote to the Minister of State, Department of National Heritage, my hon. Friend the Member for Harwich (Mr. Sproat), on 20 June last year and he replied on 22 July and said:

"The Government has no plans to introduce legislation to legalise betting on the outcome of the National Lottery."

The first reason that he gave was that

"The last Lottery to be held in this country was abandoned mainly because the focus had switched from people playing the official Lottery to betting on the outcome."

I was interested to learn that. Do you, Mr. Deputy Speaker, remember the last national lottery in this country? It took place in 1826 and it is on that event that the Department of National Heritage chooses to base its first argument.

Being an assiduous man, my constituent did a little research of his own. He said:

"What the Heritage Department does not state is how the last lottery was conducted. According to 'An Economic and Social History of Gambling in Britain and the USA' in running the Lottery, the Treasury sold a given number of tickets to brokers who then bid above par for blocks. The brokers thus, in effect, underwrote the Lottery. In turn, brokers sold shares in the tickets at prices which exceeded the face value by a substantial margin and provided them with income and profit. Thus it was the Government itself that created the environment for a secondary market. In fact, I would suggest the main reason the Lottery was stopped was because the 'poor' started playing via the brokers."

I put that argument to the Department of National Heritage to see whether it could confirm it, and my hon. Friend wrote back on 30 August, saying:

"I am aware that there are significant differences between the current National Lottery and the last state lottery held in this country in 1826, particularly with regard to the cost of tickets. I am also aware that opinions vary about the exact causes of the abolition of lotteries in the nineteenth century."

We are now approaching the end of the 20th century and we have a very different creature in the national lottery today. A good deal of thought was given, quite rightly, to how it should be established and it has been established in such a way that it has proved an enormous success. We therefore need bother no further with the history of this matter.

The second reason that my hon. Friend gave—this is the real point—was that

"The purpose of the National Lottery is to raise as much money as possible for the arts, sports, the heritage, charities and projects to mark the year 2000 and the beginning of the third millennium. If money were to be diverted away from buying Lottery tickets to betting on the outcome, the amount raised for these good causes would decline and the Lottery would fail to achieve its central purpose"

That is at the heart of the argument. My hon. Friend the Member for Beckenham (Mr. Merchant) made exactly that point. He is naturally concerned that the national lottery would be damaged if such a change were made. However, we are talking about two different markets. The hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) described the people who queue up on Saturday afternoons to buy lottery tickets not as gamblers but as "taxpayers". That was a rather good description. We know that they are not gamblers but the national lottery appeals to them. It would be nice to think that, as my hon. Friend the Member for Harrow, East (Mr. Dykes) suggested, they were all buying tickets in order to contribute to charity. It would be nice to think that that was their primary motive. I am sure that they welcome the fact that a large proportion of the proceeds goes to charity, but what really attracts them is the absurd idea that, at huge odds, there is the possibility of winning such a vast sum of money that, when people do have the misfortune to win, very few of them have any idea what to do with it.

People go in on a Saturday afternoon and the queues build up towards 7 o'clock, which I believe is the deadline. Then they all rush home and watch the result on the telly. Of course the majority of them lose. Anyone who knows anything about gambling does not go anywhere near the national lottery because the odds are so diabolical, but it is wonderful, inoffensive entertainment and I make no criticism of it because it has been a huge success.

May I correct my hon. Friend on one point? Once the pot gets beyond a certain size, the odds start becoming very attractive. Syndicates will buy a vast number of tickets on the basis that the odds suddenly become attractive once the pot becomes over £16 million or £17 million in a roll-over week.

I have investigated that matter. I think that it is necessary to buy about 5 million tickets to cover every possibility and one would have to have a big syndicate of people all rushing around the shops to buy them up, but, when there is a rollover, there is a possibility that a person could corner the market. However, he would have to hope that he was the only person who won and that he had the whole lot, so it is a risky business.

I recognise, however, the validity of what my hon. Friend says. The difficulty is that, when a person bets, he has no idea how many other people will be betting. At least the bookies give him some odds and he knows that those are the odds at which he places his bet. I personally feel that, if people want to bet, that is better. I rarely bet, but I enjoy going to the races, which are rather dull if I do not have a bet.

My hon. Friend has spent most of his speech referring to people who bet on the national lottery as "they". I hope that he will continue his speech with the term "we". As he is an occasional lottery better like myself, we should collectively embrace these people rather than referring to "them over there" and the constituents of the hon. Member for Liverpool, Broadgreen (Mrs. Kennedy).

Of course I have bought lottery tickets from time to time. I even bought one of those scratchcards, but I was so upset when I did not win that I have not bought one since. I have found the same with the weekly lottery. I gave much thought to what the numbers might be and bought one ticket. When not one of them came up, I was so deeply upset about the gross waste of money that I did not do it again for a few weeks.

I must admit that I have participated in the national lottery—of course I have. It is an entirely harmless activity. The people who participate in it are part of a different market from, I would not use the term professional gamblers, but people who take an interest in the science of gambling and who like to think that they are applying a little expertise when they place a bet, like hon. Members, some of whom no doubt will place bets on certain aspects of the general election outcome.

For example, it is a pity that the hon. Member for Newbury (Mr. Rendel) is not here now because there is an interesting bet available on the number of Liberal Democrat Members there will be in the next House. There is an interesting misconception about that. The bookies think that the Liberal Democrats will start from their present number, which I believe is 26, but of course—

Order. I am not sure that that comes directly under the amendment. I am waiting for elucidation on it.

One large group of people bets on the national lottery and another group takes betting a little more seriously and is better informed. Not many people bet on election outcomes—bets are mostly on horse racing, dog racing and that sort of thing—but people can bet on other activities. For example, it is interesting that there is quite a lot of betting on golf now, but may I finish my point about the Liberal Democrats because this information might be of interest to you, Mr. Deputy Speaker? The bookies think that, because the Liberal Democrats have 26 Members now, that is the starting point, but we all know that they are going to lose all the seats that they won in by-elections, so the starting point is lower. Therefore, Mr. Deputy Speaker, you can get a good bet. I would strongly recommend that. Working out how many Liberal Democrat Members of Parliament mere are going to be is much easier than working out the number of Members there will be of almost any other party in the House.

I just wonder whether my hon. Friend is giving this good advice to Mr. Deputy Speaker, having insulted him earlier by suggesting that he was at least 150 years old.

I certainly would never suggest that. I am deeply distressed that my hon. Friend should have placed that interpretation on my words because I think that I am right in saying that no one in the House can remember the events of 1826 and probably not many can remember the events of 1926, but may I revert to the point that I was making about the two different markets that are involved because it is important? There would be quite a lot of betting on the outcome of the lottery and bookmakers, being inventive, creative people, would create quite a lot of interesting bets that people cannot get at the moment.

As you know, Mr. Deputy Speaker, at present, people win £5 if they get three numbers, they win a slightly larger sum if they get four and they can win a significant sum if they get five or more. When we think of what the possibilities are when six numbers come up, obviously, there is an interesting market there, but all I am saying is that we have reached the point where the national lottery has been such a huge success that it should have the confidence in its own ability to compete successfully in the market. As a Conservative, I am not entirely comfortable with what is essentially a state-protected monopoly. I hope therefore that my right hon. Friend the Minister of State will accept the amendment tabled by my hon. Friend the Member for Ryedale (Mr. Greenway).

I am most grateful to have caught your eye, Mr. Deputy Speaker, following the remarks by my hon. Friend the Member for—

Beaconsfield.

I knew it was another constituency beginning with "B", a few of which have come up this morning.

I make no apology for pointing out, particularly to my hon. Friends, that we Conservatives have not created another natural business in the national lottery. We are not dealing with a privatised utility whose monopoly status can gradually be eroded such as that of British Gas or British Telecom, which are natural places for business. We are dealing with the national lottery, which is simply an emanation of the state.

I know that all our instincts suggest that, once something is thriving, it should be opened up to competition and the industry would continue to develop, but, by setting up a national lottery, we have done something of which probably Adam Smith and most certainly my noble Friend Lady Thatcher would be ashamed. We have created something that can be the product only of a monopoly.

If it were fully open to competition, the national lottery would cease to be a national lottery. It would lose its profile and effectiveness and the whole thing would degenerate into a scrum among perhaps a large number of much smaller operations, some of which would not be set up on the present basis of the national lottery, so they would not give anything to good causes.

We have to accept that we Conservatives have done rather an unfree market thing in setting up the national lottery. I do not apologise for that because I am not an economic liberal or a laissez-faire nightwatchman state-type Conservative. I am a Tory and the powers of the state are to be used for the benefit of the people, so I do not feel particularly precious about that. My great friends from the Adam Smith Institute will perhaps write to me to correct what may be a misinterpretation of Adam Smith's view on this.

Does my hon. Friend accept that the activities of the national lottery are for the benefit of people, in that huge sums of money generated each week are applied in large measure to good causes? Does he further accept that although the national lottery is a state-run monopoly, it is in competition with other forms of betting such as horse racing and the football pools?

I agree with my hon. Friend, and I particularly agree with his comment about good causes. Huge sums of money have gone to good causes in my constituency, such as the Mercury theatre in Colchester and the local night shelter, as well as to charities, the arts and sports. My constituency has done rather well out of the national lottery, and I must confess that I am embarrassed by how well it has done compared with other constituencies. I hope that that will continue.

That success would not have been possible but for the fact that the national lottery is a monopoly, as it can only thrive as a monopoly. We ought not to be talking about deregulating its market—or opening it up to what my hon. Friend the Member for Beaconsfield (Mr. Smith) called "competition"—because, as my hon. Friend the Member for Shoreham (Mr. Stephen) commented, there is already a lot of competition. We ought to be talking about enhancing and protecting its monopoly position, because that is how the national lottery will best continue to do the job that we have set it—namely, to raise money for good causes and to pay a bit of tax, as the hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) pointed out.

My instinct is to be against the amendment. I regret that my hon. Friend the Member for Harrow, East (Mr. Dykes) is not in his place at the moment because I wanted to say to him that if this were a French legislative chamber, we would be leaving the French judges in a great muddle. The judges would look at the travail preparatoire and would wonder why we were debating this amendment at all, as its real purpose is simply belt and braces. Its purpose is to clarify for the avoidance of doubt—as the legal expression goes—that the Bill in no way alters or amends the effects of the National Lottery etc. Act 1993, which prohibits anyone or any organisation, be it private or state, from organising bets on the national lottery. We should leave the Bill as it is, as removing that part of the subsection may raise questions about the 1993 Act.

I hope that you will forgive me, Mr. Deputy Speaker, for making a comment which is relevant to the amendment and to the Bill as a whole. I doubt whether we should regard as "liberalisation" the opening up of competition with a totally nationalised form of betting. We should not give the Tote too much freedom, as it is a nationalised industry competing with the private sector. We must put the Tote into the private sector to compete on a level playing field with other organisations before we start to open up these liberalising arguments.

Would not the disadvantage of such an arrangement—which, on the face of it, is attractive—be that horse racing would suffer considerably?

That is like saying that we should not have had a private sector operator for the national lottery because a private sector operator would be out to make profits for itself instead of raising money for good causes. However, we all know that Camelot was the best bet because it promised to raise the most money for good causes. I do not see why we could not create a semi-protected position for a privatised Tote with arrangements to divert money into the racing industry. That does not alter the fact that removing this part of the clause holds out the prospect that there will be moves to liberalise the national lottery, which would be detrimental to the lottery. I hope that my right hon. and learned Friend the Minister of State will make clear that the Government do not support the amendment.

I wish to add one more point. If it is planned at some time in the future to liberalise the national lottery to allow people to bet on it, it would be necessary also to amend this Bill. The only advantage of removing this part of the clause—if liberalisation of the national lottery were to take place—is that the Bill would have to be amended. I would like some clarification from my right hon. Friend on that point.

I congratulate my hon. Friend the Member for Ryedale (Mr. Greenway) on piloting this useful Bill through the House. I support the amendment, and I agree entirely with my hon. Friend the Member for Harrow, West (Mr. Hughes) about the effect of the lottery upon the horse race betting industry. I was also interested to hear that the hon. Member for Newbury (Mr. Rendel) has placed a bet on the outcome of the election in his constituency. He did not tell the House whether he was betting that he would win his seat or lose it. I suspect probably the latter.

As a Conservative, my starting point must be freedom of choice for people to spend their hard-earned money as they wish. If they wish to have a little flutter, they should be allowed to do so on the Tote, the lottery or at the racecourse. I would be against the amendment if I thought that the activities of the Tote were not in the national interest, but those activities are very much in the national interest. The Tote puts a huge amount of money into racing, as indeed the football pools have put money into the sport of football and the Foundation for Sport and the Arts has generated huge amounts for good causes—money that has benefited my constituents.

Racing used to be very much in the national interest because, for centuries, we needed horses for war. We needed horses with stamina, strength and speed to perform in the arduous conditions of the battlefield. I was a member of one of the last British regiments to be equipped with horses, so I have studied this matter in some detail. I am glad to say that we do not need horses for that purpose any more. The Household Cavalry does, however, make a tremendous contribution to tourism in this country, and adds glitter, colour and pageantry to our national life without which we would all be the poorer.

Horses are now bred for sport, and horse racing gives enormous pleasure to many hundreds of thousands—perhaps millions—of people. Riding for the disabled is also an enormous source of pleasure, not only for disabled people but for those who help them. It engenders a love of animals, and those who care for horses are among the best animal lovers in the country. A constituent told me not long ago that her husband spent too much money on sick animals. "The only problem," she said, "was that he did not know they were sick until they came past the winning post at the end of the field."

The Tote competes with bookmakers and the national lottery. Bookmakers are perhaps the most colourful element at our racecourses, which would not be the same without them and their oddly named assistants, the tic-tac men, whose skill beggars belief. Bookmakers had a reputation in the past for being crooked, and it had been known for bookmakers to abscond before the end of a race. However, bookmaking is now an honest and properly run industry which benefits the public and the racing world.

I wish that the money raised by bookmakers, the Tote and the national lottery could pay for all the public expenditure that the House must authorise. I would much prefer it if income tax could be abolished and that everything could be paid for out of voluntary contributions, rather than having money extracted from our constituents by the Inland Revenue; I fear, however, that that is a long time in the future.

Our people have a long history of betting on just about anything, and there is no reason why they should not continue to do so, unless the bet is contrary to public policy. I could not contemplate that, for example, someone might bet on a person being murdered, and then go to the bookmaker to collect a large sum of money after having committed that murder. That would clearly be contrary to public policy. In the past, people bet on the outcome of cockfights. I would not approve of that, because that too would be contrary to public policy.

Some people bet on the result of elections. Such betting is not contrary to public policy, although it is not usually very profitable. Not long ago, however, I heard that, in a local election, a candidate—he was a sandwich-board man by profession—who had very little chance of winning put on his sandwich board a message to the electorate that they might do themselves a bit of good if they went along to the bookmakers and put a large sum of money on him to win the election. Many electors did just that, and he was elected.

That is a very important point. My constituent, Screaming Lord Sutch, has bet on himself and on the number of votes that he might receive in the many by-elections he has stood in, and, in most cases, that is how he has paid his election expenses. It is a very good tradition.

I am grateful for my hon. Friend's intervention.

I do not think that betting on the national lottery result can in any sense be said to be contrary to public policy. Having listened very carefully to the speeches earlier in this debate, I still hold that view and I therefore support the amendment.

We have had an interesting and knowledgable debate. I do not know the sources of my colleagues' information on betting, the national lottery and the Tote, but they are clearly better informed on those matters than I was until I received my briefings on the subject.

The amendment tabled by my hon. Friend the Member for Ryedale (Mr. Greenway) attempts to reverse an amendment made in another place. The words that he wants to remove are a necessary part of the Bill, and we cannot support the Bill without them. They establish that the new freedom of the Tote to take bets on non-sporting events does not extend to the national lottery. As drafted, the Bill ensures that the Tote is placed in the same position as other bookmakers in relation to the national lottery, and that is clearly right.

Under the law, bookmakers are prohibited from taking such bets. Parliament banned side betting during passage of the National Lottery etc. Act 1993 because it was thought that betting on the lottery might reduce the flow of funds to good causes. It was considered that side bets on the national lottery could damage the lottery itself, with players switching from buying lottery tickets to taking bets on its outcome, thus reducing the amount of money going to the national lottery, and hence to good causes. The ban is enforced by the provision, which has been placed in the Betting, Gaming and Lotteries Act 1963, that bookmakers stand to lose their bookmaker's permit, without which they could not trade, if they took bets on the national lottery. The Government continue to support that ban.

11.15 am

With all due respect, my hon. Friend the Member for Ryedale is slightly misinformed on the effect that his amendment would have if passed. The amendment made in another place ensures that the Tote may not take bets on the national lottery. As I have said, that puts it on the same footing as other bookmakers prohibited from taking bets under the 1993 Act. However, the section of the 1993 Act that stops the Tote's betting subsidiaries, Tote bookmakers and Tote Direct, taking side bets on the national lottery would not stop the Tote board itself doing so. Therefore, the amendment made in the other place simply closes a legal loophole.

If the amendment tabled by my hon. Friend the Member for Ryedale were passed—although I cannot accept it—it would recreate a legal loophole, in which Tote bookmakers and Tote Direct could not take bets on the lottery, whereas the Tote board could. We know that the Tote board would not exploit such a loophole, as Lord Wyatt, chairman of the Tote board, has given us that assurance. However, I think that it is preferable, as we are considering an Act, to close that loophole, to make statute law clear and not to have to rely on Lord Wyatt's assurance, although of course we entirely believe him.

My right hon. Friend will not be surprised to hear that I have heard that argument before. The Tote board would need premises from which to take such bets and, as the Tote bookmakers would be the only source of such premises, they would therefore be debarred. I heard what my hon. Friend said, but there is also another side to the argument.

My hon. Friend is right. However—although we are considering hypothetical situations—if, for example, the Tote board decided that it wished to exploit the loophole, I am sure that it would be possible to devise certain franchising arrangements in which the Tote board would technically and legally be taking the bets, but in which it was renting out the buildings, facilities and machines belonging to Tote bookmakers. That could be done, and I suspect that it would be totally legal to do so. So there could be ways around the problem. However, I do not suggest that anyone will try to find ways round it. I am absolutely certain that the board does not wish to do that. It has given an assurance, and it is an honourable organisation. Nevertheless—as we are considering a Bill, and for the avoidance of any doubt—we think that it makes sense to plug that loophole.

I am of course aware that bookmakers have mounted a vigorous campaign to remove the general restriction not only on the Tote's but on bookies' ability to bet on the national lottery. They have tried to demonstrate that the concern of the Department for National Heritage is not justified. I must report, however, that the Government are not currently persuaded that that risk to good causes is one which they should take.

My hon. Friend the Member for Colchester, North (Mr. Jenkin) commented that the Government—perhaps not today, but soon—might be persuaded to change their mind. After listening to the very powerful arguments made by my hon. Friend the Member for Beaconsfield (Mr. Smith), I cannot help but feel that that day may be sooner rather than later. Fortunately, I am served by excellent staff in the Home Office, and whatever arguments I have been given to mount today against those of my hon. Friends, none of them relies on the 1826 national lottery as a main defence of allowing the grave new sin of betting on the national lottery.

The Department of National Heritage is responsible for the national lottery, and it has not been persuaded by the figures provided by bookmakers on the experience in Ireland. If the sales of national lottery tickets were reduced by no more than 8 per cent., the amount the lottery raises for good causes could be reduced by at least £120 million a year.

Bookmakers have called for a degree of equity in the market place, maintaining that the lottery amounts to unfair competition. However, there is a clear distinction between an enterprise such as the lottery, which is run under licence by Camelot for public benefit, and licensed betting shops which operate for private gain. They both pay taxes, but the betting shops make pure private gain, whereas the bulk of money raised by Camelot goes to pay taxes and to support the five generic good causes.

Comments have been made about the midweek national lottery draw affecting business. The director general, as the regulator of the lottery, agreed to the introduction of the midweek draw to maintain the level of lottery turnover and to allow Camelot to achieve its projected contribution to good causes. As the midweek draw started only on Wednesday of this week, it is too early to come to any conclusion on its effects.

It is dangerous to speculate and I do not wish to hold out hope to either side in the dispute about whether people should be able to bet on the national lottery. I am not an expert on the subject, but, as an occasional buyer of lottery tickets, I do not expect the midweek draw to make nearly as much money as the Saturday draw. However, if it is a success and maintains funding, the balance of arguments will change slightly in favour of what the bookmakers have requested. In those circumstances, it would not be right for the lottery to have it all ways—to have Saturday betting and a midweek draw, keeping the funds high and not allowing betting on the outcome of the lottery. It is impossible to come to any conclusion yet. We must wait to see how the midweek draw works.

We have introduced several measures recently to assist the betting industry.

I suspect that my hon. Friend the Minister is about to talk about issues on which the betting industry and the Tote are grateful for the support given by the Home Office. Does he agree that, if the House decides not accept the amendment and leaves the Bill unamended, it would be sensible to ensure that any future legislative changes to the rules to allow betting on the outcome of the national lottery deal with this matter simultaneously, to avoid the Tote being disadvantaged?

My personal view is that I sincerely hope so. If the time comes when it is regarded as sensible to allow betting on the outcome of the national lottery, I shall argue strongly to my ministerial colleagues that the Tote should be in the same position as betting shops. I would not want it to be given a monopoly, but I would want it to be in the same position.

It seems to me that the Minister has made two contradictory statements. He has made it clear that he regards the matter as purely technical, without any real effect, because he accepts that the Tote board will not make use of the loophole that he thinks exists even if it is allowed to remain. He has also said that he will reverse the relevant part of the legislation if others are allowed to take bets on the lottery. However, I think that I also heard him say that if the amendment were passed today, the Government would not want the Bill to pass. Will he confirm that? If the matter is purely technical, he could let the Bill through even with the amendment.

I do not think that there is any contradiction in what I have said. I have pointed out that this is not simply a technical matter—it closes a loophole There is a loophole in the legislation. We have every confidence that the Tote board, as an honourable organisation, will stick to its undertaking, but it is right to pass legislation that we think is as perfect as possible. We know that there is a loophole, so it would be foolish to let the Bill through without plugging it.

The situation may change. I cannot speculate on when that may happen—it could be in 12 years or two years The Government may not change their mind on betting on the national lottery. A different Tote board may lose patience with the Government's view and exploit the loophole. It would be foolish to get into that position.

The issue is not merely a technical matter of no importance. It is important that legislation should carry out the Government's intention. It is the Government's intention that there should be no betting on the outcome of the national lottery by high street bookmakers, Tote Direct, Tote bookmakers or the Tote board. I have set out the general arguments why the Department of National Heritage does not want betting on the outcome of the national lottery for the moment. I shall conclude in a minute by outlining the steps that the Home Office has taken.

It is right to give credit to the Under-Secretary of State for the Home Department, my hon. Friend the Member for Leeds. North-East (Mr. Kirkhope). He, perhaps more than any previous Home Office Minister, has immersed himself in all aspects of the betting and gaming industry and brought forward proposals for sensible deregulation. He has tackled the issue with courage and vigour. His initiative has resulted in a number of measures to make betting shops more attractive to customers. The blacked-out windows are due to be removed, if that has not already happened. All-cash amusement with prizes machines were introduced last June.

The indications are that those measures have been profitable for the betting industry. The Government have not been dog in the manger, saying, "You cannot bet on the national lottery, but we are not going to let you improve your attractiveness to customers in other ways." We have tried to deregulate the gambling and betting industry where sensible to make life easier for it and better for the people who use the shops, giving them better chances.

In addition, my right hon. and learned Friend the Chancellor of the Exchequer has done his bit to help, reducing general betting duty from 7.75 per cent. to 6.75 per cent. in March last year. The industry will also have greater freedom to advertise if the order currently under scrutiny receives parliamentary approval. All that amounts to a significant package of measures to help the industry.

Those measures are making a difference. We are pleased to note—we have heard it mentioned this morning—that there is sufficient confidence in the industry for Ladbroke to have made a major acquisition recently, installing Tote Direct terminals in its shops. The expansion of terminals will give racing and bookmakers the impetus to develop a super-bet to challenge the supremacy of the lottery.

The Tote Direct scheme has been successfully extended. The company is owned by the Tote and Coral. Its terminals in betting shops feed bets straight into Tote pools. Lord Wyatt was understandably jubilant when announcing the coup at a press conference on Tuesday this week.

That change could have major implications for the financing and marketing of racing. The number of Tote Direct terminals in Britain's betting shops is set to leap from 2,400 to more than 4,300, making possible the search for a super-bet to rival the national lottery.

I am interested that my right hon. Friend has twice talked about challenging and rivalling the national lottery. I think that he agrees with me that it is reasonable that there should be fair competition and he does not agree with my hon. Friend the Member for Colchester, North (Mr. Jenkin), who says that the national lottery is a paternalistic institution that needs to be protected for all time.

My hon. Friend the Member for Beaconsfield made a telling and powerful speech. He is now tempting me to agree with some of his eloquent phrases. Many have professed their conservatism this morning and then made arguments that might get them drummed out of the brownies and certain other clubs around Westminster. Some of my hon. Friends will have to make amends for the views that they have expressed about state-run monopolies as paternalistic organisations.

I accept that Britain's strength and greatness is based in many ways on some of our great institutions, for which we want no competition from any quarter—the monarchy, Parliament, this House and the other great institutions that make Britain a place worth living in. I am not certain whether the national lottery has yet moved into that league of institutions that make Britain the place that it is. I do not regard the national lottery as entirely paternalistic. It is successful and it does the job that Parliament set it up to do. The House set it up in its current form and if it wishes it can amend it or the competition to it.

It is important that the Tote Direct system that has been set up will allow through terminals the opportunity for super-bets. That will greatly increase the pool of money, and that in itself could make it a worthwhile rival to the lottery. It is hoped that the money going into the Tote through Tote Direct will rise to £100 million and be added to the race course pool of £74 million a year. Tote jackpots will be greatly boosted by that move.

11.30 am

The Government cannot accept the amendment, but I hope that in my extensive reply to the debate I have shown the House that the Government's mind is not completely closed to the possibility that one day, when matters have settled and we have considered the midweek lottery figures and other issues for a little longer, it may be possible to allow betting on the outcome of the national lottery. However, for the moment that would be premature. The Government have not adopted a dog-in-the-manger attitude to the betting industry. We are doing all that we can to allow it to compete successfully without the additional carrot of the national lottery.

This has been a worthwhile two-hour debate and in many respects it has shown the House at its best. That is easily said, but hon. Members have been open minded and those who have spoken are interested in racing and in the national lottery. The House has given the issue, which as the Minister said will return in future, a thoroughly good airing.

The Minister's comments were encouraging and we understand why the Government are not able to support the feature of the Bill to which my amendment relates. Perhaps we in the racing world and in bookmaking should not wait and see but should continue to negotiate in the hope that in future the Government will decide in our favour.

Despite my disappointment at having to withdraw my amendment on Report, I am pleased that this is a landmark Bill for the Horserace Totalisator Board. This is undoubtedly a day of great rejoicing because in a few minutes the House may give the Bill its Third Reading and we can look forward to Royal Assent.

It is impossible to overestimate the value of the Tote to racing. We heard much about that on Report. It has a turnover of about £300 million on which it makes a profit of about £11 million, all of which goes to racing. That is equal to about one fifth of the amount from the horse race betting levy on the much bigger betting turnover of several million pounds placed with high street bookmakers.

Many people in racing have argued that the Tote should have a monopoly on betting. That is not an issue for today, but if it does not have a monopoly it should have the ability to compete on equal terms with high street bookmakers and, increasingly, to work with those bookmakers in marketing the super bet. That must be the right approach. Increasingly, people want to place bets on non-sporting events. The Tote is currently restricted, but the Bill liberalises its activities and gives it the freedom that Conservative Governments should be about. Our philosophy is to give people freedom, choice and opportunity and the Bill does precisely that. It is a worthwhile deregulation measure and I greatly welcome Government and Opposition support in addressing the issue.

It is important to allow betting not just on all events, including non-sporting events, and for Tote bookmakers to be on an equal footing but to reverse the loss of trade that is suffered by other betting shops and which the current disadvantage has brought about. It is crucial to put that right and the Bill does that.

As I have said, it is difficult to overestimate the value of the Tote to racing. It does a formidable job and its support is cherished by all those in racing. I shall give the House a brief idea of the value of that support.

How will the Bill work because I understand that at the moment bets on the Tote create a pool from which prize money is paid, leaving a balance. Therefore, it is impossible for the Tote to lose money. Will that be possible under the new arrangements? Will all bets be similarly pooled?

I understand that they will all be pooled. That is what makes the odds so interesting and gives the punter the certainty of a sporting chance. That is the nature of pool betting and it is that which is makes it so valuable.

In racing, pool betting often throws up quite different odds from those offered by a bookmaker. I know that you, Mr. Deputy Speaker, are looking forward to a visit to a racecourse. One can bet on the Tote and get quite different odds from those offered by bookmakers. Contrary to what the big three bookmakers often say, the Tote is not always one way. I was once asked by a punter for a tip. Apart from the obvious one of, "Do not bet what you cannot afford", my tip was to examine the race course odds, leave the bet as late as possible and inspect the place odds on the Tote.

The Tote can often offer extremely good value, as the hon. Member for Newbury (Mr. Rendel) discovered when we visited Newbury race course on an all-party racing committee day out. I shall explain why the Tote gives good value to racing. I said earlier that we have probably lost £1.5 million to £1.75 million in profit over the past 10 to 11 months because this measure has not been on the statute book. On Second Reading in another place the chairman of the Tote, Lord Wyatt of Weeford, to whom I pay tribute for his stewardship of the Tote and whose chairmanship will come to an end in a few weeks, said that the sponsorship value would have been 50 races with prize money of £30,000 or 30 races with prize money of £50,000. That goes to the heart of what my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) asked me on Report.

My hon. Friend the Member for Harrow, East (Mr. Dykes) spoke on Report about the Cheltenham Gold cup. It is one of the most prestigious steeplechases of the year and it is sponsored by the Tote. It is Tote sponsorship that makes Cheltenham festival what it is. At York, the Ebor Trophy race is held on the three days of what are known as the York Ebor meeting. That is held in late August and it is arguably the best flat racing festival in the world. Without the sponsorship of the Tote, it would be a less successful event. As a result of this measure, we can look forward to the Tote being able to improve and increase its sponsorship throughout the world of racing.

I should like, with your indulgence, Mr. Deputy Speaker, to refer to Jodami, a horse from Ryedale, which won the Cheltenham Gold cup three or four seasons ago and which, sadly, sustained an injury when it narrowly failed to win the Gold cup in Ireland on Sunday. It has now had to retire. We are all very sad about that in north Yorkshire—not only have we now lost Jodami to racing but I lose Peter Beaumont's yard in Brandsby to another constituency after the election. However, there are plenty more racing stables in need of substantial financial support in what will remain of Ryedale.

We cannot underestimate the value of the Tote to racing. However, its input cannot be sustained without continual improvement of the Tote's arrangements. What is the future for racing? Interestingly, only this week the British Horse Racing Board published a new discussion paper entitled "Racing Industry Review: Options for Change" in which it outlines the future of the racing industry. The review highlights the importance of the Tote and the levy in the racing industry's financial arrangements.

The review makes the point—it is important to put this on record—that the Government have a clear financial interest in the success of racing as they take some £400 million a year in general betting duty out of the tax paid on bets in betting shops. Only £56 million comes back in the levy, and we shall have to redress that balance at some point.

To maintain the turnover in racing, whether in the Tote bookmakers that we are debating or in the high-street bookmakers, racing must be competitive The quality of racing is in the competitiveness in the sense that racing does not always have to involve horses of groups 1 or 2 calibre, or steeplechasers with ratings in excess of 130; it means having horses of equal form and ability, and some of the most exciting racing takes place with horses in the lower groupings which may have ratings of under 100. That competitiveness stimulates and encourages people to bet on racing. The only way in which the racing industry will remain competitive at all levels is if we ensure that the sport is properly financed. The contribution to racing from the Tote and bookmaking generally is crucial in this regard.

What is the future for the Tote, bookmakers generally and betting on all kinds of events, not only horse and greyhound races? I believe that new technology and deregulation will have to go hand in hand. The announcement this week that Ladbroke is joining in the Tote's direct operation is all about making the best use of new technology to have access to the multi-bets and the multi-pool bet to which my right hon. Friend the Minister referred.

Parliament must continue to have an open mind. It must also take a keen interest in ensuring that the regulatory framework is right, not just to ensure that the Tote and bookmakers have the opportunities they need to run their business but so that all betting is properly conducted and that the punters are treated fairly. My hon. Friend the Member for Beaconsfield raised an important matter when he spoke of the value of pool betting, its security and efficacy.

Will my hon. Friend explain how the pool works? How can the concept of a pool be consistent with the idea that one can walk into a bookmakers and place a bet at fixed odds? I do not quite understand how that works.

We are getting into very technical matters and, in spite of comments about my expertise, I am not entirely sure that I can give my hon. Friend an answer or that it would be entirely germane to the Bill. As the Minister would no doubt say, I shall arrange for ford Wyatt to write to my hon. Friend and explain it to him. The point is that people wish to make all kinds of bets at fixed and variable odds and that they can securely be accommodated within all the betting systems.

Finally, I hope that no one listening to the debate will think that we are simply in the business of stimulating gambling without any concern for the possible effects on individuals. We are in the business of ensuring fairness for Tote bookmakers and ensuring that the racing industry has a flourishing future. That is certainly my motivation in asking the House to grant the Bill a Third Reading.

Equally, we are in the business of ensuring that the disgraceful abuse that took place in 1826 and to which my hon. Friend the Member for Beaconsfield referred never recurs. That is why the interest of my right hon. Friend the Minister and the Home Department in the levy board and the Tote is vital and so greatly appreciated. I am utterly confident that there is no reason why such abuse should recur, but Parliament must continue to take a close interest in betting matters. The Bill will do much to redress the disadvantage under which the Tote has laboured for too long and will, I hope, put matters right within a few days.

I join my hon. Friend the Member for Ryedale (Mr. Greenway) in paying tribute to Lord Wyatt of Weeford, the chairman of the Tote, who is due to retire on 30 April. He has been an absolutely splendid chairman. When I was the parliamentary private secretary to the Home Secretary of the day, I had the good fortune to be invited to a splendid occasion called the annual Tote lunch, which takes place at a very nice hotel in Kensington. Lord Wyatt always made a most amusing speech on such occasions, although it was largely at the expense of the other guests. It is quite right that the Tote should celebrate its achievements because it has been enormously successful.

The annual Tote lunch is not an event with which I am familiar. Does my hon. Friend happen to know when the next one might be?

On 5 March.

I was not aware of the date because, unfortunately, I have not been invited this year—perhaps if certain people read Hansard, they might be able to remedy that omission. It is a splendid occasion and it is right that the Tote should celebrate its success.

In betting, we might like to start from a different starting point, but the fact is that bookmakers exist and do an excellent job. The Tote is an important part of the overall picture of betting in racing, for the reasons outlined by my hon. Friend the Member for Ryedale, and it makes a unique contribution to racing. I was greatly encouraged by the remarks of my right hon. Friend the Minister about Tote Direct, which is good news because it will expand the business of the Tote considerably and will allow the Tote to provide more prize money for races and more sponsorship for racing. That must be welcome.

The Tote operates not only at horse races, but at dog races. I am not very experienced in betting—I asked my hon. Friend whether fixed-rate betting was consistent with a pool because I do not fully understand those matters.

The Tote betting at greyhound tracks is different to the Horserace Totalisator Board Tote. Most greyhound tracks run their own pool for betting on greyhounds on their track on the day of the races.

I am grateful for that clarification—

Order. This Bill is entirely about the Horserace Totalisator Board and Third Reading speeches should be confined to what is in the Bill.

I think you are right, Mr. Deputy Speaker. The Bill is about horse racing, but I wonder whether it is not too late to extend it to dog racing. What I am about to say would be applicable and relevant to horse racing.

I mentioned earlier the rather attractive bet that one could obtain on the number of Liberal Democrat Members in the next Parliament—we all know that there will be substantial reduction. Dog racing is interesting because there is a fixed number of dogs in a race—normally six—and the Tote operates like all Totes in that it gives the running odds, which are determined by the amount of money that is going on each dog. It is the same in horse racing.

Order. This Bill is about horses, not dogs.

I am very disappointed at your ruling, Mr. Deputy Speaker, because it means that I shall be unable to give you some very helpful advice about how you should bet the next time you attend dog racing.

To ensure that there is no misunderstanding, let me say that I am going to Newbury races tomorrow and they are for horses only.

I am delighted to hear that. Newbury race course is one of the most attractive race courses in the country—I am sure that the hon. Member for Newbury (Mr. Rendel) agrees that it is an excellent course. I hope you have a fantastic day out, Mr. Deputy Speaker; I hope that you place all your bets with the Tote; and I hope that you have great success and come in on Monday morning with a big smile on your face. The Tote is convenient at race courses; it will be near the directors' box in which you have lunch, so you will not have to go very far to place your bet; and it provides an excellent service, with all sorts of combinations of bets.

I am grateful to my hon. Friend the Member for Ryedale for bringing forward the Bill because, since the advent of betting on the Irish lottery in betting shops, the Tote has been placed at a serious disadvantage. I understand that it would have been possible for my right hon. Friend the Minister of State to have dealt with the matter through regulation rather more speedily than has been possible through primary legislation. Nevertheless, the Bill is welcome because it places the Tote on an par—to use the hackneyed phrase, on a level playing field—with betting shops. I am pleased that it has all-party support.

I formally congratulate my hon. Friend the Member for Ryedale (Mr. Greenway) on introducing this excellent and important Bill.

I have to make a confession: I am not one of the world's greatest punters. As my hon. Friend the Member for Harrow, East (Mr. Dykes) recalled, we have had some pleasurable excursions out to Ascot in great family gatherings, although they were perhaps done more for social reasons than for the purpose of betting. Nevertheless, the piquancy of going to Ascot was making my little visit to the Tote, with my £1 coin—or, if I were being daring, my £2—and asking, "Could I place a bet—oh, how do I place a bet?" and they would say, "Well, you can have it each way or for a place," and I would say, "Any way will do, provided I get something back." At the end of a day's racing at Ascot—or at Fakenham, which is enjoyable but rather more on par with a donkey derby—my great joy is to find that I have put £5 out and got £6 back. My fury was aroused when I assisted my son, who was then only 12, with his betting—although he could not place bets, I was able to abide by his wishes. That little wretch would come back with a fortune—he had an instinct for betting which I was unable to match.

Let me return to the Bill. A natural characteristic of the British is in favour of fair play and we would not be having fair play had the Bill not come into being. It is absolutely iniquitous that, all these years, the Tote—which is an utterly respectable statutory body, headed by the biggest grandees in the land—has been unable, for some extraordinary reason, to operate on a level playing field with the other bookmakers. That was unworthy treatment. It is common sense that the Tote should be allowed to operate in a host of betting ventures other than dogs and horses—incidentally, I am not at all interested in dogs.

I would be interested in placing a bet with the Tote, which is easier than going to some of the other bookmakers, on the general election result. It would be reassuring to know that I could go to the Tote and bet on my own success in Sutton and Cheam—not only on the certainty of winning, but on the size of the margin by which I would win. When the Bill is passed, I shall be able to do that.

The Tote's success will be good news not only for the racing industry, but for the causes that the racing industry supports. I congratulate my hon. Friend and wish his Bill well.

I start by adding my congratulations to those who brought the measure forward. My noble Friend Lord Kimball, who introduced the Bill in another place, is well known in the House for his interest in these matters and for the enormous amount that he has done over the years as a Member—first, of the House of Commons and now of the House of Lords—in advancing the interests of the horse racing industry and other country pursuits.

There is some danger in adding the name of Lord Wyatt of Weeford, because any congratulations to him will now look like an application for an invitation to the Tote lunch in March. However, if that were the way that the Tote wanted to read my congratulations to Lord Wyatt, I should not be displeased. He has played a tremendous role in the Tote's success. It has been able to do formidable things for racing, and he deserves unreserved congratulations on that.

My hon. Friend the Member for Bury St. Edmunds (Mr. Spring), the Member in charge of the Bill, did well in bringing the Bill forward and getting it through all its stages in this Parliament. I confidently predict that it will receive a Third Reading. It can then soon become law.

I have been staggered at the expertise that my hon. Friend the Member for Ryedale (Mr. Greenway) has shown in carrying the Bill through its remaining stages today. He obviously has great expertise, and the many people who work in that industry in his constituency and throughout the country can feel well pleased with the way in which they were represented by him today.

We should pay tribute to the work of the all-party racing and bloodstock industries committee, whose members considered this measure and expressed to my right hon. and learned Friend the Home Secretary and my right hon. Friend the Minister their support for the Bill. Evidently, the committee had great influence in persuading the Government that it was time that they supported the Bill to ensure its passage. My hon. Friend the Member for Ryedale is chairman of that committee, so he played a leading part from the start in ensuring the Bill's introduction.

On Third Reading, we may not voice our regrets about what is not in the Bill, and naturally I would not do so. It would have been helpful if the amendment tabled by my hon. Friend the Member for Ryedale had been passed, but we may rest assured that it is safe to allow the Bill as it stands to proceed, largely because of the remarks of my right hon. Friend the Minister on Report. His views were clear from what he said within the limits of selective responsibility, but he stretched those at one or two points, which was very helpful to my hon. Friend the Member for Beaconsfield (Mr. Smith), myself and others who have argued that the Bill should go further in the direction of accommodating betting on the outcome of the national lottery. That was a satisfactory outcome, and I am sure that the Bill, when it becomes law, will soon be followed by a Bill that will enable the Tote and the betting shops to do the things that we talked about on Report.

Many supporters of racing agree with the Tote when it says that it must compete with bookmakers on an equal basis. We have heard that the Tote cannot take fixed-odds bets on non-sporting events. That appears curious, but it dates back to the Horserace and Totalisator and Betting Levy Boards Act 1972. That may not be as long ago as the 1826 lottery, but it is a long time ago. What was done in 1972 was obviously appropriate for the conditions in 1972, but things have moved on and now, in 1997, the Tote should, as far as possible, be in the same position as the bookmakers. If Ladbroke's disagrees with me, I shall know about it pretty soon, but I doubt that the bookmakers would argue with that.

Interestingly, until 1996, the Tote never applied much pressure to be allowed to take bets on non-sporting events, and the fact that it feels able to take them on is a sign of the success that Lord Wyatt has had with the Tote.

The Bill is welcome. It will do a great deal to enhance the Tote. We have heard today that more is possible provided that those of us who want freedom to bet on the outcome of the national lottery continue our campaign. We have also heard that the Bill does not apply to dogs, and that there will be no dog racing at Newbury. We have heard about all sorts of things on Report and on Third Reading. The measure is most worth while and I look forward to it passing quickly on to the statute book once it has received its Third Reading and Royal Assent.

It gives me great pleasure to follow others who have spoken and to congratulate my hon. Friend the Member for Ryedale (Mr. Greenway) on his excellent Third Reading presentation. I hope that he will not mind my saying that I am glad that his amendment was not agreed and that the Bill reached its Third Reading without amendment: the original text is much stronger. I think that even my hon. Friend would be fair enough to see the force of that argument despite his great skill in advancing arguments in favour of the amendment.

The Bill is important. I hope that the fact that two hon. Members who represent the borough of Harrow are speaking in the debate will not give the impression that there is an excessive interest in horse racing or betting in that borough—it is just a coincidence. The historic link is that Ladbroke's headquarters was originally in my constituency of Harrow, East, albeit in an unattractive, modern, concrete building. It has now moved to the constituency of my hon. Friend the Member for Harrow, West (Mr. Hughes) and is in a much nicer building. I regret the move, but I understand the technological, operational and managerial reasons for it. I wish the company well and remain friends with it, but at a slightly greater distance. I even tried to have a bet on which building it would occupy in Harrow, West, but it was not possible to place a bet with an appropriate local bookmaker, certainly not on the Tote.

I am sure that my hon. Friend is aware of a second connection, which plays an instructive role in ensuring that racing is maintained as an important industry in this country. Until the second world war, there was an important race track at Northolt park on the borders of my constituency and Ealing—part of the site is in my constituency. We do not want more race tracks to be abandoned; we want racing in this country to thrive.

That moving, almost emotional, intervention from my hon. Friend gives me the opportunity to agree with him. It also gives me the chance to refer—without pomposity—to the fact that I am chairman of the Anglo-French parliamentary liaison group. The industry in France is much bigger than ours and more money is invested in it for breeding and training. I welcome any move to expand an industry that is congenial, attractive to millions of citizens and an important provider of jobs.

I have a predilection for trotting, and I regret that there are no trotting race courses in this country—I believe that that is true, at least in England. That is a great omission: trotting holds a certain monotonous fascination; it is popular in the United States and France, but not in the United Kingdom.

There may not be an official trotting race course, but my hon. Friend is welcome to come to my constituency—to Appleby and Westmorland—each spring for the Appleby trotting and harness races. I might even invite him to make a speech on his views on matters pertaining to Britain, Europe and the world.

I am extremely moved by that kind suggestion from my right hon. Friend the Minister of State. It would be an even more agreeable combined double if the process of amity and connection could be completed by the extension to both of us of an invitation to the next Tote board lunch.

I congratulate my hon. Friend the Member for Ryedale. Bookmakers have a dubious reputation in some people's eyes, but not mine. The bookmakers I know are decent members of the community.

I do not want to sound too nauseating, but I shall use the appropriate epithets and say that today's debate has been characterised by the contributions of jovial John. If the informal, colloquial uncle of jovial John, my hon. Friend the Member for Ealing, North (Mr. Greenway), had remained here, he would presumably have been hearty Harry. Diligent David, the Minister of State, gave an effective reply on behalf of the Government.

On a personal note, I thank my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) for her kind references to our occasional visits to the races. Somewhat nervously, in case we should give the wrong impression, I hasten to add that those visits are rare. Those visits, with our crowd of mutual friends, have been all too few and far between owing to the pressures of parliamentary life, and they have not happened for some considerable time.

My hon. Friend need not be discouraged by the mistakes that amateur punters and occasional visitors to race courses make when they try to place bets. On a recent official visit to Hong Kong I attended the wonderful Happy Valley race course, where attendance rates and betting money from the local Chinese population are so stupendous that each meeting—particularly the Wednesday evening meeting, which is particularly well attended—adds several percentage points to Hong Kong's gross domestic product. It contributes through the tax levied to some worthwhile local public and social causes. That reminds me of an occasion when I attended Happy Valley with a skilled business friend from the Hong Kong community. He was an enthusiastic and expert punter. We tried to emulate the locals. We stood alongside the queue of Chinese punters going to place bets and listened carefully to the words—in Cantonese, of course, not Mandarin—that they used to place the bets. We were astonished to find that each one said an identical phrase in Cantonese.

We, rather pompously and self-importantly, decided to take the risk of going up to the window and saying the same thing to place the appropriate bet. The amount of money given seemed to be equal each time, which was rather fascinating. When we went up and said what we thought were the same words in Cantonese, the glass window was slammed down as if we had said the wrong thing. We clearly got the Chinese tones wrong. Anyone can make mistakes when they make bets as an amateur.

I conclude by referring to the notable work done by Lord Wyatt, who will soon finish his job as chairman of the Horserace Totalisator Board. I wish him well. I share the general enthusiasm for the work that he has done with his colleagues, the way in which the board has been developed and the way in which it will be helped by the Bill. That does not mean that I would go so far as to share his eccentric and bizarre views on domestic politics or the future of Europe. My enthusiasm in congratulating him on his work is tempered by a fear that, as he will have less to do with the board and racing in general, he might spend more mischievous time on running down Europe and expressing his archaic 1850 views on its future.

My hon. Friend ought not to be too harsh on Lord Wyatt. I understand that he has accurately predicted the results of the past two general elections and has placed substantial bets, with great success, on the basis of his predictions. Of course, he could not do so on the Tote until now. It remains to be seen whether he will take that opportunity after the Bill is passed.

That intervention emphasises my point that Lord Wyatt is a great expert on betting. I hope that his correct prognosis will be repeated, but some of his views on the future of Europe and, indeed, on the danger of mixing with foreigners too frequently are well known.

Lord Wyatt, and all of us who have spoken in the debate today have paid tribute to Lord Kimball, the promoter of the Bill in the other place. In the debate in the Lords he summed up the crux of the Bill, saying that the Bill

"will allow the Tote to take bets on non-sporting events. The Tote's betting offices have been hit by the introduction since March of this year by all the bookmakers in their shops of betting on the Irish Lottery numbers. This now amounts to as much as 2.5 per cent. of all their off-course turnover. The fact that the Tote has not been allowed to take these bets has meant that since March of this year it is estimated that the Tote has been deprived of over £1 million and that, in a full year, it would be deprived of in excess of £1.5 million."—

as my hon. Friend the Member for Ryedale said.

"This is money that has been lost to racing. After all, all the profits of the Tote go to racing."

Then, with even more emphasis, if that is possible, he said:

"The Tote has some 200 betting offices out of approximately 9,000 off-course betting shops in this country. The problem is that, if a punter goes into a betting shop and cannot get the bet that he wants—and in this case it is the popular amusement of betting on the numbers that are coming out in the Irish draw—he goes into another betting shop where he can get the bet that he wants."—[Official Report, House of Lords, 6 November 1996; Vol.575. c. 710.]

That is the rationale behind the Bill.

I am glad that the Bill has proceeded so felicitously through all its stages in both Houses. I assume that the House will be minded today to grant it a Third Reading That would give me much pleasure, as I am sure it would my hon. Friend the Member for Ryedale, with all his skills and knowledge of the industry, and all the other hon. Members who have taken part in the debate today.

My upbringing discouraged at an early age any interest that I may have had in horse racing or the gambling associated with it. However, to follow the comments of the hon. Member for Shoreham (Mr. Stephen), I regard the horses bred for racing as incomparably beautiful animals, and I recognise that we would not have the one without the other.

I am here to present the Opposition's view on the Bill We recognise the Bill's worth and the fact that it clearly assists the Tote in the increasingly tough competition that it faces by relaxing restrictions on the range of events on which it can receive bets. The Tote, with the rest of the gambling industry, has suffered since the introduction of the national lottery.

We discussed earlier the fact that the lottery and scratchcards have increased the number of people involved in gambling. One of the most important consequences is that gambling is less often portrayed as an immoral minority activity, but strictly applied regulation is still necessary. The businesses involved in the gambling industry, including the Tote, accept that it is in their best interests for their integrity to be protected by proper regulation.

Reputable business practice and appropriate regulation have contributed to an irreversible change in the landscape of gambling in the United Kingdom. Betting on horses and dogs, bingo, football pools and in casinos has become an integral part of the entertainment industry. I was pleased to visit the Mecca bingo club in Knotty Ash in my constituency—there is a real place called Knotty Ash, and I invite hon. Members to come and visit it. There is an extremely successful bingo club in Knotty Ash, which claims 35,000 members who regularly take part in the events organised there.

One of the consequences of the national lottery is that it has forced the industry to recognise the competition and to invest in improving facilities to attract people into bingo clubs. That is one example that has been given; the Minister referred to improvements in high street betting shops.

For the most part, those who make use of such forms of entertainment are exercising their own choice and do not gamble stakes beyond their means. It is therefore not our intention to seek to limit that choice. Our aim is to ensure that the firms involved operate legally and with propriety, and that any social implications are recognised and taken into account separately.

The hon. Lady referred to the bingo industry. She may be interested to know that one of the most attractive bingo clubs is in the middle of my constituency. It is run by the well-known chain, Gala Clubs. It is a superb facility, where many people come regularly, and not only at weekends. Modest sums of money change hands, but it is a huge sector that provides great enjoyment to a large number of people. Understandably, however, the bingo industry sometimes feels like the poor relation because it does not receive the attention that politicians should give it. Does the hon. Lady agree, and are there ways in which we could better promote the excellent bingo industry?

I am grateful for the hon. Gentleman's intervention, but I shall not go too far down that route, as it strays somewhat from the purposes of the Bill. Various points were put to me by the managers of the bingo club. In the debate on the Bill in Committee, there was some comment about the need for a wider examination of the regulations that affect gambling in the United Kingdom, rather than the current piecemeal approach. Perhaps we could return to that on another occasion.

We support the Bill as drafted, and congratulate the hon. Member for Ryedale (Mr. Greenway) on the progress that he has made so far with an excellent piece of legislation.

I am grateful to my hon. Friend the Member for Ryedale (Mr. Greenway) for introducing the Bill and for his excellent advocacy of it. I am also grateful to all my hon. Friends who have spoken in support of it, and I am very grateful to the hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) for her contributions today. I believe that she also served on the Standing Committee.

The hon. Lady is an excellent advocate at the Dispatch Box; she has made a fluent contribution to the debate and done so with such decency. I am glad that the Opposition and the Government are in agreement. If the time comes that I must disagree with her over the Dispatch Box, I shall feel a right swine and a cad, because she presents her arguments with extreme decency. If the hon. Lady is an example of new Labour, I am glad that there are plenty of old Labour Members behind her whom we can treat as bogeymen.

I am pleased to place on record the Government's support for the Bill. It removes an unnecessary restriction on the Tote, and places it on the same footing as other bookmakers. It will help the Tote to compete on an equal basis with other bookies in the fixed odds market. In this day and age, it is clearly unnecessary to prevent the Tote from taking bets on non-sporting events—in fact, I was surprised to learn that the Tote was restricted in that way.

What could be the reason for limiting the Tote's powers in that way? I understand that it dates back to the Horserace and Totalisator and Betting Levy Boards Act 1972—not quite 1826 legislation. That Act allowed the Tote to enter the fixed odds market for the first time. When the Tote was first set up in 1928, there were no off-course betting shops and the Tote provided pool betting on race courses. When the major step was taken to legalise off-course betting shops in 1961, the Tote faced formidable competition. It was not until 1972 that it was given the powers it needed to take fixed odds bets.

It was intended that the Tote should, as far as possible, be in the same position as a bookmaker. Therefore, it was given unfettered powers to take fixed odds bets on sporting events. However, as we have heard this morning, the Tote's powers to offer such bets on non-sporting events were restricted. At that time, it was thought undesirable for a statutory body to take bets on matters such as a general election and the royal family. The Home Secretary's approval was therefore required in the case of non-sporting events. Today, most people expect the Tote to decide what bets it should offer and take.

My hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) is absolutely correct: fairness is one of the key features of the British character. Fairness regarding the treatment of the Tote and other bookmakers was examined by the Home Affairs Committee in its 1991 report. It noted that the Home Secretary could, by order, approve non-sporting events on which the Tote could take bets, but that no order had been made. Primary legislation was needed to extend the Tote's powers so that bets could be accepted on any event, otherwise individual events had to be specified.

As hon. Members may imagine, drawing up such orders could be difficult. In its evidence, the Home Office commented that it did not contemplate making an order to allow bets on matters such as snow on Christmas day or martians landing. The Tote argued that it was anachronistic that it was unable to take bets on non-sporting events, that such bets gave publicity opportunities to other bookmakers, and that, if a punter wanted to place bets on a horse and an election result, he would patronise another bookmaker for both bets rather than place the bet for the horse with the Tote and then go next door to place the other bet.

The associations representing punters favoured allowing Tote bookmakers to take bets on non-sporting events. The bookmakers—then and now—agree with the proposition, so long as there is no bias in the legislation in favour of the Tote. The Home Affairs Committee commented that there was no logical reason why Tote bookmakers should be hamstrung in that way. Although bets on non-sporting events then accounted for less than 1 per cent. of turnover, they were profitable for bookmakers, and it was said that customers expected to be able to find a full range of bookmaking services in a bookmaker's shop. My right hon. Friend the Member for Fareham (Sir P. Lloyd), then the Minister responsible for the Tote, expressed the view that there was good argument for amending the legislation.

Why has it taken so long for a Bill to come before the House? In 1972, the restriction was not seen as irksome. The demand for bets on events other than sporting events was minimal, and the Tote did not press hard for the extension in its powers until last year. Circumstances have changed because of the new area of business that the bookmakers have ingeniously created: betting on the Irish lottery numbers, or what is called Lucky Choice, and more recently the new numbers game in betting shops called 49s.

I, too, pay tribute to Lord Wyatt for his excellent chairmanship of the Horserace Totalisator Board over the years, and to board members. He has been an excellent source of advice for the Government. Like my hon. Friend the Member for Harrow, East (Mr. Dykes), I hope that, in the free time that Lord Wyatt will have available from April, he will feel free to write on whatever subject takes his fancy.

I wish to thank all those who have advised me on the Bill, including my civil servants. I pay tribute to the Under-Secretary of State for the Home Department, my hon. Friend the Member for Leeds, North-East (Mr. Kirkhope), who has been in the forefront in trying to make changes in betting legislation.

It is only fair to say that some of the best unofficial briefing that I have received has been over the past few days in the back of the ministerial car. If we are looking for a successor chairman of the Tote, I can do no better than recommend Allen Loveridge, my Government car driver. I suspect that that applies also to other members of his syndicate. He was able to explain to me how 49s worked. None of us this morning wanted to get into technical explanations of how odds are run. I suggest that, if the Home Affairs Committee ever wants advice on those matters, it should look no further than the Government car pool drivers, who seem to be a unique source of expertise on all matters relating to betting. I now know what 49s are—and they are worth having a go on, actually.

The bookmakers saw that, in Ireland, betting on Irish lottery numbers was extremely popular. Bookmakers here are prevented by law from betting on the United Kingdom lottery. Lucky Choice—betting on the Irish lottery—turned out to be a success and the bookies found it to be a lucrative slice of their business. They can make more from that type of bet than from the traditional horse race bet because they do not have to pay levy on it. Money goes to the levy board for the support of racing only from horse race bets.

Last year, the Tote was hit very hard in its betting shops. If its customers wanted to play Lucky Choice, they could not do so in a Tote betting shop. They had to go elsewhere. The Tote was losing potential income and it was losing customers, possibly not to return.

I shall make it clear why the Government attach great importance to income to the Tote, which is a unique body. It is run as a commercial operation, but its profits are applied for the benefit of horse racing, not private gain. Any income lost to the Tote is income lost to horse racing and horse breeding, one of Britain's most important industries.

The House may be interested to know about the Tote's contributions to racing. I have been reading the Tote's annual report for 1996. To the year ending 31 March 1996, turnover was over £304 million, an increase of almost 12 per cent. on the previous year. It paid out £238 million to winning customers and paid betting duty of over £13 million. Its gross profit was £45 million. Net profit before contributions to racing was £10 million. Its total contribution to racing was £8.3 million, an increase of 12.5 per cent.

How did racing benefit from these moneys? It appears that £1.58 million was paid in levy to the levy board while £0.86 million was directed to the sponsorship of races. Payments of slightly more than £5 million went direct to race courses, while £0.66 million went to the Greyhound Racing Trust. The capital contribution was a further £0.76 million.

The Tote has a particularly important role in sponsorship. The Tote's contract to support the Tote Cheltenham gold cup until the turn of the century is extremely important. In 1986, its contribution to prize money was £118,000. The Tote's bookmaking division is Tote Bookmakers, which has about 200 shops throughout the country.

The Tote has taken full advantage of the deregulatory measures the Government have introduced. In April 1995, restrictions on betting office facilities were relaxed to allow clear windows, larger television screens, notices on windows with information about facilities and odds on offer, and a wider range of refreshments.

I particularly welcome the change to shop windows and the removal of blacked-out glass, as it suggested that betting shops were immoral or seedy and it made them seem the equivalent of sex shops. That was an anachronism, and I am glad that we have been able to change it.

The changes have given the Tote the impetus to develop new corporate branding in a number of key outlets, both on and off the course. It has also taken full advantage of further deregulation last June, which permitted the installation of two amusement-with-prizes machines in betting shops.

Bookmaking is, however, a competitive business. As Lord Wyatt said in another place when the Bill was introduced:

"the Tote is a successful, fully commercial enterprise, operating in competition against the biggest bookmaking chains in the country in a cut-throat arena. The margins in bookmaking are small, although it does not seem that way to those of us who have lost money on bets and I believe that the bookie almost always wins. I assure the House that, according to the figures, the margins in bookmaking are small. Bookmakers have also had to compete against the national lottery."

Earlier, I mentioned bookmakers' ability to take bets on the Irish lottery numbers. Lord Wyatt pleaded eloquently for the Tote to be allowed to join in. He said that the Tote was "bleeding" at the rate of nearly £40,000 a week and that

"That money could have gone to racing, as all our profits do."—[Official Report, House of Lords, 6 November 1996; Vol. 575. c. 711–12.]

My right hon. and learned Friend the Home Secretary and my hon. Friend the Minister responsible for these matters responded to the Tote's pleas in respect of bets on the Irish lottery. An order was passed to allow the Tote to take bets on foreign lotteries and it came into force on 20 December, just in time for the Christmas holiday season.

As I explained earlier, when the Home Secretary exercises his power under the 1972 Act to approve a non-sporting event, the event must be specified. The Tote can therefore now offer such bets. I have seen notices—other hon. Members may also have seen them—outside betting shops giving details of the odds on offer, which the Tote maintains are much better than those of the national lottery.

Naturally, no sooner had the Government taken action to enable the Tote to compete with the Lucky Choice bet than the other bookmakers produced a new non-sporting event on which to bet. Bookmakers have been creative in their response to the challenge of the national lottery, creating their own daily numbers draw—that thing called 49s. The Tote cannot offer that new bet because the order that we made last December was specific to Lucky Choice Clearly, in a fast-moving market with new developments at every turn, it is inappropriate that the Tote must come to the Home Secretary each time it wants to specify a new event.

In response to my hon. Friend the Member for Beaconsfield (Mr. Smith), we could have gained a few more months on this Bill by bringing forward an order permitting the Tote to participate in 49s. That would have done merely for that purpose, but in June we would have had to change something else, and in July we may have needed to make yet another change. This is a fast-moving market and, rather than having to bring an order through the Home Office to the House every time the bookmakers think of something different on which to bet, it is better to have this Bill.

It is not always easy to frame an order for a particular event, so this Bill is the solution to removing all delay in the future and avoiding technical difficulties. I warmly support it and am grateful for the warm support that my hon. Friend the Member for Ryedale has had from both sides of the House. I believe and trust that the House will support it. We should leave it to the Tote to decide, on its judgment and taste, on what events bets can be offered.

I beg to move amendment No. 6, in page 1, line 10, leave out 'a year' and insert '18 months'.

This simple and straightforward amendment seeks to substitute for the period of 12 months the period of 18 months in relation to the time for which the police have to keep property before they can move to acquire it as property in their own name. This is partially a probing amendment to ascertain why the figure of 12 months is in the Bill, but I shall also advance arguments as to why the period should preferably be longer.

By way of explanation, this sub-paragraph is part of a number of conditions that the Bill would impose on the police before they are able to exercise a new right of acquiring ownership of property that has fallen into their possession. Such property may have been forfeited or may otherwise have come into police hands. As we all know, the police acquire a vast amount of property as part of their daily work. Of course they cannot for ever act as custodians of that and decisions must be made on disposing of it in one way or another.

Under the Police (Property) Act 1897, the police have the power to auction this property. That was clarified by regulations passed in 1975. The police do not have the power at present to keep the property even if it would clearly be of great benefit to them. The Bill aims to ensure that they have that power.

How long do the police have to keep property under the 1897 legislation before they can auction it?

I was going to come to that point, but I will answer it directly as my hon. Friend asks about it now. Under the 1897 Act—in fact, I believe that it is under the 1975 regulations—the police have to keep property for 12 months before they are able to auction it, although it is six months for property forfeited, so there is a different time scale. However, if they seek to acquire it for themselves rather than to auction it, there is a reason why the period should be different, which I will move on to later.

First, the period of 12 months strikes me as arbitrary, even under the 1897 Act and certainly in the Bill. One needs to take into account various factors that might make a forceful argument for making the period longer. The real owner—the original owner, if you like—of the goods that have passed into police hands needs to be afforded some time to assert his rightful claim. We must take into account factors such as possible illness, possible period abroad, and moving out of the region where the property was originally taken by the police for one reason or another, whether it was lost or part of the proceeds of a crime.

The person who originally owned the property might have moved out of the region and it might have taken time for him to discover where the property was and how to reassert his rights to claim that property, so there are reasons why a period needs to be allowed. In a modern world where people travel much more and where sometimes information from the region where the person used to live takes considerable time to reach him, we might talk in terms of a longer period than that in the Bill.

The second and final argument was touched on, perhaps without his realising it, by my hon. Friend the Member for Beaconsfield (Mr. Smith). There is a distinction between the police auctioning goods which have come into their hands and acquiring them, and this is recognised by the fact that the power does not exist at present. Even if the Bill were passed, the power would be used sparingly.

The difference is simple. The police must be seen to be absolutely above criticism when it comes to handling other people's property. Therefore, the regulations need to be tight. It is one thing when goods are being auctioned; when property is to be acquired by the police, it is a different question. It must be clear to all concerned that the police are not in any way misusing their powers to obtain property which could be useful to them. I am sure that the police would never dream of doing mat, but we must make sure by regulation that no one thinks that. For that reason, an extra precaution needs to be put on the police in this Bill, and a period of 18 months will do that.

Perhaps it would be helpful if I speak now to indicate the view of the Government in case my hon. Friend the Member for Erith and Crayford (Mr. Evennett) is tempted to accede to the amendment. I am afraid that I hope to persuade him otherwise.

The effect of this amendment would be to require property to remain in the possession of the police for 18 months before it could be retained on the decision of the police authority for use by the police. Section 2(3) of the Police (Property) Act 1897 provides that property which has come into the possession of the police in connection with their investigation of a suspected offence may be disposed of after it has remained in the possession of the police for a year. This is to allow time for a person claiming to be the owner of the property to apply to the court for an order for the delivery of the property, as provided for under section I of the Police (Property) Act 1897.

If property can be disposed of after 12 months, I see no reason why a decision to retain an item should not be taken after it has remained in the possession of the police for 12 months. The property could be sold after 12 months and completely disappear from view. It would not be possible to trace it. So it does not make sense to allow a longer period of time for a claim to be made in respect of property which is to be retained in the ownership of the police authority for use by the police force.

After a suitable period of time to allow the owner to make a claim, it is right that a decision should be made about the future ownership of the property. If no period were set, the property would have to be kept by the police indefinitely, and this would lead to considerable expense in terms of storage and maintenance. This is a matter of judgment, and I have listened carefully to my hon. Friend the Member for Beckenham (Mr. Merchant), but I believe that 12 months is the right period of time. It is neither too long nor too short. If property had to be retained by the police for 18 months before it could be retained or otherwise disposed of, it would place an additional burden on the police with no real benefit to anyone.

How much unclaimed property do the police have in their possession? How much room does it take up? What burden is it placing on the police at the moment? To what extent would that burden be increased if we were to accept the amendment?

I cannot give my hon. Friend an exact inventory of the amount of property that the police have around the country, but it can be considerable. Tracing owners of lost property and getting better property marking systems on to computer are priorities for police forces around the country. I consider it a tragedy—as do the police—that after excellent raids such as Bumblebee, the police can fill warehouses with stolen silver and property which is almost impossible to return because it is not properly marked with a post code. There are warehouses full of JCBs, crawlers and other plant which are impossible to return because plant has no unique vehicle identification numbering system. A Home Office Committee, which I started a year ago, has met plant operators and others to try to draw up security schemes for plant similar to those used by the motor industry Vauxhall led the way in this area, with better and safer locks. If we are not to have more warehouses full of unreturned property, it is absolutely vital that all those in the plant and machinery industries take their responsibilities seriously, as car manufacturers have done.

The short answer to the question by my hon. Friend the Member for Beaconsfield (Mr. Smith) is that, if police must retain current amounts of property for 18 instead of 12 months, there will, of course, be a 50 per cent. increase on space requirements. I have better uses for police stations than to fill them with property—which I should like to be returned to owners or disposed of as soon as possible.

Amendment No. 6 proposes an 18-month period, which is inconsistent with the 12-month period specified in section 2(3) of the 1897 Act. I have explained to my hon. Friends why I think that the period should be 12 months and why the Bill is correct. Therefore, I urge my hon. Friend the Member for Erith and Crayford, the Bill's promoter, not to accept the amendment, and I urge the Committee to reject it.

I am grateful for an opportunity to say a few words on the amendment tabled by my hon. Friend the Member for Beckenham (Mr. Merchant)—who is a neighbour, and a very good neighbour, to my constituency in south-east London—for giving us some ammunition and an opportunity to rethink the issue. He and I normally agree on politics, on government and on many other matters but I must disappoint him on this occasion and say that I cannot accept his argument or his amendment.

My right hon. Friend the Minister—who I am delighted to have with us today—has made a very powerful case. In London, under the Metropolitan police, there have been some very successful trawls—such as Bumblebee, which he highlighted—to recover property. It would not be in the interests of the police or of the public if the police had to keep that property for a further six months before they could dispose of it. Time is important to the police, and they have a very difficult and important job to do. Our duty is to help them, and I believe that all hon. Members believe that they should be supported.

I think that 12 months, as specified in the Bill, is a fair and reasonable time for people to come forward to claim their property, if they want to do so. It would be wrong to change that provision now, not only because of the practical difficulties caused to the police, but because it would be out of line with the 1897 Act, which originally set the 12-month period. Therefore, I cannot accept the amendment tabled by my hon. Friend the Member for Beckenham. It has given us an opportunity to highlight the reason why we wanted the 12-month period in the Bill, but I very much hope that he will withdraw it.

I have listened very carefully and with great interest to my right hon. Friend the Minister and to my hon. Friend the Member for Erith and Crayford (Mr. Evennett). Having had an opportunity—which the House has not previously had—to hear why a 12-month period was originally specified in the Bill, I appreciate why those arguments are convincing. I was particularly convinced by the arguments that the police should not be custodians of warehouses, and that their very success in cracking down on crime has resulted in the problem of having to look after such large quantities of property. I also appreciate the argument that property should be disposed of as soon as reasonably proper.

After hearing those arguments, I think that the 12-month period is acceptable. Therefore, on that basis, I beg to ask leave to withdraw the amendment.

I beg to move amendment No. 1, in page 5, line 17, leave out "77" and insert "77(1)".

With this, it will be convenient to discuss Government amendment No. 5.

The first part of amendment No. 5 is the most substantial element in this group, so I shall address that first. I hope to be commendably brief.

Amendment No. 5 makes it clear that any expenses incurred by a chief constable in carrying out any of his functions in relation to the class of property to which the new part VIIA of the Civic Government (Scotland) Act 1982 applies will be defrayed by the appropriate police authority. Section 77(2) of the 1982 Act relates to the expenses incurred by the chief constable in performing his functions under part VI of the Act in relation to lost or abandoned property. The section requires police authorities to defray such expenses.

The new section 86E(3) of the 1982 Act, as inserted by clause 6, would mean that expenses incurred by the chief constable in carrying out his functions in disposing of the relevant property are to be defrayed by the police authority. It is appropriate to provide that the chief constable's expenses in carrying out any of his new functions under part VILA should be defrayed by the police authority. There is no reason to restrict that to cases in which the police dispose of the property. The proposed new section 861, inserted by amendment No. 5, together with amendment No. 1, makes provision for all the chief constable's functions under the new part VILA.

Amendment No. 5 also defines the term "chief constable" in part VILA of the Act as the chief constable for the police area in which the property comes into police possession. The term also includes a constable acting under the chief constable's direction for those purposes. That is in line with the definition of the term in part VI of the Act, relating to lost or abandoned property.

With that simple explanation, I hope that the amendments will be accepted.

I am grateful to my right hon. Friend the Minister for explaining those technical amendments. They make the Bill better and more effective and I therefore have great pleasure in accepting them.

I beg to move amendment No. 2, in page 5, line 34, at end insert—

"(2A) Any person who, immediately before the date on which a determination under subsection (1) above is made, owns the property in question, shall be entitled within one year after that date to recover possession of it as owner.".

With this, it will be convenient to discuss Government amendments Nos. 3 and 4.

Section 71(2) and part VI of the Civic Government (Scotland) Act 1982 entitle the rightful owner of lost or abandoned property to recover possession of it within one year of the date on which it was disposed of, if it was disposed of by the police otherwise than for value. Amendment No. 2 gives a similar entitlement to the previous owners of property to which the new part VIIA of the 1982 Act applies, in circumstances in which the police have retained the property under the new powers. That means that owners will have at least two years in which to make a claim for their property.

Amendment No. 4 is the more substantial of the two other amendments in the group. Section 76 of the 1982 Act confers a right of appeal on a previous owner of lost or abandoned property against any decision made by the chief constable on entitlement to compensation under section 72.

Amendment No. 4 extends that right of appeal to a sheriff to previous owners of property disposed of by the chief constable under the new section 86E of the new part VII of the Act. Amendment No. 3 is a consequential drafting amendment to allow for the insertion of amendment No. 4.

I hope that the amendments are acceptable to my hon. Friend the Member for Erith and Crayford and to the Committee.

The Bill—I hope that it will soon be an Act—will apply not only to England and Wales, but to Scotland and Northern Ireland. I have pleasure in accepting the technical amendments to which my right hon. Friend the Minister has spoken.

I beg to move, That the Bill be now read the Third time.

I have been privileged to present the Bill and I thank the supporters and sponsors from all three main political parties for their help and support. I also thank the Minister for his contributions and for his support during the Bill's progress.

The measure is modest, but it has considerable support not only in the House but throughout the country and among police forces. That is important. Currently, the police are required by law to dispose of unclaimed or forfeited property in their possession by auction and that needs to be amended. Police time and effort to dispose of such property is wasteful when they do so much other important work. We do not want them to look after lost property and it is important to assist them in whatever way we can so that they can get on with their real job of apprehending and dealing with criminals. My police chief, Philip Selwood of Bexleyheath police station, which covers Bexley, does an excellent job and has my total support for his continuing work. We congratulate all police forces on their tremendous work.

The Bill would allow some equipment to be taken into police use if that is appropriate. Alternatively, at the end of 12 months, the police would be able to dispose of property that has been forfeited or is unclaimed. This modest measure will help them in their work and it will be appreciated by the police and others in our society. I commend it to the House.

I have been asked to respond to the measure on behalf of my right hon. and hon. Friends, and I shall be brief.

In his introduction to the Bill published in The House Magazine on 2 December last year, the hon. Member for Erith and Crayford (Mr. Evennett) referred to debates during the passage of the Bill that led to the Criminal Justice and Public Order Act 1994.

In Standing Committee B, in reply to an amendment that had been moved by my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael), the Minister of State, Home Office, the right hon. Member for Penrith and The Border (Mr. Maclean) described the amendment as objectionable.

"because it would remove the existing legal safeguards which protect the interests of innocent people whose property has been used for a criminal purpose without their knowledge or consent."

He also said.

"If a power for the police to make use of forfeited property were deemed desirable in principle, the necessary provision should be made by amendment to section 2(1) of the 1897 Act and regulations issued under it. That would ensure that the protection already afforded to the blameless owners of forfeited property under that Act was retained."[Official Report. Standing Committee B. 3 March 1994; c. 1172.]

I acknowledge on behalf of the Opposition that the Bill does exactly that.

The earlier debate focused on the proposal to allow the police greater powers to determine what to do with computer hardware and software seized during the course of a criminal investigation. It was suggested that the police, in pursuit of the criminals who supply hardcore pornography via the Internet, should be empowered to turn that equipment against the criminals. That idea had arisen following evidence presented to the Select Committee on Home Affairs by the Association of Chief Police Officers, the Metropolitan police and the Police Federation.

We therefore welcome the Bill, and I congratulate the hon. Member for Erith and Crayford on his success in winning a place in the ballot. We are satisfied that its provisions will ensure that the blameless owners of stolen property continue to be protected and, further, that the responsibility is placed squarely on the shoulders of chief police officers in Scotland to discover the owners of property wherever possible and to notify them of their right to reclaim it before action is taken to dispose of it.

As the hon. Gentleman acknowledged, it will be necessary to introduce new regulations governing the exercise of the powers conferred in the Bill and for the Home Office to issue guidance to chief officers of police. It has been a matter of education for me since I was elected to the House in 1992 to observe the increasingly numerous occasions on which changes to legislation are made by statutory instrument. Indignation has turned to interest as the general election draws closer. It may even be possible that it will be my hon. and right hon. Friends who introduce from the Dispatch Box the amendments that will be required as a result of the Bill.

I welcome the Bill and wish it a speedy passage on to the statute book.

I suggest that the hon. Lady does not risk her money on the Tote or anywhere else by betting on that latter point.

The Government warmly welcome the decision by my hon. Friend the Member for Erith and Crayford to introduce a Bill whose purpose is to prevent the police from having in every case to dispose at auction of particular items of unclaimed or forfeited property which are of such specific use that it would be more efficient to keep them for use in the police service rather than having to sell them at an inadequate price on the second-hand market.

As the House knows, it is a terribly technical and complicated Bill. I am grateful that my hon. Friend has not been deterred by its complexities and technicalities or by having to make equivalent changes in the appropriate Scottish legislation. He sees the Bill as worthwhile, and the House agrees with him. It is certainly the Government's view. I congratulate him once again on his success in getting the Bill to this stage. I wish it a speedy journey through another place and look forward to seeing it on the statute book.