Clause 8 - Exclusive licence
Horserace Betting and Olympic Lottery Bill
2:30 pm
Mr Don Foster (Bath, Liberal Democrat)
From the outset, I acknowledge that the Conservatives' amendments would have a similar, if not identical, effect to ours.
On Second Reading, I argued that the Government's intentions are absolutely clear in many parts of the Bill, but that they had failed to write them into the Bill. We have already had examples of that, which we have discussed. The exclusive licence is an example of the Government's clear intention, but it is
not stated in the Bill. In part, I disagree with that stated intention and want to change it, which my amendments would do.
To illustrate what the Government propose to do, which they have made clear, I refer to speeches made by the Secretary of State and the Minister on Second Reading, to a written statement, and to a departmental press release issued on the same day—27 November last year. Under the heading ''Tote wins seven year licence to operate horserace pool betting'', it says:
''The Racing Trust—a consortium of racing interests—buying the Tote will have an exclusive licence to run pool betting for seven years, the Government announced today.''
As I said, the Minister has made it absolutely clear several times that the Government intend the exclusive licence to be issued for a seven-year period.
The Committee will be aware, however, that the Bill does not refer to that seven-year period. That is to be regretted. Some of my amendments would give us the opportunity to write that seven-year period into the Bill; others go further by stressing my genuine concern that no further exclusive licence will be issued once the Government's proposed unspecified licence period is completed. That is the Government's intention, which they make very clear in the Minister's statements on Second Reading and in the press release, which reports the Minister as saying:
''Selling the Tote to the Racing Trust is the right way to fulfil the Government's commitment to sell the Tote. We firmly believe it's in the public interest to open up the pool betting market to effective competition. But we also believe a reasonable period of preparation is necessary in order to safeguard the revenue racing receives from the Tote and its successor is necessary in order to safeguard the revenue racing receives from the tote and its successor.''
The Minister therefore makes it clear that he believes there needs to be an exclusive licence period. He told us, although it is not in the Bill, that that period should be for seven years, as it is necessary to ensure that the Tote is up and running and successful, and that it can guarantee that it will continue to contribute to racing. However, he goes on to say that after that period, which is likely to be seven years, the Government intend to open up pool betting to competition. He says that it is in the interests of racing to do so. My concern is that all the evidence that I and other Members have studied leads us to a different conclusion.
The Committee will be aware that the Home Affairs Committee discussed the matter at some length in 1991. Its report on the Tote made it very clear that forcing pool betting into the open market in seven years' time could lead to a series of small pools and erratic dividends that would undermine public confidence in pool betting. That was the view of the then Home Affairs Committee. More recently, on Second Reading, we heard from the right hon. Member for Livingston (Mr. Cook), who, I expect all hon. Members would acknowledge, has great knowledge of the horse racing industry and sport. He was clear about his view. He congratulated the
Minister on securing a seven-year period after all the attempts by others, not least the Treasury, to settle on a much shorter one. He continued:
''I find it rather strange that anyone should imagine that opening up pool betting to competition helps the punter, because the whole point of pool betting is that the bigger the pool, the more attractive it is to the punter. The greater the competition and the more pools there are, the less attractive it is to the punter. The logic of that, of course, is that I personally would prefer it if we retained an exclusive licence indefinitely''.
The right hon. Gentleman is clear in his view that opening up the arrangement will not be in the interest of punters or of horse racing. The Home Affairs Committee—admittedly in 1991—came to a similar conclusion. However, perhaps what is most surprising is that the Government have themselves reached that conclusion. The regulatory assessment for the Bill shows at page 22 that the loss of the exclusive licence could lead to the possible loss of pool betting at some race meetings and race courses, and lower Tote contributions to racing. The Government's own analysis suggests that that is possible or perhaps even likely.
There is little or no debate, apparently, about whether the ending of the exclusive licence could be, or is likely to be, damaging to racing, and will make it less attractive to punters, which could lead to a loss of benefit to horse racing. The evidence is clear: the route is a dangerous one for the Minister to take. That is why our amendment makes it clear that the licence should be exclusive for seven years, and specifies that it should be renewable. The Government should have the opportunity to assess, after the seven-year period, whether the benefits to racing have been secured. If not, there would be an opportunity for the Government to continue to grant an exclusive licence.
The right hon. Member for Livingston clearly explained why the issue should be re-examined at the end of seven years. He said:
''We should be under no illusion how tough the competition will be at the end of that period of exclusivity. I do not mean any disrespect to Ladbrokes when I say that it is likely to enter into competition. I can say that with some confidence because it has made no bones about the fact that it will be its intention to bid for pool betting when the licence expires. If it were to be successful in displacing the Tote as a provider of pool betting, paradoxically, we would end up not with more competition, but with more monopoly and less competition in the betting market. It is therefore very much in the public interest, as well as in the interest of the racing trust, that there should be that minimum seven-year breathing space for it to establish itself.''—[Official Report, 8 January 2004; Vol. 416, c. 453-54.]
The right hon. Gentleman makes it clear that at the end of seven years life will be very difficult. Surely we must at least be certain that during that period all has gone well and racing has received the benefits that it should expect, before we decide irrevocably not to allow a continuation of a monopoly of pool betting.
I hope that the amendment is clear. I know that it is supported by several members of the Committee and its wording is similar to that tabled by the hon. Member for South-East Cambridgeshire and his colleagues. I hope that the Committee will see its way to agreeing to the amendment and allowing me to write not just a postcard, but a letter to Mrs. Foster.