Clause 15 — Abolition of levy
Horserace Betting and Olympic Lottery Bill
5:45 pm

Photo of Mr James Paice

Mr James Paice (South East Cambridgeshire, Conservative)

I beg to move amendment No. 3, in page 10, line 26, at end insert—

'(4) The Secretary of State shall not make an order under section 15(1)(d) providing for the Horserace Betting Levy Board to cease to exist unless the order also makes provision, or an earlier order under section 15(1) has made provision, for a "transfer scheme" under this section.'.

Photo of Sir Alan Haselhurst

Sir Alan Haselhurst (Deputy Speaker)

With this it will be convenient to discuss amendment No. 4, in page 11, line 7 [Clause 16], leave out 'have effect' and insert

'shall not have effect until—

(a) the Secretary of State has published a report of the outcome of the consideration by the Office of Fair Trading into the arrangements for the sale of data and media rights by the British Horseracing Board and

(b) the scheme has been approved by both Houses of Parliament.'.

Photo of Mr James Paice

Mr James Paice (South East Cambridgeshire, Conservative)

The amendments deal with the abolition of the Horserace Betting Levy Board. That has caused a considerable amount of debate in this House and in Committee, as well as in the racing industry. As I said on Second Reading, not everybody connected with horse racing is entirely happy with the Government's proposals to abolish the levy and the levy board—the bookmaking industry certainly is not, and has argued the case for retaining it. Conservative Members accept that the levy is somewhat anachronistic, as is the Government's involvement in determining it, given that the system is being moved closer to the marketplace. That is right, so we support the measure in principle.

We should bear in mind, however, that the racing industry is in a state of tremendous uncertainty and flux, particularly in relation to the investigation by the Office of Fair Trading, the rule 14 notice that the OFT served last April, and the continuing discussions between the OFT and the industry on whether the industry can adjust its modus operandi and structure to meet the OFT's concerns without the rule 14 notice having to be enforced. It is widely believed throughout the industry that if the OFT maintains that stance, it will lead to a significant reduction in racing's income from the commercial sale of data, which would have a knock-on effect on the number of race courses and the number of jobs in the racing industry. The OFT's stance is based on its odd contention that it is perfectly acceptable for bookmakers to operate en bloc in negotiating for data rights, but unacceptable for race courses to do likewise. I find that argument difficult to accept, and I believe that the Minister shares my doubts; nevertheless, that is the situation.

Further uncertainty is created by the consideration by the European Court of Justice of the case brought by the bookmakers. Given the way in which matters proceed in that court, it could be a long time before there is any outcome. Another factor is the renegotiation of the commercial arrangements between "Attheraces" and 49 race courses for the sale of media rights. I do not think that that is as much of a doomsday scenario as Tony Cunningham suggested, and it is of course an entirely commercial negotiation—it is not a matter for the Government to get involved with, nor should it be—but it clearly adds to the significant uncertainty.

It is essential that in passing the Bill, the House does not make matters worse by adding to the uncertainty. That is why, despite my support for the principle of ending the levy, I believe that we should have another bite at the cherry. Without wishing to repeat the confusion that arose in respect of the earlier group, I must point out that amendments Nos. 3 and 4 offer two alternative approaches, on the basis that there is then a greater chance that one of them might be acceptable to the Government. That is probably wishful thinking, but it is nevertheless an option.

Photo of Mr David Heath

Mr David Heath (Shadow Minister (Home Affairs), Home Affairs, Shadow Minister (Constitutional Affairs), Law Officers (Constitutional Affairs), Science, Non-Departmental & Cross-Departmental Responsibilities; Somerton and Frome, Liberal Democrat)

It is an each-way bet.

Photo of Mr James Paice

Mr James Paice (South East Cambridgeshire, Conservative)

If they come in first and second, I shall be delighted, but knowing my luck it is not very likely.

Amendment No. 3 proposes that when the Secretary of State places before the House the order for the abolition of the Horserace Betting Levy Board, as is required by clause 15(1), it should contain the details of the transfer scheme that is part and parcel of the disposal of the board and its property, assets, rights and liabilities.

Amendment No. 4, as a pick-your-own alternative, suggests that before any transfer scheme could take effect, the Secretary of State should publish a report on the outcome of the OFT's consideration of the arrangements for the sale of data and media rights by the British Horseracing Board, and that the transfer scheme should then be approved by both Houses of Parliament.

The purpose of both amendments is to give the House time to consider the issue. We hope that we shall soon know the outcome of the negotiations with the OFT—the most significant of the variables to which I referred.

The Minister properly reminded us that he has agreed to continue the levy for a further year beyond what was originally envisaged. Everybody in the racing industry welcomes that decision because it means that the levy board will not be wound up until autumn 2006, and that the levy will end at the end of March 2006. That means that the fixture list for 2005 can be developed in the coming months in the knowledge of the income for that year. Nevertheless, the uncertainty beyond that is significant and I therefore suggest that, as we all hope that the OFT deliberations will be concluded later this year—I hope speedily, but it may be some months yet—it would be wrong to give the Government carte blanche to dispose of the levy board, and for the Secretary of State to have complete authority over the transfer scheme for its assets and its property. That right should not be given at this stage because we do not know what may happen.

The Minister has clearly and repeatedly said that he intends to end the levy. I understand and accept his determination to do that, but before giving the final say-so, and before giving the Secretary of State total power to decide what happens to the assets through the transfer scheme, the House should be entitled to the opportunity to reflect on the outcome of the OFT investigation. If the rule 14 notice stands and the negotiating powers of the race courses break down as was suggested last April, racing could experience a significant diminution of income—much greater than was envisaged when the original idea to dispose of the levy was devised.

The levy raises a considerable sum of money, and if racing lost the income from it at the same time as facing a reduction in its anticipated income from the sale of data, it would be catastrophic for the industry. I therefore advocate that before the final decision to wind up the levy board is made—right as it may be in principle—hon. Members should have the opportunity to reflect on it and preferably consider a report. If we cannot consider a report, I hope that we can at least be fully cognisant of the outcome of the OFT investigation. It is right and proper for all of us who are concerned about the long-term financial welfare of racing to be pretty clear that it will have a continuing income stream. Once the levy goes, there should be a replacement stream from commercial activities. If the OFT decides that that income stream should be significantly less—or will inevitably become significantly less—than that from the levy, hon. Members should have the opportunity to reconsider the matter.

I have outlined the purpose of amendments Nos. 3 and 4, which are a pick-and-mix—two alternative arrangements—but I hope that the Minister will allow the House an opportunity to consider whether and how to wind up the levy board and transfer its assets once we know the resolution of some of the uncertainties that currently beset the industry. If the Government decide to plough on regardless of the outcome of the OFT decision, and that decision is to uphold last year's rule 14 notice, it is possible that racing, race goers and punters will suffer considerably. That would be not only regrettable but a sad indictment of the Government's attitude, given their generally well-meaning intentions. I hope that they will give hon. Members an opportunity to consider the matter further before making the final decision.

6:00 pm
Photo of Mr Don Foster

Mr Don Foster (Shadow Secretary of State for Culture, Media & Sport, Culture, Media & Sport; Bath, Liberal Democrat)

Hon. Members will know that until the 1960s there was an informal arrangement whereby money was transferred from bookmakers to racing. However, in the 1960s it was decided that the agreement should be more formalised, and the Horserace Betting Levy Board and the accompanying levy were established. The levy has been important to the sport and industry of racing.

Some £70 million a year is transferred from the levy to horse racing for uses that are more wide ranging than some might suspect. Some of the money is used to improve veterinary medicine and education. That is clearly welcome. Some is used to develop horse breeding and some for an additional purpose, which Mr. Page eloquently described in Committee, when he said:

"I stand on concrete steps under a corrugated iron roof, the rain drips down, it is windy and I think, 'I really am enjoying this.' This is where the levy board plays an important part. Over the years, it has been responsible for seeing many of our race courses upgraded because it wants to make racing more enjoyable."—[Official Report, Standing Committee D, 22 January 2004; c. 68.]

Expenditure on improving race courses throughout the country has been important and played its part in the significant increase in recent years in the number of people who go racing. There is a good reason for the levy, and a large benefit has accrued from it.

Nevertheless, as the hon. Member for South-East Cambridgeshire admitted on behalf of the Conservative party, and Liberal Democrat Members also acknowledge, the time has come for the Government to stand aside from interference in the relationship between the bookies and racing. We need to find an alternative. However, we need to be sure that whatever alternative is adopted, it will continue to ensure revenue streams of at least the current order of magnitude for racing, and the range of benefits that I described.

In Committee, and here today, hon. Members of all parties have expressed the concern that the OFT's interference through the rule 14 notice, and the further complication of a European Court case that is currently being considered, mean that there is no certainty about what the future may hold, and what could replace the levy and the money that it brings to racing. It is therefore eminently sensible to have some mechanism whereby we can determine the most appropriate way forward. Since we do not know what that will be, it is sensible to include a provision that ensures that there will be an opportunity to decide to end the levy board and the levy only when we know the alternative and are convinced that it will make sense in terms of the benefits that it brings to racing.

In Committee, several alternative formulations were presented. The Minister accepted none. He has generously been given not one but two possible options to consider. I hope that he will accept at least one—or possibly both, in keeping with the belt-and-braces approach of the hon. Member for South-East Cambridgeshire. We already have two victories to one; I hope that that number will increase before long.

Photo of Mr James Paice

Mr James Paice (South East Cambridgeshire, Conservative)

Is my hon. Friend not retiring soon?

Photo of Mr Richard Page

Mr Richard Page (South West Hertfordshire, Conservative)

Indeed, it is lucky that I am going.

I do not think there is any disagreement about the value of the levy board's work. Mr. Foster mentioned my brief contribution on Second Reading, thus adding to my already growing reputation as a gambler and habitué of the race course. Indeed, I am seldom in the House; it is lucky that I am here today—and no doubt it is because I am nearly always at the race course that you could not remember my name, Mr. Deputy Speaker. I shall be extremely fortunate if I am called by you again in the next year.

I am sympathetic to the Secretary of State's wish to get rid of his obligations and responsibilities in respect of the levy. I see no point in involving Government in commercial negotiations and arrangements such as this, and I think all Members would agree with me on that. The problem is that the existing system incorporates a security of supply. We may not like that—the industry may periodically engage in internecine warfare over the calculation of the levy—but at the end of the day there is that security. We surely all agree that the levy must remain. I do not think that any faction in racing disputes the value of that; the factions disagree merely on how much they must put in to that value.

My hon. Friend Mr. Paice hinted at a few of the existing problems, such as media rights and what the Office of Fair Trading may do. Such things could put that security of supply in doubt. We need a commercial arrangement that does not involve the Government, but we also need to retain the security. My hon. Friend—who has initiated a trend for mixing and matching amendments so that we can choose whatever we fancy—has identified an important point: until we know for certain what the security arrangements will be after the OFT's intervention and after privatisation, we need to keep our options open. I do not understand why the Minister wants to exclude so many possibilities at this stage. I hope that he will consider the amendments and—putting his hand either on his heart or on his wallet—will say, "Trust me; I'll come up with something as the Bill proceeds."

Photo of Mr Alex Salmond

Mr Alex Salmond (Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury); Banff and Buchan, Scottish National Party)

I shall not repeat all the arguments that have already been advanced, but I agree with them. I know from what the Minister said in Committee that he recognises the dilemma that confronts everyone—not least him. This is, however, a bad time at which to legislate. The parameters of market power in the industry are yet to be set. The industry has had considerable success lately: its attendance levels are the highest for many generations, many aspects of it are flourishing, and there is a competitive betting market. It would be extraordinary if, by dint of regulation, interference or not thinking carefully enough, we upset a balance of power that is healthy and necessary.

It is natural that various interests should try to secure a dominant position in the industry. We need only consider greyhound racing, with which one Member seemed to be remarkably familiar. We should bear in mind what happens when bookmaking interests are in a position to control the industry, to the detriment of others—not least the consumer, or punter. I fear that the fundamental lack of understanding of the balance of forces to which I have referred among people at the OFT might create a similar imbalance in horse racing. I accept that the Minister is in a difficult position, but, although he has expressed sympathy, he has not explained why the OFT seems unable to understand that such an imbalance would be created by allowing the buying of rights while disallowing the selling of rights. That is a strange conundrum.

6:15 pm
Photo of Mr Richard Page

Mr Richard Page (South West Hertfordshire, Conservative)

I accept all that the hon. Gentleman has said. Does he accept that the OFT has been given powers that are aimed strictly in one direction? They are intended to introduce competition, and the side effects are barely considered. Is it not time that the Government took powers to rein in future OFT activities?

Photo of Mr Alex Salmond

Mr Alex Salmond (Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury); Banff and Buchan, Scottish National Party)

I am pleased that the hon. Gentleman, along with Mr. Redwood, agrees that for the sake of a better marketplace—and, incidentally, for the sake of a sport that is part of that marketplace—it is sometimes necessary not to prevent restraint, but to take a common-sense view of the balance of powers within the market. Scotland has five race courses, all run independently in different ways as relatively small organisations. It would be extraordinary to think that those courses, individually, could be in a good negotiating position, able to face the might of not one large bookmaking company but—possibly—all the companies acting in concert. It would be an extraordinary act to leave individual race courses, in Scotland or elsewhere, at the mercy of such negotiation.

Photo of Mr Alan Meale

Mr Alan Meale (Mansfield, Labour)

Perhaps, having reflected on the speech that preceded his and on the statement that everyone in racing was entirely au fait and satisfied with what had happened to the levy board and its distribution, the hon. Gentleman would like to say a little about what happened in Scotland. The levy gave very little support to the industry there, with the result that many courses, such as Lanark, remain closed to this day.

Photo of Mr Alex Salmond

Mr Alex Salmond (Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury); Banff and Buchan, Scottish National Party)

I am too young to have had the privilege of going to Lanark race course, but I know that the hon. Gentleman has been there many times. We regret the lack of investment, and the unnecessary shake-out of some courses in the 1950s and 1960s. I must say, to be fair to the levy board, that a number of the current Scottish courses have been strongly supported. Until recently our grade 1 track, Ayr—now thankfully under new management, and hoping for support in the future—was not in a position to seek assistance.

I do not claim that the levy board is a perfect organisation. I am merely saying that this a difficult time at which to legislate. I know that the hon. Gentleman—whose interest in racing, particularly Scottish racing, is well known—appreciates that point.

Photo of Mr Alan Meale

Mr Alan Meale (Mansfield, Labour)

I raised the issue because of the suggestion that everyone was satisfied with the levy. I agree with the hon. Gentleman that Scottish racing has improved dramatically recently, but that has been largely due to good management. The improvement has happened not because of but despite the levy board, and the distribution that it should have had in the past.

Photo of Mr Alex Salmond

Mr Alex Salmond (Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury); Banff and Buchan, Scottish National Party)

Yes, although some investments have been supported substantially by the levy board. What is needed is innovative management at course level. There have been dramatic improvements on four Scottish courses so far, and we hope that that will apply to five courses now that Ayr is under new management. I do not want all that improvement, all that innovative management, to be jeopardised or sacrificed because of uncertainties in the marketplace.

The Minister must reassure us that he will guide the industry through those uncertainties. He has given such reassurances in other contexts. He must solve the conundrum of why the OFT seems fundamentally to misunderstand the balance of forces in the marketplace, and tell us how he can make the tension in the relationship creative rather than destructive. However we view the issue, we should not favour a final decision at this stage. I do not see how we can legislate sensibly against a changing backcloth. Unless the Minister can give the information that I require, I shall continue to feel sympathetic towards the amendments.

Photo of Mr Laurence Robertson

Mr Laurence Robertson (Tewkesbury, Conservative)

I want to make a brief contribution in support of the amendment moved by my hon. Friend Mr. Paice. I first took an interest in horseracing in 1981, and at that time I thought that it was one sport governed by one body, and absolutely rolling in money. I had that impression for some years until I was elected to this House in 1997, since when I have had the honour of representing the Tewkesbury constituency, which contains Cheltenham race course. In January 1998, I applied for and obtained an Adjournment debate on national hunt racing. It is not an exaggeration to say that that debate changed my life, because when it was discovered that I had obtained it, I was approached by people from absolutely every corner of the sport. It was unbelievable that so many people should be phoning me, writing to me, coming to see me and, which was very pleasurable, inviting me to their race courses. The reason had nothing to do with me; those people were desperate for someone to champion their cause. I was aware that other hon. Members who had been here for some years had done that, but the fact that someone else who wanted to champion the cause of racing had come to the House was, to those people, to be hugely welcomed.

I then began to look into the industry, and I discovered two things. First, it was very fragmented. Secondly, it was not rolling in money as I had thought. We hear about racing being the sport of kings, which indeed it is, but it is also the sport of many ordinary people, and long may it continue to be so. It is not rolling in money in the way in which some people not associated with the sport might imagine.

The reason for my long preamble, which will probably be longer than the rest of my speech, is that I want to make the point that now is a very uncertain time in horseracing. We have heard about the potential collapse of the "Attheraces" deal, which has made for much uncertainty. The possible changes that the Office of Fair Trading is promoting are also very worrying. That was the subject of another Adjournment debate that I had the privilege of holding. Cheltenham, in my view, is the greatest race course in the world and very successful, but it is not the likes of Cheltenham that are likely to be much threatened by the OFT's proposals. I held that debate to demonstrate my concern for the smaller race courses, which depend for their income on newer or smaller trainers—people who are starting out in the industry. Without the Herefords and Ludlows of this world, there would not be a Cheltenham, so although it is my job to represent the Cheltenham race course in the House, I am also very concerned about the possible effect of the OFT's recommendations on smaller race courses.

There is a problem with income and with potential income, and I want to reinforce what my hon. Friend the Member for South-East Cambridgeshire said. Given the current huge uncertainty in racing, not only over who controls it—which is being questioned—but over the financial side, is this the time for the Minister to bind his hands by abolishing the levy without there being any obvious alternative income stream? I welcome the Bill, and the Minister has by and large done a very good job, but he seems prepared to have his hands bound over one or two aspects, yet not over others. Perhaps we can touch on the matter again on Third Reading, but I support my hon. Friend in asking the Minister to reconsider this aspect, given the tremendous uncertainty in horseracing at the moment.

Photo of Mr David Rendel

Mr David Rendel (Shadow Minister (Higher Education), Education & Skills; Newbury, Liberal Democrat)

I want to make a few short remarks in support of the amendments. They are very important, given the racing industry's serious concern over its future.

My argument really stands on two legs. The first is that the racing industry in many ways moves and changes quite slowly, and is still very traditional. It still depends largely on many employees who work only part-time and for comparatively low wages. They perhaps attend, look after and organise the race course in their local area once a month, during the monthly race meeting, and they depend on racing for their very existence because their income otherwise is negligible, if it exists at all. That is a long-standing situation.

The other leg of the argument is that the betting industry has been changing quickly in recent years, not least because of the advent of offshore betting through the internet and other new forms of betting, and the gambling legislation currently going through. That has led many of the people whom I mentioned, who have perhaps been in racing all their lives, to find their future open to question. Anything that we can do through the Bill to reassure such people that, whatever happens when the betting levy goes, there is a future for racing, there will still be money in it and there will not be a large number of redundancies, will be very welcome. Will the Minister seriously consider whether these amendments could be the ones to reassure those people? They badly need reassurance, and this is an opportunity for the Minister to give them that. I very much hope that he takes it.

Photo of Mr David Heath

Mr David Heath (Shadow Minister (Home Affairs), Home Affairs, Shadow Minister (Constitutional Affairs), Law Officers (Constitutional Affairs), Science, Non-Departmental & Cross-Departmental Responsibilities; Somerton and Frome, Liberal Democrat)

It is with pleasure that I follow my hon. Friends and other colleagues who have spoken, some of whom represent some of the larger race courses in the country, including Cheltenham and Newbury.

I had anticipated that I would support the Bill throughout, including the changes to the Horserace Betting Levy Board, but the OFT report casts the whole Bill in a different light because of its effect on precisely the sort of race course that Mr. Robertson described. I represent one such race course, Wincanton. We had hoped to welcome the Minister there last week, and his comments over the phone to the school there were well received and much appreciated. I still hope that he will come to Wincanton to visit not only King Arthur's school but Wincanton race course. Wincanton is an extremely good race course—although I would say that, because I have lived in its shadow for most of my life. I have seen it grow and progress over the years from a situation, as described by Mr. Page, where one stood under corrugated iron in the pouring rain, to one where one stands in grand grandstands. Wincanton has been built up and improved over the years, and represents an extremely good quality product for those who go there. I do not want to see any of that put under threat by what is now happening.

The problem with the OFT report is threefold. First, as Mr. Salmond said, it does not recognise the intricate balance of power in the industry. Secondly, as Mr. Paice said, the report seems to have a blind spot in that it recognises a monopoly of supply but not a monopoly of purchase. That seems extraordinary. Thirdly—a point that we occasionally miss when discussing such matters in the House—we are dealing with not only a major industry but a major sport. It is the sport aspects of racing that are in danger of attack if the OFT's proposals go through in their current form. I do not believe that Cheltenham and Newbury are at risk. I hope that Wincanton is not at risk, but I recognise that its turnover is just one tenth of Cheltenham's, which is worrying. Wincanton provides entertainment for many people who are very grateful for the chance to see quality racing on their doorstep.

I recognise, however, that only about 37,000 people a year go to Wincanton race course. Inevitably, the financial position of courses such as Wincanton is more precarious than that of the big courses, but courses such as Wincanton provide the motor for the sport and industry of racing by providing opportunities not just for the lower-quality horses but for extremely good-quality horses. I remember seeing the legendary horse Desert Orchid many times around the Wincanton course, where he was a great favourite of the Wincanton race goers. As part of the structure of racing, the provision of races at different levels, at different stages in horses' development in training and at different standards provides the elite horses for the elite meetings in due course.

My last point is that it is not just the race course that is affected. Apart from the number of people employed directly or indirectly when there is a meeting, which extends far beyond direct employees of the race course, I worry about the trainers who have made their homes in, and run their businesses from, Somerset. There are a great number of those, who are very successful, as well as stables, studs, foal-raising enterprises and vets, all of which are part of the bigger industry and the bigger sport that we call horse racing. To me, that is an important part of our rural way of life, certainly in my area and in many others around the country.

If the OFT has its way, what I see developing is a concentration on bigger courses, a concentration on all-weather courses, which have their uses but do not necessarily represent all that is best in racing, a shrinking of the industry as a whole, fewer opportunities for new entrants to racing, and a loss of competitiveness—British racing already has a problem of competitiveness compared with overseas competitors. If we lose prize money, facilities and the structure of racing, all of those together will make a serious problem.

I support the amendment. I hope that, at the very least, it will buy time to enable a sensible arrangement to be worked out. I know that the Minister is involved at least tangentially in this matter, and that progress is supposedly being made. I am concerned to ensure that we do not have a forced compromise that is not in the interests of racing, simply because of the time constraints and working against the legislative framework. I applaud what the Minister has done in relation to extending the levy for a year, but we must get this right. We must get the OFT to understand what it is doing in this area, as in so many others in which it intervenes and fails to see the wood for the trees. Most of all, we need to maintain a grass-roots industry. That may be an awful cliché to use in the context of racing, but we must make the industry and sport work from the bottom up, rather than having an elite structure that is to the detriment of racing as a whole.

6:30 pm
Photo of Mr Alan Meale

Mr Alan Meale (Mansfield, Labour)

I see a lot of credit in both amendments tabled by the Opposition.

The explanation given of Amendment No. 3 was that it is intended to ensure propriety and to ensure that the handover of assets and everything else connected to the levy board goes smoothly and honestly. I have seen instances of that not happening in the past when public assets have been transferred after a named date for transfer. The kind of propriety that we should lead people to expect, as their representatives, has not occurred. In relation to Teesside development corporation—to name one case—hundreds of millions of pounds seemed to go missing, with photocopying machines and the like turning up months and even years later without anybody being able to explain what had happened.

What worried me in the explanation of Mr. Paice was whether the purpose of the amendment was to get round the Government's intention to hand back the role of the levy board to racing. He is a prominent supporter of racing in the House, and has been a leading member of the all-party group on racing and bloodstock. He is therefore acutely aware that the best report recently on racing, and on what needs to be done in relation to its management and structure, was the inquiry by the Home Affairs Committee, which examined not only horse racing but the question of the levy. Its conclusion was that there should be a single body for racing, and I am worried that amendment No. 3 might be used as an extension, whereby two, three or four bodies might remain.

I commend amendment No. 4 because it rightly points out the damage being done by the OFT, and its mismanagement and mishandling of matters on behalf of the people who work in racing and depend on it for a living. As was mentioned, many people in the industry do not have a lot of money. There are 150,000 people in the industry who depend on it every day for their livelihood. They might work in betting shops or stables, and they certainly do not make money out of gambling. They are not wealthy people, and they depend on us to pass legislation to safeguard their futures.

I therefore commend amendment No. 4, but I am worried about the implementation and purpose of amendment No. 3.

Photo of Mr Richard Caborn

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

I resist amendments Nos. 3 and 4, and I want to give the reasons why.

I preface my remarks by saying that racing is a growing industry. Several figures have been quoted on Report and in Committee: the number of supporters of racing has grown from 5 million to 6 million people, and the profitability of the industry is growing. In addition, there is now a recognition of the need to try to bring order to the governing bodies of the sport. I am pleased about the discussions with the British Horseracing Board and its constituent members to try to make sure that we remove from the sport and the industry some of the disarray and unfortunate infighting that has existed. I remind the House that it was the BHB that requested that the levy be removed, and that it believes that it can do a proper commercial deal within the industry. There is no argument about that, and as far as the industry is concerned, it was one of the founding objectives of the BHB. We are therefore talking about an industry that is growing and that still has tremendous potential, and I hope that the decisions on the Tote will make sure that that element of the industry flourishes, too.

On amendment No. 3, which seeks to ensure that the levy board cannot be closed down until provision is made for a transfer scheme to provide for the transfer of the levy board's assets to the new owners, it is unclear why hon. Members feel that the amendment is necessary. For real, practical reasons, we cannot envisage a scenario in which the levy board would close down, or be close to closing down, if we had not already found a home for its assets. That would be ludicrous, and we cannot find any reasons for doing it.

On the more substantive amendment No. 4, on which most of the debate has centred, as I explained in Committee and again this evening, the levy board should be closed and its assets transferred when my right hon. Friend the Secretary of State is satisfied that the time is right. As many Members on both sides of the House have said, this is enabling legislation.

Again, Members have referred to their concerns about the OFT, and I have made clear my concerns in public statements. I have indicated to the House that my right hon. Friend the Secretary of State has written to the OFT, and there has been an exchange of correspondence, which, unfortunately, cannot be put into the public domain. Nevertheless, we can reassure hon. Members that we have responded to the concerns of the House by saying that any settlement should be for the betterment of the industry. My hon. Friend Mr. Meale spoke about how many people are employed in the industry, and we certainly need to factor that in.

I had a meeting with the industry a few weeks ago. I am optimistic that we are moving towards an acceptable compromise. To try to give the industry some stability, I have already announced an extension of the levy to 2006. However, I cannot accept that there is any benefit in the Secretary of State being required to publish a report on the OFT's inquiry before the levy scheme ends.

The specific point raised by the amendment relates not to the inquiry as a whole but to that part concerning the sale of the BHB's data and media rights. My understanding is that the media rights belong predominantly to the race courses and are not part of the inquiry. The OFT's final ruling will clearly not be the responsibility of the Secretary of State or the Government. It will be a matter for the OFT and the BHB. The Secretary of State will probably not even be party to the information, and it is doubtful that we would have access to enough information to produce a meaningful report, even if we wanted to.

It is safe to assume, I believe, that the ruling is of such importance to the racing industry that there will be no shortage of debate when it comes out. We will take into account all relevant circumstances before the Secretary of State exercises her powers in clauses 15 and 16. Our position is known to the OFT and to the industry. We believe that there is now enough common ground to find a solution to the problem. I say that very genuinely. I can give a reassurance that, although clauses 15 and 16 give powers to the Secretary of State, she has no need to exercise them until she is satisfied that it will be for the betterment of the industry and the sport.

Photo of Mr Alex Salmond

Mr Alex Salmond (Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury); Banff and Buchan, Scottish National Party)

I welcome what the Minister just said. As he knows, the sale of media rights will be closely related to arrangements for the sale of data. A cross-party group, the friends of Scottish racing, has been formed to examine these questions specifically in relation to Scotland. Will he undertake to meet us, so that we can express specifically Scottish concerns about the new framework?

Photo of Mr Richard Caborn

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

My door is nearly always open for most people to come and make representations. That is what Ministers are there to do. If the hon. Gentleman wants to raise that matter with my office, we will meet.

I have a lot of sympathy with hon. Members who have the interests of the sport at heart, but they should realise that no responsible Government would pursue early abolition of the levy board if there was any question of there being no adequate funding stream to replace it. I hope that that gives sufficient reassurance to allow the amendment to be withdrawn.

Photo of Mr James Paice

Mr James Paice (South East Cambridgeshire, Conservative)

I thank all who have contributed to the debate, many of whom have made their maiden contribution to proceedings on the Bill on this issue. I am appreciative of the support that has come from all quarters other than the Government Front Bench. I cannot but point out a contradiction in the Minister's position. He has sought, most vigorously, to assure us that all the Bill does is give the Secretary of State powers that she does not have to use unless she is absolutely happy that everything will be fine afterwards, but when we discussed part 1, on the Tote, he referred to the House instructing him to sell it. He cannot have it both ways. There is no difference between parts 1 and 2 in that respect: they are both pieces of enabling legislation.

6:45 pm
Photo of Mr Richard Caborn

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

It is clear that the hon. Gentleman has not followed the debate. There is that which is within our control, and that which is outside it. What is in the Government's control is to be able to sell the Tote, and the price and conditions that go with that. The one thing that we are not in control of—rightly—is the OFT. That is what has created the uncertainty in the provisions for abolishing the levy. I have reassured the House, and it can be seen in our correspondence with the OFT. That is the essential difference.

Photo of Mr James Paice

Mr James Paice (South East Cambridgeshire, Conservative)

I am afraid that that has no relevance whatever to the point that I was making.

Photo of Mr Richard Caborn

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

I will read Hansard tomorrow.

Photo of Mr James Paice

Mr James Paice (South East Cambridgeshire, Conservative)

I suggest that the Minister reads his own comments. He specifically said—it will be in Hansard—that the House is instructing the Government to sell the Tote, yet now he says that the Bill does not instruct the Government to abolish the levy but merely enables the Secretary of State to do so. The OFT investigation is not relevant in that context.

To reply to the hon. Member for Mansfield (Mr. Healel) on amendment No. 3, I certainly do not want more proliferation of organisations. We are at one on that, and that is not the intention behind the amendment. The intention—I find it difficult to see why the Minister cannot bring himself to accept this—is simply that the transfer scheme should be part of the order abolishing the levy board. It is a tiny issue, and for him to resist it seems to me to be obstinacy ruling reason.

Several hon. Members have talked about the value of small courses. I represent a large course, one of the two at Newmarket, and I clearly do not envisage that Newmarket is under threat from whatever the OFT may decide, but we must consider the small courses. We are not talking about the closure of one or two courses—nobody could reasonably argue that that would have a devastating effect on the industry as a whole, although it would on the locality—because all the commentators believe that if the rule 14 order stands, it could lead to the closure of tens of courses, if not more, and that would certainly have a catastrophic impact, not least because, as Mr. Heath said, there is a structure of courses. He referred to Desert Orchid, but many horses never make it to the very famous courses but spend all their lives racing on smaller courses. Others start on the smaller courses and progress to the household names. All courses are important in the interdependent structure of racing, and many hon. Members have pointed out that the OFT seems completely to have failed to understand that.

The commercial approach to producing an income stream for racing, through the sale of data and media rights, must be the right one, and there is nothing between the Government and us in that objective, but it is unrealistic for the BHB, the race courses or any other grouping to start commercial negotiations to generate income to replace the levy until they know what the commercial legislative parameters of those negotiations are to be, as laid down by the OFT.

I welcome the Minister's fond beliefs that the negotiations with the OFT and the industry are going well and that a solution will be found. I very much hope that he is right. All I am suggesting through the amendments is that, in the absence of any conclusion to those negotiations, it would be premature to give the Government carte blanche to abolish the levy board. Amendment No. 3 is the barest minimum step away from that, and amendment No. 4 goes a little further in requiring a report from the Secretary of State. I was surprised when the Minister suggested that the outcome of those negotiations would be confidential. I cannot see how they can be confidential if they are to meet the requirement that everybody understands the marketing structure that could be adopted for the sale of data and media rights. Amendment No. 4 would require that a report be made, and that the House consider it and take a final decision.

It is clear that the Minister is determined to press on and to resist what are minor and reasonable amendments. In the light of his resistance, I shall press them to a vote.

Question put, That the amendment be made:—

The House divided: Ayes 134, Noes 289.

Division number 41

See full list of votes (From The Public Whip)

Question accordingly negatived.

6:50 pm
Photo of Mr Oliver Heald

Mr Oliver Heald (North East Hertfordshire, Conservative)

On a point of order, Mr. Deputy Speaker. You will be aware of the widespread speculation that a statement may be made by the Prime Minister on establishing an inquiry into weapons of mass destruction. Have you, Sir, heard any news in that respect, and would it be possible to ask for at least 45 minutes notice of the deployment of such a statement?

Photo of Mr Michael Lord

Mr Michael Lord (Deputy Speaker)

I can tell the hon. Gentleman that—[Interruption.] Order. I am aware of the speculation to which the hon. Gentleman referred, but, as far as a statement is concerned, I have heard nothing at the moment. Perhaps I could add, in a more jocular vein, that the Chair would sometimes appreciate 45 minutes notice of points of order.