Extension of powers of Horserace Totalisator Board (Hansard, 20 October 1993)

§ The Minister of State, Home Office (Mr. Peter Lloyd)
I beg to move, That this House doth agree with the Lords in the said amendment.
As most hon. Members know, the Tote is keen to take part in a national lottery, but, as the law stands, it is prevented from doing so. The amendment, which was introduced by Lord Wyatt in another place, will enable the Tote to hold a licence to run the national lottery, or promote lotteries as part of the national lottery. The amendment is purely permissive. It simply places the Tote on exactly the same footing as any operator in the betting industry.
The Tote has a good case to be a contender, it being well equipped with up-to-date technology. I believe that it would be wrong if it was to be prevented from applying because we were not prepared to take this opportunity to amend the law to enable it to make the bid.

§ Mr. Pendry
We also agree with the amendment, for good reasons. Not only does the Horserace Totalisator Board have a proven track record of efficiency, but the profits to the Tote are vital to the horse racing industry. Any decline in its profit margin would have a devastating effect on the industry at a time when it is facing enormous 333 challenges. Racecourse attendances were down last year by 3.5 per cent. and courses are finding the economic climate difficult to live with.
Despite all those problems, the Tote is alive and well, but it needs a helping hand from the Government and the amendment helps both the industry and the efficiency of the Tote. Without an operating licence for the Tote, horse racing would be badly affected, as it was in France when such a system was introduced. The PMU, the tote betting organisation for horse racing, took a dramatic nose dive —about 10 per cent. of its takings—and it took years to recover.
The Tote is run effectively and efficiently and it would seem an appropriate body to hold a licence under the terms set out in the Bill. The Tote's fast terminal, which is currently on stream, would be of enormous benefit for a smooth operation.
I move on to a subject already dealt with by my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle). While most people consider the Tote to be a fit and proper body to have an operating licence, would the Minister care to comment on the criteria for a potential operator? The words "fit and proper" were raised in the Committee proceedings, and probed there by my hon. Friend, and in another place. Since that time, and until just a few moments ago, there was a deafening silence from Ministers.
I hope that, when he responds to the debate, the Minister will come clean and tell us that the honesty and integrity of those holding the licence will be necessary to ensure the public's perception of the probity of the lottery. It would not be good enough for the Secretary of State or the Minister merely to trot out the stock phrase, "It will be a matter for the director general to determine." There must be clear ministerial guidelines on a matter of such importance. There is a fear that, as they have failed to give such guidelines, the Government will be lax in the conditions that they attach to the successful bidder to operate the lottery.
As we all know, the lottery will be a multi-billion pound organisation and it will be invested with the trust and expectations of millions of British people. Surely they are entitled to expect the highest standards to be enforced on their behalf. One suggestion is that the operator should not be appointed on the basis of any vetting procedures less vigorous than those established over many years by the Gaming Board. Will the Gaming Board's criteria for "fit and proper" form a useful basis for the director general of Oflot when he considers the matter? We would not expect companies that make sizeable contributions to the Tory party to be favoured in such an exercise. There would be a gigantic row if that happened.
I hope that the Minister will spell out the criteria to be used. In the meantime, in general we are prepared to support the amendment.

§ Mr. James Paice (Cambridgeshire, South-East)
I am sorry that the hon. Member for Stalybridge and Hyde (Mr. Pendry) spoilt his speech with that last, rather cheap, political jibe. He knows that I entirely agree with his earlier comments and my hon. Friend the Minister knows that the health of the racing industry is a matter close to my heart.
There is widespread concern in the racing industry that the lottery will have a knock-on effect on the Tote, the 334 general betting industry and the horse race betting levy. The amendment, which was introduced with the vigour that we would expect from Lord Wyatt, and which has been accepted by the Government, is a major step forward. Without prejudging any outcome, it may provide a way for some make-up of the loss of income for the general betting industry and the Tote. It is a good opportunity for the Tote to expand its operations. As has been said, it has great experience and major resources in sophisticated communications equipment. It has a base spread over most of the United Kingdom and is probably more experienced than any other such company operating in the sector.
I welcome the amendment and I thank my hon. Friend the Minister and the Government for accepting it and thereby allowing the Tote to operate on a level playing field. It is a worth while move. If the Tote gets the licence, that will bring into higher profile the Lloyds bank report on the future of the Tote, on which my hon. Friend the Minister has been sitting for a couple of years. That separate issue would then have to be addressed, but I hope that, as a result of the amendment, my hon. Friend will look favourably at any bid from the Tote.

§ Mr. Peter Lloyd
I am glad to have support for the amendment from my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) and the hon. Member for Stalybridge and Hyde (Mr. Pendry). The hon. Gentleman asked me about the definition of "fit and proper", the Government's view of that phrase and the seriousness with which we took it. He is right. My hon. Friend the Under-Secretary covered much of this ground in his reply to the hon. Member for Liverpool, Walton (Mr. Kilfoyle).
I can add to what my hon. Friend said by telling the hon. Gentleman that my right hon. Friend the Secretary of State intends to appoint a director general who takes his responsibilities extremely seriously.

§ Mrs. Ann Clwyd (Cynon Valley)
Or hers.

§ Mr. Lloyd
In this case, he embraces her.
The Bill is clear. The director general cannot issue a clause 5 or a clause 6 licence unless he is satisfied that the company concerned, and the shareholders who benefit from it, are fit and proper. He will undertake checks, taking fully into account the standards, experience and methods of the Gaming Board. I am pleased that the hon. Member for Stalybridge and Hyde appreciates the effectiveness of the board, which has served us extremely well. The director general will also look at other regulators, because the operation is different from that of the Tote and he may learn from those other bodies. He will do so to satisfy himself in relation to both criminal and financial matters. The potential operators will have to co-operate fully in any investigations that he makes and he will make them before he makes any appointment.
I hope that this addition to what my hon. Friend the Under-Secretary had to say will give some assurance to those hon. Members who are rightly interested in the matter.