EXCLUSIVE LICENCE

HC Deb 02 February 2004 vol 417 cc547-64

Mr. Caborn

I beg to move amendment No. 11, in page 5, line 7, at end insert— '(1A) The exclusive licence shall, unless revoked under subsection (6), have effect for the period of seven years beginning with the date of issue.'.

Mr. Deputy Speaker (Sir Alan Haselhurst)

With this it will be convenient to discuss the following:

Government amendment No. 12.

Amendment No. 7, in page 5, leave out lines 10 and 11 and insert 'any terms or conditions of the licence other than its duration.' Amendment No. 1, in page 5, line 16, leave out from 'Crown' to the end of line 17 and insert— '(c) shall require the Gaming Board prior to the expiry of the exclusive licence to offer for open competition a further exclusive licence for a fixed period provided that such a further exclusive licence shall only be granted to a body whose purpose in holding such a licence is to generate income for the support or improvement of horseracing, and

(d) shall appoint prior to the expiry of the exclusive licence an independent inquiry to advise him whether a further exclusive licence should be issued and whether such a further licence, if issued, should be issued to the successor company or another body.'. Government amendment No. 13.

Amendment No. 2, in page 6, line 2, leave out paragraph (a).

Mr. Caborn

The Government ask for amendments Nos. 1, 2 and 7 not to be pressed.

Amendments Nos. 11 and 12 spell out the length of the exclusive licence and remove its duration as one of the terms and conditions that the Secretary of State may specify when requiring the Gaming Board to issue a licence. We have repeatedly made it clear that any period of exclusivity would be for seven years, but I thought it best to leave the Secretary of State with discretion to issue a different length of licence if, for some reason, circumstances at the time of sale dictated it. It seems that our reassurances were not enough for some Opposition Members, and I agreed in Committee to consider amendments specifying the length of licence. Amendments Nos. 11 and 12 are intended to provide greater certainty for all concerned. Given that amendment No. 7 covers broadly the same ground as my amendments, I shall ask the Opposition not to press it.

We cannot accept amendments Nos. 1 and 2. They introduce the possibility of exclusive licence renewability, although we have made it clear that the exclusive licence will be issued once and once only. The exclusive licence is a transitional measure to safeguard the existence of a strong pool betting market, and to allow the racing trust-owned successor an opportunity to establish itself in a fully commercial environment.

If Members fear that racing will somehow suffer a loss of income when the exclusive licence period ends, I remind them that as long as it is owned by the trust, the successor company will generate an income for racing on the whole of its business, not just pool betting. The split between the pool and fixed-odds betting is roughly 20:80. That business will have been built up on the back of the security provided by the seven-year exclusive licence. I firmly believe that the successor company will have the opportunity within that time to do all that is necessary to secure an income stream for racing for years to come. There is no need to introduce the prospect of renewability when the Government will not take up that option.

Amendment No. 13 will prevent the Secretary of State from revoking the exclusive licence after the successor company ceases to be owned by the Crown. Originally, we thought it wise to allow the Secretary of State a 14-day period in which to revoke the licence as a precautionary measure. It was always possible that something might come to light immediately after issue that would cause the Secretary of State to reconsider whether the licence should have been issued in the first place. However, given that the Gaming Board will retain the power of revocation, and in the light of amendments put forward in Committee that we agreed to consider, the Government propose amendment No. 13 to remove the Secretary of State's discretion in that respect.

Mr. Paice

Far be it from me not to begin by thanking the Minister for fulfilling at least one undertaking that he gave in Committee—to specify the seven-year period in the Bill. I say that unequivocally. I think the Government have been hard pressed to find a justification for changing the wording of the amendment that we tabled in Committee, but I do not grumble about that. The fact remains that the Minister has agreed on the seven years, which I think all Members will welcome, although I remain puzzled as to why he should be happy to turn that undertaking into legal language while continuing to resist other proposals, including some that we have already debated today.

I shall address my remarks mainly to amendment No. 1. Subject to the Minister's reply, I may wish to move the amendment formally after the debate on this group. What concerns me and, I believe, many other hon. Members, is what will happen after seven years. The Minister has repeated this afternoon his absolute determination that, come what may, there will be no exclusive licence after seven years. I understand that position, but I want again to put the counter-argument to him.

When debating another group of amendments, Opposition Members referred to the uncertainties that surround the racing industry, including the Office of Fair Trading investigation, matters before the European Court and the renegotiation of the "Attheraces" contract, which involves media rights to 49 different racecourses. Those are great uncertainties, to which we could add the uncertainty over what will happen to the Tote. The Minister is right to say that seven years will provide time for the Tote to build its fortunes, to recoup the sum that it must borrow to purchase itself from the Government and to establish itself even more solidly in the pool betting marketplace. However, there is an issue of further developments. In Committee, the Minister rightly said that we could not have foreseen seven years ago that betting exchanges would even exist, let alone that they would have the volume of turnover and the impact not only on racing, but on all sports, that they now have. I put it to the House that similar uncertainty exists today. We cannot foresee what innovations in the next seven years, especially using modern communications technology, will put an entirely different complexion on the face of betting and gambling, and on pool betting in particular.

In case the Minister misunderstands my intention, I stress that we are not suggesting that the Tote should have a licence for more than seven years, or that any extension of the licence should be given to the Tote after that period. I am advocating—I shall come to the detail in a moment—simply that before that seven-year period expires, there should be a reconsideration of whether a complete free-for-all in the pool betting market is in the best interests of racing and the consumer—that is, the punter. Consideration should therefore be given to whether a further exclusive licence should be issued to someone at that time.

I am afraid that amendment No. 1 appears slightly differently on the amendment paper from how I intended it to appear, because I did not intend it to include two consecutive paragraphs. They were designed to be alternative paragraphs, and I hope that the Minister will take that on board when he responds. I am the first to recognise that as the amendment stands, its two paragraphs do not follow logically. I had tabled it to suggest alternative paragraphs, but because they referred to the identical part of the Bill, they have been transposed into one amendment. Be that as it may, the amendment's approach and the issue of competition are important.

The amendment's paragraph (c) provides for the issue of a new exclusive licence at the end of seven years. As I have said, that would not necessarily be issued to the Tote; it could be issued to any organisation whose purpose in holding such a licence is to generate income for the support or improvement of horseracing". What is clear in that is that there should be an open competition.

In Committee, quite a lot of reference was made to the national lottery. The Minister sought to ridicule any comparison with the national lottery by saying that it was acquired by open competition. Yes, that is fine, and that is precisely what we propose: just as is the case when the lottery licence runs out, or prior to its running out, the Government or their agencies must decide on the basis of an open competition—just as they did before they decided to reissue the national lottery licence to Camelot, despite their manifesto undertakings, of which I hasten to remind the Minister-to whom to issue a further exclusive licence.

4.45 pm

Paragraph (d), which I had intended as an alternative approach, simply suggests that prior to the end of the seven years' exclusivity, an inquiry should take place into what has happened over those years in order to advise the Secretary of State whether it would be in the interests of racing and the punter to issue a further exclusive licence, and whether such a licence, if issued, should be issued to the holder of the licence—the Tote—or to somebody else.

Those approaches were designed as alternatives, but the fundamental point is that we should not make the decision now when we do not know what the position will be in seven years' time. That period will allow the Tote to recoup its investment and to grow and develop, and it may provide it with the opportunity to compete with all comers in a new, free pool betting market, or it may not, if there have been developments in betting that will militate against that.

The right hon. Member for Livingston (Mr. Cook) on Second Reading and others in Committee have argued that the more organisations that run pool betting systems, the more pools there are. The smaller the pools, the less attractive they are to punters. One wonders whether the national lottery would generate as much money for good causes—the analogy is with the generation of money from pool betting for racing—if instead of there being one national lottery, there were 10, and instead of jackpots of £2 million, £3 million or £5 million, there were jackpots of only £200,000. We need to make that comparison, as I fear that not as much interest may be generated if the pools are much smaller.

I do not know, any more than the Minister does, what the situation will be in seven years' time. The difference between us, however, is that I am prepared to say that I do not know. I do not therefore believe that we should make the decision now, and it is not necessary to make it now. We can leave it for at least five years before having some sort of review. By contrast, the Minister insists that he knows what the situation will be in seven years' time, and that even if he does not know, and he has got it wrong, that does not matter because he is determined to go ahead and there will be no exclusive licence for pool betting. That could be disastrous for betting, racing and the punters.

It is not too late for the Minister to reconsider. He referred in Committee to the fact that the cost-benefit analysis that we were given demonstrated that getting rid of an exclusive licence could seriously harm the Tote and could be a disbenefit to punters and the racing industry. Having accepted that in his published documents, he seems to be running away from that conclusion by saying that, come what may, the licence will be removed and there will be no further exclusive licence.

I hope that the Minister will understand that the call for reconsideration is justified, and that we will need to look at what the picture is closer to the time when it really matters. No decision should be taken at the moment about the non-renewability of such an exclusive licence, which is why I tabled amendment No. 1, albeit in a slightly different form from that in which it appears on the amendment paper, although its import is there. I look forward to the Minister's remarks, and subject to those I may want to press that amendment to a vote.

Mr. Don Foster

I referred earlier to the good nature of our deliberations on these issues in Committee and the fair amount of cross-party consensus. It is nice to see that reflected in a 1–1 score draw: the Minister was not prepared to accept the amendment to guarantee that profits from the Tote continued to go into racing, but I welcome his agreement to write the seven-year period into the Bill.

Given the consensus, it would be churlish of me to criticise the hon. Member for South-East Cambridgeshire (Mr. Paice) for suggesting that his was the amendment that first raised this matter in Committee, when in fact it was raised by the Liberal Democrats. Since we all agree with one another's amendments, who cares?

As the hon. Gentleman rightly said, we must take on the issue of the non-renewability of the seven-year exclusive licence, and whether it really makes sense. As the Minister knows only too well, we debated the issue exhaustively in Committee, but all the evidence that we heard then unfortunately points absolutely and inexorably in one direction alone, and to have no renewal at the end of seven years, regardless of what may have happened, strikes me as completely crazy.

Those listening to our deliberations, or joining in them for the first time, may wonder why these issues are so important. They may not be aware of the huge importance of racing in this country, as both a business and a sport. We know that 6 million people went racing last year and that 100,000 are employed in the industry. We also know that the Tote is a large organisation with a turnover of some £900 million. What happens to the Tote, and whether it continues to support racing, which we hope it will, is an important issue.

Everyone acknowledges that it will be difficult for the new owners to establish themselves under the new arrangements, and if we are to ensure that they continue to put money back into racing, that seven-year period is vital, but the real question is what will happen at the end of that time. All the evidence points to cause for concern if the Tote's operation is then put into the open market, as the Government clearly intend.

The Minister himself said, in a press release of 27 November last year, under the heading, "Tote wins seven year licence to operate horserace pool betting": 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"— It seems that the quotation I have here is incorrect. Perhaps it needs to be checked in Hansard. However, the press release made it clear that the seven-year period is necessary to safeguard the money going into racing.

If the competitive market comes in after the seven-year period, there will be great uncertainty about what will happen. We all know that the right hon. Member for Livingston (Mr. Cook) has a great deal of knowledge and expertise in this area. On Second Reading, he said: 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".—[Official Report, 8 January 2004; Vol. 416, c. 453] Page 22 of the Government's own regulatory impact assessment makes it clear that the loss of exclusivity could lead to the loss of pool betting at some race meetings and race courses, and to lower Tote contributions to racing. Some 10 years ago, the Home Affairs Committee came to a very similar conclusion. So there is real cause for concern as to what will happen at the end of seven years.

As the hon. Member for South-East Cambridgeshire has eloquently made clear, we have no idea what the situation will be in seven years time. The Minister himself drew our attention on several occasions to the new Bill on gambling, pointing out that it will be very difficult to deal with because of the huge changes that are taking place in the industry. They are taking place not just because of betting exchanges, but because of many other factors.

It is worth reflecting on what the Minister said during our deliberations in Standing Committee: We are trying to protect the Tote. The first step is to put it partially into the marketplace, giving it more freedoms and making sure that it can develop in a more robust way. Hopefully"— we should note the use of the word "hopefully"— seven years from now, it will be able to stand in the market place without further protection and with exclusivity."—[Official Report, Standing Committee D, 20 January 2004; c. 44.] We do not know what the situation will be, but the Minister says that "hopefully", that will be the situation. If he wants to support racing and to protect the Tote's future, surely he should agree to these very simple amendments, which would enable us to see how matters have progressed in a few years' time, and to decide whether we should renew the licence at the end of seven years.

Mr. John Redwood(Con) (Wokingham)

Like Government Members and other Opposition Members, I welcome the Government's decision to specify the term of the exclusive licence. Should my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) catch your eye before the summing up of this debate, Mr. Deputy Speaker, I would appreciate a little more guidance from him on amendment No. 1. I am grateful to him for explaining that proposed new paragraphs (c) and (d) are alternatives; that makes matters much clearer. I should point out that I am much more attracted to the latter than the former, and I shall briefly sketch why.

My hon. Friend makes a powerful case in saying to the Minister that no one can be sure what the situation will be in seven years' time. The technology might have moved on, the market might have changed greatly, or new circumstances might have arisen that make our deliberations today rather inappropriate, in terms of specifying what should then happen. So I can quite see the wisdom of warning the Minister against reaching a decisive view today that will operate in seven years' time, perhaps under a completely different Government and certainly under a different Minister. Indeed, many other changes might have taken place by then in the world of gambling and gaming, and in the general marketplace.

I accept the idea, advanced by my hon. Friend, that there should be a requirement for some kind of independent inquiry. I understand that they are very popular these days, although people are not always pleased with, or in agreement with, their results. Proposed new subsection 1(d) does not specify what the successor Minister or Secretary of State should do with the inquiry, but I trust that my hon. Friend has in mind an independent inquiry that will guide, rather than mandate.

Kevin Brennan (Cardiff, West) (Lab)

If an independent inquiry were agreed to, would the right hon. Gentleman agree to abide by its outcome?

Mr. Redwood

Not necessarily. First, I should want to decide what I thought of its terms of reference and of the so-called independent members. In my experience, some inquiries are more independent than others, and some terms of reference more sensibly drafted than others. Therein lies the fun of inquiries and what happens afterwards. I am glad that my hon. Friend the Member for South-East Cambridgeshire is signalling that the inquiry is advisory—to me, the best type of inquiry—and I would like a future Minister to be free to take a wise decision based on decent information. On that basis, it is sensible for a future Minister to appoint good and independent people, who really know the industry and understand the relevant circumstances, to offer the advice.

I can therefore bring myself to support amendment No. 1, if my hon. Friend decides to press it, but I hope that he will stress paragraph (d) rather than (c), which has the same problem as the Minister's original recommendation—that it somehow pre-empts or prejudges what might be wise in seven years' time and that it implies rather more foresight than some of us have at this juncture of the state of horse racing and the betting industry then. On that basis, I welcome my hon. Friend's clarification and look forward to supporting paragraph (d) if the amendment is pressed.

5 pm

Mr. Salmond

I thank the Minister for the seven-year guarantee. I also thank Conservative Front Benchers for clarifying amendment No. 1. I only wish I had known that this morning; I would have been saved 45 minutes trying to puzzle out what they had in mind. Nevertheless, the burden of argument is in favour of the Minister allowing at least the possibility of maintaining the exclusive licence for more than seven years.

In explaining my case, I want to look at the issue from a slightly different angle. Right hon. and hon. Members have rightly stressed the importance of the Tote in providing a guaranteed fund for the racing industry. That has been valuable and is something that by and large the Tote has done extremely well over its period of existence. However, there is another role of pool betting that has not been done so well until very recently but which is none the less very important in the current marketplace: pool betting operated as a monopoly increases overall competition in the betting market. It would be useful if people working in the Office of Fair Trading managed to grasp the point that it is possible to provide a more perfect marketplace and more protection for the consumer by allowing an intervention in the marketplace of that sort.

I realise that the subject is exercising the Minister's mind. It may be helpful to view what has been happening in the betting market as a form of contract between the Government and the players in that market. A few years ago, when the Government took betting tax off, they entered into an informal contract with the industry by which it would move into the world of low margins and high turnover and that would be to everyone's benefit: it would be to the benefit of the Government because the high turnover would generate revenues; it would be to the benefit of the consumer—the punter—because they would get better value from their betting; and it would be to the benefit of the companies operating in the marketplace.

Unfortunately, as human nature dictates, some people liked the high turnover aspect of the market, but would also like high margins.

There are three bulwarks that operate against the margins in the United Kingdom being increased to the extent that they could be over the Irish sea or in other betting and horseracing markets in the world. The first is the on-course bookmakers who, lo and behold, are now under sustained pressure from other forces in the industry. They operate a market on course, which gives protection to the off-course market and keeps the business honest in the sense of keeping the margins down. I do not think that it is any coincidence that these people are now under the severest pressure.

The second bulwark to keep the off-course market honest is the new emergence of betting exchanges—and, lo and behold, those betting exchanges are now subjected to successive pressure from big bookmakers' chains, challenging various aspects of their operations. To his credit, the Minister has thus far resisted that pressure.

The third bulwark that keeps the market honest is the Tote, and Tote betting and pool betting, as an alternative to fixed-odd betting. It is unsurprising that Ladbroke's, for example, has already made it clear that, at the end of the seven-year licence, it wants to move into the pool betting market. With no disrespect to anyone in the company, which presumably wants to maximise its returns, it will do so not with the interests of the consumer and punter in mind, but in the interests of fragmenting the pool betting market and making it a less competitive instrument, thereby increasing margins in the fixed-price market.

As the Minister rightly said, even for the Tote, the balance between overall operations and pool betting is currently 4:1, and the balance is more like 10:1 for broad operations in the betting market. We need a more powerful pool betting market to act as better protection for the consumer, rather than a less powerful one. In the interest of consumer sovereignty and to prevent cartels and organised behaviour developing in the betting market to the detriment of everyone—in addition to generating income for racing—I hope that the Minister will think it sensible at least to provide for the possibility that the guaranteed licence should continue after the seven-year period has expired.

Mr. Page

I shall begin by thanking the Minister for introducing Government amendment No. 11. In Committee, he coyly—and rather delphically—said: I am minded that complete certainty about its length would be welcomed by the racing industry, the Tote and members of Committee."—[Official Report, Standing Committee D, 20 January 2004; c. 42.] I wondered what would emerge at the end of the day, so I am exceedingly grateful for Government amendment No. 11.

Government amendment No. 11 is an important datum peg in the valuation process. As the Bill progresses through this House to the other place and back again, I urge the Minister to consider putting other datum pegs in place. When it comes to valuing the Tote, it will useful to know what sort of licence fee the Government will require. He will appreciate that a higher licence fee will mean a lower sum to Government, and that a lower licence fee could possibly mean a higher sum to Government. The more datum pegs we have, the easier it will be to calculate the valuation. I know that the Tote, among others, would welcome knowing what its possible commitment might be.

I also congratulate the Government—the habit of congratulating them sits ill upon my shoulders—on once more resisting the pressures of the OFT and its arguments for open competition for pool betting. The hon. Member for Banff and Buchan (Mr. Salmond) made some valid points about the value of pool betting. I do not want to give hon. Members or, in particular, my constituents the idea that I am a habitual gambler, but one can see pool betting operate at a greyhound race meeting. If a dog—let us say Saucy Sue in track 2—is 6:1 and I rush forward and place a £2 each-way bet, suddenly that dog is odds on favourite and my £2 each-way bet has had a disproportionate effect. Obviously, larger pools offer greater stability, which we all want to see. With larger pools, punters have greater confidence that they are getting a fair market price rather than one that has been distorted by a small amount of money such as my £2 each way.

Mr. Laurence Robertson

My hon. Friend has greater experience of these matters than me—generally—so he will know that that does not just happen at a poorly attended dog track; it can also happen at a fairly poorly attended horserace meeting.

Mr. Page

My hon. Friend makes a valid point and emphasises how appalling it would be if there were so many pools that they became little puddles and the odds became farcical.

I shall continue with the theme of what will happen after those seven years. I am not that exercised about the European Union's reaction to the monopolies that may occur in pool betting. The French have a strong monopoly and I cannot see them giving it up lightly and easily because some commission or other says something, and we should take a degree of comfort from that.

Commission or no commission, the Bill says that competition will be allowed after seven years, which is fine in theory, but the questions just keep rolling on. Would new entrants have to form duplicate racing trusts for their money to benefit racing?

Would courses have to take compulsory extra kiosks to sit alongside the Tote kiosks? As pool betting expands, will there be a licence fee? How would that be calculated? Would racecourse associations want that? Would pool sizes be regulated in any way? The prospects for the situation after seven years are murky, to say the least.

Mr. Salmond

The hon. Gentleman demonstrates huge expertise in these matters, but he will know that the process could be more insidious than he suggests. When the Tote and large bookmaking chains were in an organisation called Tote Direct, the chains were reluctant to see the Tote provide better value for the consumer to maintain margins in the pool market. It might even transpire, after seven years, that the cost of non-intervention in the marketplace is to increase the margins—to the detriment of customers.

Mr. Page

The hon. Gentleman makes the point that the route ahead, in seven years' time, is indeed, let us say, unclear. I shall stand down at the next election, which will no doubt be welcomed by many people, especially my successor, but we should endeavour either to answer the questions now or to refuse to tie the hands of those people who will take on the job in the future.

I am not sure how my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will deal with amendment No. 1, because it contains two alternatives in paragraphs (c) and (d), but I shall support him whatever he does.

Mr. Paice

What a happy coincidence. Should I be fortunate enough to catch your eye at the end of the debate, Mr. Deputy Speaker, I shall attempt to move paragraph (d) of amendment No. 1, excluding paragraph (c). I accept that they are mutually contradictory: they were meant to be two separate amendments.

Mr. Page

I congratulate my hon. Friend, because he may have set a trend. We can table a host of different provisions under one amendment and then mix and match to get the right one, depending on the outcome of the debate—even though that might make it difficult for the Minister, who would need an omnibus brief.

My great expertise in gambling has been mentioned, but it has not benefited my lifestyle. However, I serve on the gambling review committee, which is considering all aspects of the changes in gambling in this country. As part of that, we are considering the future form of the Gambling Commission, which will take over from the Gaming Board and will have many more powers and strengths. I shall not ask the Minister to accept my hon. Friend's omnibus amendment, because that would be a bridge too far, but it would be helpful if the Minister could make one of his Delphic announcements—as he did on the seven-year licence—about considering the future of pool betting after seven years in some shape or form as the Bill progresses through the House. We do not want to tie the hands of those who will address the issue in seven years' time on the basis of the imperfect knowledge that we have today. We need to see how successfully the Tote operates in the market, and then we can decide.

My hon. Friend's omnibus amendment No. 1 mentions an "independent inquiry", and I wonder whether the Gambling Commission could be asked to consider the issue and advise as necessary. I hope that the Minister agrees that my hon. Friend has made a valuable point.

5.15 pm

Jim Sheridan(Lab) (West Renfrewshire)

I was disappointed to hear that the hon. Gentleman is standing down at the next election. I certainly hope that he enjoys a longer retirement than some of the horses and dogs that are retired from racing and finish up as sausagemeat.

The hon. Gentleman referred to an independent inquiry. In view of the point made by the hon. Member for Banff and Buchan (Mr. Salmond) about honesty and integrity in the horseracing business, perhaps there should be such an inquiry, as more punters, or consumers, would be attracted if they felt that the industry was honest. The hon. Member for South-West Hertfordshire (Mr. Page) mentioned odds-on favourites. On Saturday, there were more winners at 66:1, 33:1 or 20:1 than odds-on favourites, so surely we should have an independent inquiry into who sets the prices and into how corrupt the horseracing and greyhound businesses are.

Mr. Page

You, Mr. Deputy Speaker, would rightly call me to account if I were to go through the list set out by the hon. Gentleman. It is not only inaccurate but highly emotive. The hon. Gentleman is not inaccurate, however, about the need to care for greyhounds and horses that can no longer race. I am with him 100 per cent. on that point. I sincerely hope that those animals do not end up as sausage meat—at least for the UK market, as that would cause a considerable outcry. There is support for a number of establishments that retrain racehorses and there are other organisations that give homes to greyhounds. Animal welfare is becoming a greater priority and I agree with the hon. Gentleman about that.

On the hon. Gentleman's other point, however, I have to say that the nature of betting is such that there are not more winners at 33:1 than at odds-on favourite. That is a statistical guarantee. If he wants me to give him a lesson on how to lose money through betting, I am only too willing to do so, but those 33:1 winners do not come up with the frequency that he imagines.

I shall draw my remarks to a conclusion. The amendment proposed by my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) is the right one, and I hope that the Minister can give us a little comfort in his response and tell us that the amendment will be considered as the Bill progresses.

Mr. Caborn

Yet again, we are rehearsing our arguments in Committee. For the sake of clarity, I shall address one or two things that seem to have got mixed up during the debate.

We want a secure revenue stream for racing through the Tote. After seven years, I do not know whether the Tote will operate purely through the pool or through fixed odds betting. Who knows? The world changes, and we have already seen tremendous change in the industry, so the Tote may go in for betting exchanges. I do not know, but one thing is certain—if it wants to do that, it can, because we are giving it all the opportunities available to the private sector actors in the industry. We are raising the public sector constraints, so that the Tote has every opportunity.

The management of the Tote is second to none and, with a well-run trust and the new freedoms, I would expect it to create, over seven years with some protection, a business that will be able to enter the marketplace and guarantee a funding stream for the industry. Concern has been expressed about that point, but we are ensuring seven years of protection so that the Tote can enter the marketplace effectively.

It is interesting to hear some Opposition Members, especially the right hon. Member for Wokingham (Mr. Redwood) who has always been the great advocate of the marketplace, coming up with support for protectionism. In effect, that is what he is proposing. He has probably spoken up for the marketplace more often than anyone else on the Opposition Benches, but he will go into the Lobby, contrary to his ideological beliefs, in support of even more protection than the seven years on which we all agree. Had we not agreed to that seven-year period—had we not discussed it in Departments and given that guarantee—we would not have been debating these provisions. Furthermore, I would not have been able to include the seven-year provision in the Bill, because there was tremendous pressure to go straight into the marketplace, pool betting and all, including the Tote as it stands.

All that I say to hon. Members is that we took a lot of time to reach an agreement on the seven-year period—first in government and then with the industry—and we believe that it will give the Tote the opportunity to go into the marketplace, and that it will ensure that there will be a future revenue stream for racing.

Mr. Redwood

It is a pity that the Minister decided to make an inaccurate partisan point. I had urged my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) to gravitate from paragraph (c) in amendment No. 1 towards paragraph (d) and thus move the provision in a more market-oriented direction. I want one of the independent inquiry's terms of reference to be to consider how to ensure that the market can operate in the interest of customers. The question is how that could be best designed, given the way in which pool betting and betting in general operate. The Minister is being a little naughty in suggesting that I am trying to get away from the market, because I want an effective market.

Mr. Caborn

That is a somewhat obscure interpretation of what paragraph (c) of amendment No. I would bring about—[Interruption.] I am sorry; I meant to say paragraph (d). Conservative Members have got me confused by the number of amendments that have been tabled. We are debating whether we can have a continued revenue stream into racing.

Mr. Kelvin Hopkins (Luton, North) (Lab)

I welcome the seven-year provision. I speak as one who has spent far too much of his money at the Tote—indeed, I have contributed to it over many years at the Cheltenham festival arid elsewhere. I have trusted the Tote. Does my right hon. Friend agree that we do not need a public inquiry? The seven-year period will give the Government, his Department and the House plenty of time to assess how the system is working and will allow possible adjustments to Government policy if necessary.

Mr. Caborn

May I repeat again that the Government believe that the decision is right? Eighty per cent. of the Tote's business is not the pool; it is fixed-odds betting out in the marketplace where it competes with all the other bookies. I do not know whether that percentage will change over the next seven years—it is entirely up to the Tote, as an organisation. The significant difference between the Tote and companies such as Ladbrokes and William Hill is that its profit will go back to the racing industry through a racing trust. We should protect that revenue stream back to racing, and I have every faith in the Tote.

Several hon. Members

rose—

Mr. Caborn

Let me go on. If we move to the end of the seven-year period, what will we be left with? Let us assume that we had the status quo and that the ratio was still 80:20. We would not be selling the Tote into the marketplace, but the pool. The Tote would still have all its shops and its brand, and it would be in the marketplace to bid with any other firm for 20 per cent. of its business. That is what we are talking about.

Mr. Salmond

Will the Minister address what I said about the Tote acting to keep the test of the market honest for consumers? As I was listening to the tale of woe about Saturday from the hon. Member for West Renfrewshire (Jim Sheridan), it struck me that I probably should have declared an interest—I now willingly do that. If the hon. Gentleman had followed the sensible advice in my racing column on Saturday, he would be feeling a lot better today.

Mr. Caborn

I do not want to get involved in the internal politics of Scotland.

On the 20 per cent. figure, I genuinely hope that the pool will grow under the new arrangements. I hope that the constraints that we will take away from the Tote will mean that it may market the pool aspect of its business more aggressively. There is every argument for the point that the hon. Member for Banff and Buchan (Mr. Salmond) made—it was strongly made when we received advice to sell the Tote into the marketplace on day 1. We believed that it was necessary to put the Tote in a position in which it could grow its business, including, hopefully, the pool aspect of it.

I, for one, would like that to happen so that we bring a countervailing force to fixed-odd betting. It is good for the punter and the marketplace. That is why lifting the constraints off the Tote so that it can aggressively market its portfolio should allow the pool part of its business to grow, probably even against that fixed-odd betting.

Tony Cunningham (Workington) (Lab)

Does my right hon. Friend agree that one of the main reasons why racing is so popular is television coverage? "Attheraces", which covers almost all races, gives tremendous coverage, people become interested and go on to watch racing at meetings. Is he not concerned that by 29 March "Attheraces" might stop covering horse racing? There is even a threat that the grand national will not be covered on television. If we lose that coverage, people might lose interest. Is he worried that that could change the circumstances surrounding the industry?

Mr. Caborn

It could. We have been trying to bring certainty to the industry and I hope that the seven-year licence for the Tote will bring stability. Indeed, the concession to include that in the Bill is a continuation of our attempt to achieve stability. The industry is very important and has a tremendous effect on the rural economy. I hope that people who are negotiating in the industry will take note of the signs that are coming out of the Government.

The case has not been made for amendment No. 1. The Bill ensures that the revenue stream continues into racing because the Tote will be sold into a racing trust. We have given assurances in government and beyond on the seven-year period. It was part of the negotiations on whether we put the Tote straight into the marketplace or allow it to reposition itself under the seven-year licence and then expose the pool part of it to the marketplace.

Mr. Paice

I emphasise that we are not necessarily talking about a subsequent licensing of the Tote. The amendment suggests that there should be an inquiry on whether a single exclusive licence should operate pool betting. That is not necessarily related to the Tote, but is in the interests of the overall gambling market, to which several hon. Members referred. The issue of a single pool is important. We simply suggest that we should not make the decision now, but leave it to an inquiry in five or six years' time.

Mr. Caborn

There have been inquiries into the pool. The competition authority in Europe has been involved. The Office of Fair Trading clearly recommended that the pool should be sold into the marketplace and that it was for the marketplace to decide whether it should stay as a single pool or be broken up. We took a slightly different view and wanted a halfway house. Discussions in Whitehall led us to believe that the Tote needed some protection so that it could reposition itself by moving from the public sector to the private sector under a seven-year exclusive licence. That was the agreement and we will stick to it. Had we not settled on that, we would not have been able to discuss the amendments.

There is a strong rationale to the agreement. It gives the industry a revenue stream and the punter choice after seven years. It also gives the Tote, as a business, opportunities that it could never have had when it was in the public sector. On that basis, I ask the hon. Member for South-East Cambridgeshire (Mr. Paice) not to press amendment No. 1 to a vote.

Amendment agreed to.

Amendment made: No. 12, in page 5, leave out from beginning of line 10 to 'terms' in line 11.—[Mr. Caborn.]

Mr. Deputy Speaker

We come to amendment No. 1 to be moved formally. As there has been a printing error, I shall read out the text of the amendment to he moved so that the House is clear. It is as follows: in page 5, line 16, leave out from 'Crown' to the end of line 17 and insert…'shall appoint prior to the expiry of the exclusive licence an independent inquiry to advise him whether a further exclusive licence should be issued and whether such a further licence, if issued, should be issued to the successor company or another body.

Amendment proposed—[Mr. Paice.]

Question put, That the amendment be made:—

The House proceeded to a Division.

Mr. Deputy Speaker

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 136, Noes 285.

Division No. 40] [5:30 am

AYES
Allan, Richard	Knight rh Greg (E Yorkshire)
Amess, David	Lait, Mrs Jacqui
Arbuthnot, rh James	Lamb, Norman
Atkinson, Peter (Hexham)	Lansley, Andrew
Bacon, Richard	Laws, David (Yeovil)
Baker, Norman	Leigh, Edward
Baldry, Tony	Lewis, Dr. Julian (New Forest E)
Barker, Gregory	Liddell-Grainger, Ian
Beith, rh A. J.	Lidington, David
Bellingham, Henry	Llwyd, Elfyn
Bercow, John	Loughton, Tim
Boswell, Tim	Luff, Peter (M-Worcs)
Bottomley, Peter (Worthing W)	McIntosh, Miss Anne
Brady, Graham	Mackay, rh Andrew
Brake, Tom (Carshalton)	Maclean, rh David
Brazier, Julian	McLoughlin, Patrick
Breed, Colin	Malins, Humfrey
Brooke, Mrs Annette L.	Maples, John
Burnett, John	Mawhinney, rh Sir Brian
Burns, Simon	May, Mrs Theresa
Burt, Alistair	Mercer, Patrick
Cable, Dr. Vincent	Mitchell, Andrew (Sutton
Carmichael, Alistair	Coldfield)
Chapman, Sir Sydney (Chipping	Moss, Malcolm
Barnet)	Murrison, Dr. Andrew
Chidgey, David	Oaten, Mark (Winchester)
Chope, Christopher	O'Brien, Stephen (Eddisbuly)
Clarke, rh Kenneth (Rushcliffe)	Öpik, Lembit
Clifton-Brown, Geoffrey	Osborne, George (Tatton)
Curry, rh David	Ottaway, Richard
Davis, rh David (Haltemprice &	Page, Richard
Howden)	Paice, James
Djanogly, Jonathan	Portillo, rh Michael
Duncan, Alan (Rutland)	Pugh, Dr. John
Fabricant, Michael	Randall, John
Field, Mark (Cities of London &	Redwood. rh John
westminster)	Rendel, David
Flight, Howard	Robathan, Andrew
Foster, Don (Bath)	Robertson, Laurence (Tewk'b'ry)
Gale, Roger (N Thanet)	Russell, Bob (Colchester)
Garnier, Edward	Sa!mond, Alex
Gibb, Nick (Bognor Regis)	Selous, Andrew
Gillan, Mrs Cheryl	Shephard, rh Mrs Gillian
Goodman, Paul	Shepherd, Richard
Gray, James (N Wilts)	Smith, Sir Robert (W Ab'd'ns &
Green, Damian (Ashford)	Kincardine)
Greenway, John	Simmonds, Mark
Grieve, Dominic	Spelman, Mrs Caroline
Hague, rh William	Spicer, Sir Michael
Hammond, Philip	Spring, Richard
Hawkins, Nick	Stanley, rh Sir John
Heath David	Streeter, Gary
Heathcoat-Amory, rh David	Stunell, Andrew
Hendry, Charles	Swayne, Desmond
Holmes, Paul	Swire, Hugo (E Devon)
Howarth, Gerald (Aldershot)	Syms, Robert
Hughes, Simon (Southwark N)	Tapsell, Sir Peter
Hunter, Andrew	Taylor, Ian (Esher)
Jack, rh Michael	Taylor, Matthew (Truro)
Jackson, Robert (Wantage)	Taylor, Sir Teddy
Jenkin, Bernard	Teather Sarah
Keetch, Paul	Tonge, Dr. Jenny
Kirkbride, Miss Julie	Tyrie, Andrew
Kirkwood, Sir Archy	Viggers, Peter
	Walter, Robert
	Waterson, Nigel
	Watkinson, Angela
	Webb, Steve (Northavon)
	Whittingdale, John
	Widdecombe, rh Miss Ann
	Wiggin, Bill
	Wilkinson, John
	Willetts, David

Willis, Phil	Tellers for the Ayes:
Wilshire, David	Hugh Robertson and
Young, rh Sir George	Mr. Mark Francois
NOES
Abbott, Ms Diane	Dalyell, Tam
Ainger, Nick	Darling, rh Alistair
Ainsworth, Bob (Cov'try NE)	Davey, Valerie (Bristol W)
Alexander, Douglas	Davidson, Ian
Allen, Graham	Davies, rh Denzil (Llanelli)
Armstrong, rh Ms Hilary	Davies, Geraint (Croydon C)
Atherton, Ms Candy	Dawson, Hilton
Atkins, Charlotte	Dean, Mrs Janet
Austin, John	Denham, rh John
Bailey, Adrian	Dhanda, Parmjit
Baird, Vera	Dobbin, Jim (Heywood)
Banks, Tony	Dobson, rh Frank
Barnes, Harry	Donohoe, Brian H.
Barron, rh Kevin	Doran, Frank
Battle, John	Dowd, Jim (Lewisham W)
Bayley, Hugh	Drew, David (Stroud)
Beard, Nigel	Eagle, Angela (Wallasey)
Bell, Sir Stuart	Eagle, Maria (L'pool Garston)
Bennett, Andrew	Edwards, Huw
Berry, Roger	Ellman, Mrs Louise
Best, Harold	Ennis, Jeff (Barnsley E)
Betts, Clive	Etherington, Bill
Blears, Ms Hazel	Field, rh Frank (Birkenhead)
Blizzard, Bob	Fisher, Mark
Borrow, David	Fitzpatrick, Jim
Bradley, rh Keith (Withington)	Flint Caroline
Brennan, Kevin	Flynn, Paul (Newport W)
Brown, rh Nicholas (Newcastle E	Follett, Barbara
Wallsend)	Foster, Michael (Worcester)
Brown, Russell (Dumfries)	Foster, Michael Jabez (Hastings
Browne, Desmond	& Rye)
Bryant, Chris	Foulkes, rh George
Buck, Ms Karen	Francis, Dr. Hywel
Burden, Richard	Gardiner, Barry
Burnham, Andy	George, rh Bruce (Walsall S)
Byers, rh Stephen	Gerrard, Neil
Caborn, rh Richard	Gilroy, Linda
Cairns, David	Goggins, Paul
Campbell, Alan (Tynemouth)	Griffiths, Jane (Reading E)
Campbell, Mrs Anne (C'bridge)	Griffiths, Win (Bridgend)
Campbell, Ronnie (Blyth V)	Grogan, John
Caplin, Ivor	Hain, rh Peter
Cawsey, Ian (Brigg)	Hall, Mike (Weaver Vale)
Challen Colin	Hall, Patrick (Bedford)
Chaytor, David	Hamilton, David (Midlothian)
Clapham, Michael	Hanson, David
Clark, Mrs Helen (Peterborough)	Harman, rh Ms Harriet
Clark, Dr. Lynda (Edinburgh	Harris, Tom (Glasgow Cathcart)
Pentlands)	Havard, Dai (Merthyr Tydfil &
Clark, Paul (Gillingham)	Rhymney)
Clarke, rh Tom (Coatbridge &	Henderson, Doug (Newcastle N)
Chryston)	Henderson, Ivan (Harwich)
Clarke, Tony (Northampton S)	Hepburn, Stephen
Clelland, David	Heppell, John
Coaker, Vernon	Hesford, Stephen
Coffey, Ms Ann	Hewitt, rh Ms Patricia
Cohen, Harry	Heyes, David
Coleman, Iain	Hodge, Margaret
Corston, Jean	Hoon, rh Geoffrey
Cox, Tom (Tooting)	Hopkins, Kelvin
Crausby, David	Howarth, George (Knowsley N &
Cruddas, Jon	Sefton E)
Cryer, Ann (Keighley)	Howells, Dr. Kim
Cryer, John (Hornchurch)	Hoyle, Lindsay
Cummings, John	Hughes, Kevin (Doncaster N)
Cunningham, rh Dr. Jack	Humble, Mrs Joan
(Copeland)	Hurst, Alan (Braintree)
Cunningham, Jim (Coventry S)	Hutton, rh John
Cunningham, Tony (Workington)	Irranca-Davies, Huw

Jackson, Glenda (Hampstead & Highgate)	Murphy, Jim (Eastwood)
	Naysmith, Dr. Doug
Jackson, Helen (Hillsborough)	Norris, Den (Wansdyke)
Jamieson, David	O'Brien, Bill (Normanton)
Jenkins, Brian	O'Brien, Mike (N Warks)
Johnson, Alan (Hull W)	O'Hara, Edward
Jones, Helen (Warrington N)	O'Neill, Martin
Jones, Kevan (N Durham)	Osborne, Sandra (Ayr)
Jowell, rh Tessa	Palmer, Dr. Nick
Joyce, Eric (Falkirk W)	Perham, Linda
Kaufman, rh Gerald	Picking Anne
Keeble, Ms Sally	Pickthall, Colin
Keen, Alan (Felthem)	Pike, Peter (Burnley)
Keen, Ann (Brentford)	Plaskitt James
Kelly, Ruth (Bolton W)	Pollard, Kerry
Kemp, Fraser	Pope, Greg (Hyndburn)
Khabra, Piara S.	Pound, Stephen
Kidney, David	Prentice, Ms Bridget (Lewisham E)
King, Andy (Rugby)
King, Ms Oona (Bethnal Green & Bow)	Prentice, Gordon (Pendle)
	Quinn, Lawrie
Knight, Jim (S Dorset)	Rapson, Syd (Portsmouth N)
Kumar, Dr. Ashok	Reed, Andy (Loughborough)
Ladyman, Dr. Stephen	Reid, rh Dr John (Hamilton N & Bellshill)
Lammy, David
Lawrence, Mrs Jackie	Robinson, Geoffrey (Coventry NW)
Laxton, Bob (Derby N)
Lazarowicz, Mark	Rooney, Tirry
Leslie, Christopher	Roy, Frank (Motherwell)
Levitt, Tom (High Peak)	Ruane, Chris
Lewis, Ivan (Bury S)	Ruddock, Joan
Lewis, Terry (Worsley)	Russell, Ms Christine (City of Chester)
Linton, Martin
Lloyd, Tony (Manchester C)	Salter, Martin
Love, Andrew	Sarwar, Mohammad
Lucas, Ian (Wrexham)	Savidge Malcolm
Luke, lain (Dundee E)	Sedgemor Brian
McAvoy, Thomas	Shaw, Jonathan
McCabe, Stephen	Sheerman Barry
McCartney, rh Ian	Sheridan, Jim
McDonagh, Siobhain	Short. rh Clare
MacDougall, John	Simon, Siôn (B'ham Erdington)
MacDougall, John	Skinner, Dennis
McFall, John	Smith, rh Chris (Islington S & Finsbury
McGuire, Mrs Anne
McIsaac, Shona	Smith, Geraldine (Morecambe & Lunesdale)
McKechin, Ann
McKenna, Rosemary	Smith, Jacqui (Redditch)
Mackinlay, Andrew	Soley, Clive
McNamara, Kevin	Starkey, Dr. Phyllis
MacShane, Denis	Steinberg, Gerry
Mactaggart, Fiona	Stewart David (Inverness E & Lochaber)
McWalter, Tony
McWilliam, John	Stewart Ian (Eccles)
Mahmood, Khalid	Stinchcombe, Paul
Mahon, Mrs Alice	Stoate, Dr Howard
Mann, John (Bassetlaw)	Stringer Graham
Marris, Rob (Wolverh'ton SW)	Stuart, Ms Gisela
Marsden, Gordon (Blackpool S)	Sutcliffe, Gerry
Marshall, David (Glasgow Shettleston)	Tami Mark (Alyn)
	Taylor, rh Ann (Dewsbury)
Marshall, Jim (Leicester S)	Taylor, Dan (Stockton S)
Martlew, Eric	Taylor, David (NW Leics)
Meale, Alan (Mansfield)	Tipping Paddy
Michael, rh Alun	Todd, Mark (S Derbyshire)
Milburn, rh Alan	Touhig, Con (IsIwyn)
Miliband, David	Trickett, Jon
TruswelI, Paul
Mitchell, Austin (Gt Grimsby)	Turner, Dennis (Wolverh'ton SE)
Moffatt, Laura	Twigg, Stephen (Enfield)
Mole, Chris	Vaz, Keith (Leicester E)
Moonie, Dr. Lewis	Vis, Dr. Rudi
Mountford, Kali	Walley, Ms Joan
Mudie, George	Ward, Claire
Munn, Ms Meg	Watson Tom (W Bromwich E)
Murphy, Denis (Wansbeck)	Watts, David

White, Brian	Woolas, Phil
Whitehead, Dr. Alan	Worthington, Tony
Wicks, Malcolm	Wright, Anthony D. (Gt
Wills, Michael	Yarmouth)
Winnick, David	Wright, Tony (Cannock)
Winterton, Ms Rosie (Doncaster C)	Tellers for the Noes: Joan Ryan and
Woodward, Shaun	Margaret Moran

Question accordingly negatived.

Amendment made: No. 13, in page 5, line 44 [Clause 8], leave out from 'Crown,' to end of line 47.—[Mr. Jim Murphy.]