Clause 1 - Dissolution of the tote
Horserace Betting and Olympic Lottery Bill
9:45 am
Mr Richard Page (South West Hertfordshire, Conservative)
The Minister will remember that on Second Reading a number of hon. Members asked for a Committee stage, as it would be a golden opportunity for him to explain how this part of the purchase of the Tote would unravel and give us a clue as to the Government's thinking.
I support the sentiments behind the amendment moved by the hon. Member for Bath (Mr. Foster), but some aspects of its practicalities worry me, such as the method of valuation. We should consider the complexities and difficulties that lie behind the calculation of such a valuation. The hon. Gentleman refers to an ''independent'' valuation: any valuer would want to know the ground rules before moving into a valuation.
In relation to the process of valuation, the history of the Tote should be borne in mind. We know that the Tote has not given the Government any money directly in the form of a licence fee over the past 76 years, but the Government in turn have given the Tote an effective monopoly for 76 years and have enabled a substantial pool betting system to emerge. The Government could have charged a licence over the years if they had changed the law, but, particularly over the past 10 years, the Tote has put a sizeable amount into racing—about £100 million—which could almost be regarded as a licence fee. If the Tote had not put that money into racing, racing would have suffered. The Government's substantial revenues from various aspects relating to racing, particularly betting, would have been diminished, because extra support would have to have gone into racing. The Government should take that into account.
With the acquisition of the Tote, the Government will be taking it over, but, although the Tote is owned by itself, it has a notional value at present. The argument could follow that this value is greater than any value that the racing trust would have to pay the Government, because the racing trust will pay a licence fee to the Government. One could almost work out that the Government should give the racing trust money to take over the Tote, because it will pay a licence fee. I do not advance that too seriously, as I cannot imagine the Chancellor of the Exchequer accepting such a fair and honest evaluation of the situation. My point is that it is very difficult to reach an independent valuation on the Tote.
The hon. Member for Bath touched on the matter. We have the information that a seven-year licence will be granted. I sincerely hope that, when my hon. Friend the Member for South-East Cambridgeshire introduces the appropriate amendments, the Minister will be prepared to accept that the seven-year licence should be included in the Bill. I suggest that we should work backwards when we come to the so-called independent valuation, because one cannot work out the capital value until the size of the licence fee is known, there is an agreement on the amount of money that will go into racing and it is acknowledged that, during the seven years, the entire operation will have to wash its face. One could keep arguing about the various costs that must be taken into account.
This is a golden opportunity for the Minister to take advantage of a compliant and supportive Committee, given all that we are trying to achieve. I hope that when he responds he will explain the basis on which the valuation will be calculated so that we can continue to work and move forward with confidence in him.