HC Deb 02 February 2004 vol 417 cc539-46
Mr. James Paice (South-East Cambridgeshire)(Con)

I beg to move amendment No. 5, in page 3, line 22, at end insert— '(1A) The Secretary of State shall not nominate any person unless satisfied that the person nominated will use all surpluses generated by the company for the support or improvement of horseracing.'. The amendment is a response to debates on Second Reading and in Committee in which we discussed at some length, although not at exceeding length, to whom the Tote should be sold. Opposition Members were worried by the Minister's assertion repeatedly made in Committee—I have the text in front of me—that the House was deciding to sell the Tote full stop and that any constraints on whom it should be sold to would frustrate the will of the House.

The amendment would slightly constrain the Government in whom they sell the Tote to—or, to be more precise, in whom they sell shares in the successor body to—by ensuring that the Secretary of State can nominate someone for transfer of shares in the successor company only if she is satisfied that the person who is nominated will use the surpluses for the support or improvement of horse racing.

The House is familiar with the fact that the Tote's role is to operate an exclusive pool betting system and that all the profits from that, together with substantial sponsorship, go back into horse racing. Various figures have been quoted. For instance, the Tote put roughly £14 million into horse racing in the last financial year. That is a significant sum. It is widely accepted by everyone in the horse racing industry and, I think, by the Minister that we should do our level best to ensure that that flow of resources from the Tote into racing continues.

The Minister made it clear, as did his predecessors and various Secretaries of State, that it is the Government's desire to sell the Tote to a racing trust. Indeed, the House knows that a shadow racing trust already exists and is waiting to negotiate the details with the Government. However, as the Minister said in Committee: No one can give us a complete guarantee that racing will be in a position to buy it. We cannot counter that argument. It is conceivable that the racing industry will not be able to buy the Tote in the envisaged format. What worries me is that if that sale falls through for an unforeseen reason, the flow of resources from the Tote into racing should continue, whatever happens to the Tote itself. Later in response to what he described as a "hypothetical question", the Minister said: The answer is yes, we would sell into something. If we cannot sell into a racing trust, and the House of Commons has said that it wants to sell the Tote, we will be in some difficulties. We would have a piece of legislation instructing us to sell the Tote, and we would therefore have to consider options. That is not our intention."—[Official Report. Standing Committee D, 20 January 2004; c. 25-26.] I think that the Minister showed that he misunderstood the desire of the House. Anyone who paid attention to our debates on Second Reading and in Committee will know that everyone who contributed to the debates did so on the understanding that the Tote would be sold to the racing trust, or at least into an organisation whose interests would be synonymous with those of racing.

The House is not instructing the Minister; rather, it is enabling the Minister or the Government—this is an enabling piece of legislation—to sell the Tote, or at least to transfer the shares in the successor company. I think that the Minister is wrong to suggest, as he did in Committee, that somehow we are instructing the Government to sell and then. by moving amendments, such as amendment No. 5, putting an obstacle in the way.

I have made it clear that I want to see the Tote sold into the hands of the racing trust. Failing that, I want to see it sold into the hands of individuals or a group of people who will ensure that the flow of money into racing continues. That is the only constraint that I wish to put on the Government, and it is only a minor constraint.

The Minister clearly believes that he should have complete freedom, despite the undertakings that he has given to sell to a racing trust. I do not believe that the House wants to give carte blanche to the Minister to sell to anybody regardless. I think that the right hon. Gentleman is making a serious error of judgment if he thinks that that is the view of the House. The Bill does not instruct the Minister to sell; it simply enables him to carry out the policy that he has enunciated on several occasions.

I move the amendment in the hope that the Minister will respond seriously to our points of concern. We all hope that the sale to the racing trust will go through. That is the desire of Members on both sides of the House, including the Minister. However, we must consider what happens if, for some reason, the sale falls through. I seek to introduce a small constraint, which is that the Secretary of State should allow the transfer of shares, or nominate someone for that transfer, if she or he is persuaded that that person has the interests of racing at heart, and that that is where any surpluses that are generated will go.

The Minister may find some technical grounds to reject the amendment. That is commonplace in the House. However, I want him to address the principal issue. Whatever happens to the amendment, the fundamental issue that people in the racing industry want to know is whether he is determined to sell the Tote come what may, regardless of whether the shadow racing trust can purchase it and regardless of whether anyone with an interest in racing can or wishes to purchase it. Is the right hon. Gentleman determined to sell it regardless of those concerns? Is he prepared to sell to anyone, including, possibly, another bookmaker? That is the question that needs to be answered.

I hope that the Minister will say no. I hope that he will make it clear that it is the Government's intention to sell to the racing trust if that is possible, and that if that falls through, he will ensure that the Tote is sold in a way that is equally beneficial to racing. I am looking for that answer from the Minister.

This is an important repetition of debate in Committee. It goes to the heart of future ownership of the Tote and its contribution to racing.

Mr. Don Foster(LD) (Bath)

People who studied our deliberations on Second Reading and in Committee will know that they were distinguished by broad support for the Bill among Members on both sides of the House. It is an enabling measure that, as several hon. Members said on Second Reading, has a number of gaps. The amendment seeks to address a gap that was discussed at considerable length in Committee. The whole House has made it clear that it is in favour of the sale of the Tote if it would benefit both the taxpayer and racing. Committee members agreed that profits should be split 50:50, but there was a clear understanding in Committee and on Second Reading that the purchasers of the Tote were expected to put all the profits from the operation of the Tote back for the benefit of racing. The Minister has implied that he is in favour of such an arrangement.

It is only fair, however, to point out a problem that arose in Committee. Some hon. Members argued that the Government should be required to sell the Tote only to the racing trust. Others, including me, thought that that would tie the Government's hands, and we fully believed that, if the racing trust could not purchase the Tote, there should be an opportunity for negotiation with other bodies. The difficulty is clear in our deliberations on 20 January, especially at column 26, when as the hon. Member for South-East Cambridgeshire (Mr. Paice) said, we failed to get a clear, categorical answer from the Minister to a simple question. I asked whether the Minister would tell the Committee whether he believes that there are any circumstances in which the Government would be prepared to sanction a sale of the Tote to a body that does not intend to put the entirety of the profits received from the Tote into racing".—[Official Report, Standing Committee D, 20 January 2004; c. 26.] Unfortunately, we did not get a clear and unequivocal answer. I suspect that the hon. Member for South-East Cambridgeshire would be happy to withdraw his amendment if we now received a clear assurance from the Minister.

The Bill is an enabling measure and does not require the Secretary of State to sell the Tote. It is possible that the interests of both racing and the taxpayer would be best served if there were no sale. The only circumstances in which I can envisage that happening are if the sale were to be made to an organisation that would not invest the profits in racing. I suspect that the Minister agrees with everything that I have just said. The Bill's progress through the House would be speeded up if he said that he does, and then we would all be happy.

Mr. Alex Salmond (Banff and Buchan)(SNP)

I shall approach amendment No. 5 from a slightly different angle.

I did not serve on the Standing Committee, but I have read its proceedings. Under normal circumstances, I could accept the defence that the Minister made in Committee in response to requests for an assurance to be included in the Bill. However, these are not normal circumstances for the racing industry. There is a great pall of uncertainty because of the intervention of the Office of Fair Trading and speculation about the eventual consequences. Since Second Reading, the broadcasting of racing has been up in the air. Contracts that were supposed to be in place are being renegotiated as we speak. In that fevered atmosphere, if the Minister cannot find a way to include such an assurance in the Bill, could he not act as a beacon of stability and try to provide assurances about one aspect of the future of the racing industry? This applies to other amendments as well.

I notice that we have the Minister somewhat outnumbered. We will push our case not on that basis, but on the logic of the argument. I am sure that neither the Conservative party nor the Liberals would be guilty of trying to trap the Minister into doing something to which his civil servants would be opposed. Instead, we appeal to his good will. All sectors of the racing industry have looked to him in recent times to chart a way out of the instability, which could be extremely damaging. The aspect under discussion is under the Minister's control, and no one doubts his good will. Can he not find a way to quell the uncertainty and provide a guiding light as we debate this and other amendments?

4.15 pm
Mr. Richard Page (South-West Hertfordshire)(Con)

Not surprisingly, I support the amendment of my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice). It was debated at reasonable length and with good humour in Committee, so I shall not gallop over that ground again. For most of the debate on the Bill, the Minister has been saying, hand on his heart, "Trust me, I'm a politician." He made a host of generous and warm remarks, which fell just a tad short of commitment. My hon. Friend's amendment asks for a little commitment.

Everyone wants the sale to the racing trust to go through, but the Minister agreed that if it did not, a racing trust could substitute. I understand that the Government do not want their hands tied if all the options fall through—let us hope that they do not fall through, as that would be disastrous for racing. As my hon. Friend said, racing desperately needs the support of the Tote's money. Its finances have improved dramatically over the past couple of years, thanks to the actions of several dedicated and hard-working individuals, but as we heard, various negotiations are taking place.

One or two people may think that the comments and views of the Office of Fair Trading on the matter have not helped the financing of racing, so we are looking for an assurance that the money from the Tote will be available for racing. It is a valuable industry. I shall not go through all the statistics mentioned on Second Reading and in Committee. I cannot see the Minister accepting the amendment at this point but I hope he can give some encouragement that when the Bill goes to the other place, there will be a little more direction and a little more commitment. The Bill lacks a few datum points that would provide certainty for the negotiations and the way forward. I shall return to that in the context of other amendments.

Mr. Laurence Robertson (Tewkesbury) (Con)

I support the amendment moved by my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice). The purpose of the Bill is not to nationalise the Tote, but to privatise it or change its status. It is rather odd that that objective is not in the Bill. The Bill deals with the nationalisation of the Tote, which is not the objective.

As we know, the Tote was set up in the 1920s for the purpose of racing. That is why a racing trust, as opposed to any other form of trust, has been set up. Of course, the Tote takes bets on all manner of sports, but a racing trust has been set up because the Tote was set up for the benefit of racing. The Tote is not just any old bookmaker. Other bookies also put money into racing, but the Tote's profits go into racing, as well as the sponsorship that it puts in. It is therefore a national institution. It has run the exclusive pool betting licence for the benefit of racing and for the benefit of the punters. One pool, as opposed to several pools, means that if the punter is fortunate enough to win, they get a bigger prize than if there were many different pools.

A sale to any body other than one set up purely to benefit racing would be wrong and would miss the point of the Bill. In a brief speech, the hon. Member for Banff and Buchan (Mr. Salmond) described racing's uncertain finances. For example, there is the change in the Attheraces deal, we have uncertainty with regard to the future of the levy board, and the OFT creates great uncertainty everywhere it treads. The last thing that racing needs at the moment is the possibility, albeit small and albeit inadvertent, of any further loss of income if the Tote sale does not go to the racing trust, as we all intend and as I am sure the Government intend.

Given all that, I am left wondering why the amendment is not already in the Bill, and why it is unacceptable to the Government. I cannot foresee circumstances, unless they are brought about by the heavy hand of the Treasury, whereby the amendment should not be included in the Bill. I hope that when the Minister replies he will tell us why it cannot be agreed to and under what circumstances he could envisage selling the Tote to a body other than an organisation set up exclusively for the benefit of racing.

Mr. Caborn

Amendment No. 5 would require the Secretary of State to be satisfied that any purchaser of the Tote would use operating surpluses in the interests of racing, in effect guaranteeing the sale to a racing trust or something like it.

The hon. Member for South-East Cambridgeshire (Mr. Paice) tabled a similar amendment in Committee, as he said, and I repeat yet again that the Government intend to sell to a racing trust. That has always been our intention and it has been restated repeatedly, although it seems to have fallen on deaf ears.

Let us consider the circumstances in which we would not sell to a racing trust. We have heard many arguments about whether the Treasury, and the OFT in its recommendation, which is a matter of public record, are saying that there should be no exclusive licence and the Tote should be sold in the private marketplace. We took a view that that would be wrong. Let us put the Tote into perspective. About 20 per cent. of the Tote's business is the pool, and 80 per cent. is in fixed odds, which, to a large extent, is out there in the marketplace.

I do not believe that the argument for amendment No. 5 has been made. The Government do not believe that we need such a provision in the Bill. We have always said that we want to sell the Tote to a racing trust. We have protected it for seven years and we have set up a shadow racing trust, with which we have had detailed negotiations and which is now in detailed negotiations with the Treasury.

While the Bill was in Committee, I met representatives of the industry for other reasons, but I took up with them the point raised in Committee about the sale of the Tote to an outside body. Could anyone imagine that the industry, given the opportunity, with a seven-year protection and with all the safeguards that we have provided on the price, including the independent evaluation, would not be sold to a racing trust and that the profits would not go back into the industry?

If the argument was that the Tote should be sold in the marketplace in order to obtain a better price, that could well take place. But all the actions that the Government have taken to date show that that is not the case and will not be the case. I can assure the House that the Government want to ensure that it goes to a racing trust.

Mr. Paice

A few minutes ago, the Minister said that the argument for amendment No. 5 had not been made, but now he is making it himself. He is making precisely the point that we are making—namely, that the Tote should be sold to an organisation whose best interests are synonymous with those of racing. We do not doubt his intention, but if he is as determined as he says he is, all we ask is that that be included in the Bill.

Mr. Caborn

We cannot include every hypothetical case in the Bill. To a large extent, that is what we were asked to do in Committee. The case for including this provision in the Bill has not been made, in view of the assurances that have been given and the actions that have been taken. The shadow trust has been set up and there have been negotiations and discussions with the industry. People in the real world—in the money markets and betting industry—believe in our intention to sell to a racing trust; only Conservative Members do not. The Tote and the industry asked for this action to be taken, and it has been under discussion for some considerable time.

Mr. Don Foster

The Minister says that he will not answer allegedly hypothetical questions, but he did so when he said: If we cannot sell into a racing trust, and the House of Commons has said that it wants to sell the Tote, we will be in some difficulties. We would have a piece of legislation instructing us to sell the Tote, and we would therefore have to consider options."—[Official Report, Standing Committee D, 20 January 2004; c. 26.] Can he give us a clear assurance that if it is necessary to sell the Tote, it will not be sold to an organisation that has no intention of putting the profits back into racing? All that we want is a clear guarantee.

Mr. Caborn

The industry has been given all the advantages of protection for seven years to ensure that it can go into the marketplace in an orderly way. We set up the shadow racing trust and worked with the industry to achieve that objective. We cannot accept the amendment, because the case for it has not been made.

Mr. Salmond

Let us say that the right hon. Gentleman's excellent work as Minister for Sport is rewarded by a well-merited promotion to the higher echelons of Government, and that one of the young bloods from the Labour Back Benches who is daft enough to want to privatise the BBC is put in his place. What would happen to his guarantee, which I entirely believe he thinks is right and proper, if it was not in the Bill?

Mr. Caborn

I took over this portfolio from previous Ministers, not only in my Department, but in the Home Office, and the commitment has been consistent throughout. It was a manifesto commitment, and we adhere to those. We set up the shadow trust, and our discussions with the industry clearly show that we have the same intentions. With that goodwill on both sides, we shall achieve our objective.

It is playing with semantics to try to put such a provision on the face of the Bill and I therefore ask the hon. Gentleman to withdraw the amendment.

4.30 pm
Mr. Paice

Given last week's events, I am slightly concerned when the Minister prays in aid his manifesto. He is renowned for his robust approach to life, but as my hon. Friend the Member for South-West Hertfordshire (Mr. Page) said from a sedentary position behind me, to lead with the chin in such a way is brave if not foolhardy. The Minister has told the House what actions that the Government have taken to enable the Tote to be sold to a shadow racing trustߞto all of which I say "Hear, hear." The Government have given their word over and again that they want to sell to a racing trust. They have helped to set up a racing trust, they have entered into negotiations with the trust and they have repeated their intentions time and again. Like the hon. Member for Banff and Buchan (Mr. Salmond), I accept the Minister's word as I accepted his predecessor's word.

However, the Minister appears to have a blind spot. If all that I have said is the case, and if hon. Members of all parties take it as read, why cannot he accept the amendment? It does not go as far as to say that the Tote will be sold to the shadow racing trust; the Minister effectively says that it will be sold to a racing trust. If it is, I shall be delighted and Conservative Members will rejoice, but the Minister said on Second Reading and in Committee that we should not fetter the Government or tie their hands in negotiations. As I said earlier, the Minister said in Committee: No one can give us a complete guarantee that racing will be in a position to buy it."—[Official Report, Standing Committee D, 20 January 2004; c. 25.] Despite the fact that the Minister has spent the past few minutes trying to convince hon. Members of his utter determination to sell to a racing trust, he wants a way out and an opportunity to sell somewhere else if he cannot sell or negotiate the right deal. We all hope that that does not happen. The Minister accepts that there is a slight chance that a sale to a racing trust might not happen. I therefore ask only that if the Tote is not sold to a racing trust, it should be sold at least to an individual, a group or another organisation that will put the money back into racing.

The Minister appears to have a blind spot about the amendment. Clearly, he will not change his position and we must therefore move to other amendments on which we may make progress. Perhaps I am over-optimistic, but I live in hope. However, I emphasise that the issue causes grave concern. I hope that when the Bill gets to another place, the Minister's colleague there will be able to report that negotiations have reached the stage when he can confirm that the sale is going ahead. If not, and if when the measure is debated in another place the position remains vague and negotiations have not progressed to the point of determination, my noble Friends will try to get the assurances that we have sought tonight.

The race has only two possible outcomes and we will lose, at least on the figures if not on the argument. I cannot understand the Minister's refusal to put in the Bill the outcome that he is determined to persuade hon. Members will be achieved. However, he continues to refuse and, in the light of that refusal, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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