Horserace Betting and Olympic Lottery Bill

HC Deb 08 January 2004 vol 416 cc442-96

Order for Second Reading read.

Mr. Deputy Speaker (Sir Michael Lord)

I advise the House that Mr. Speaker has not selected for debate the amendment tabled by members of the Scottish Nationalist party.

2.32 pm

The Minister for Sport and Tourism (Mr. Richard Caborn)

I beg to move, That the Bill be now read a Second time.

The Bill covers two distinct subject areas, both of which are of considerable interest to the House, and I shall deal with each in turn. First, it deals with the Government's remaining involvement in the financing and administration of horse racing. Part 1 of the Bill covers the sale and dissolution of the Horserace Totalisator Board, normally known as the Tote. It provides for the vesting of the Tote's assets in a successor company wholly owned by the Crown, and the subsequent sale of that company. The Bill will enable the Government to deliver our manifesto commitment to sell the Tote to a racing trust, and to do so in a way that is fair to racing and to the taxpayer.

The Tote was established as a corporate body in 1928, with an exclusive statutory right to conduct—or to authorise others to conduct—pool betting on British horse racing. It was set up to provide an alternative to fixed-odds betting, and to provide a source of income to the sport of racing.

The Tote's profits, over and above what is required for reinvestment, remain within racing. The Tote is a long-standing symbol of British horse racing, but it is no longer necessary for it to remain a public body. Its present status is not appropriate for an organisation with commercial ambitions that are likely to conflict with the accountability and constraints required of bodies in the public sector.

In March 1999, a review of the Tote's status recommended that the whole of its business should be sold in a single entity. The Government agreed with that recommendation, and we announced in March 2000 our intention to sell the Tote to a racing trust—a consortium representing British horse racing interests. The Bill will enable that to be achieved.

The Government's intention is to sell the Tote to a racing trust. If that is not possible, we will explore other sales options. However, I know that the will of both Houses of Parliament is that we fulfil our manifesto commitment.

Mr. Robin Cook (Livingston) (Lab)

My right hon. Friend follows these matters very closely, and will be aware that considerable work has been done to prepare a shadow racing trust. There is no doubt that that body exists and will make a bid, but I am a little unsettled by his reference to the possibility that the Tote could be sold elsewhere if a sale to the racing trust cannot be achieved. That possibility is not mentioned in the Bill. For the avoidance of doubt, will my right hon. Friend confirm that it is the Government's clear intention to sell the Tote to the racing trust, and that there is no reason at the moment why that should not happen?

Mr. Caborn

I can give my right hon. Friend that confirmation, and I have said already that there is a considerable amount of good will. The shadow racing trust has been up and running for a considerable time, and it has already proved itself. I see no reason why the sale of the Tote to the racing trust should not go ahead, but it would be wrong if the Government did not make provision for other eventualities. In the event of the Tote's sale to the trust not being completed, we would have to come back to the House with new legislative proposals to secure the Tote's transfer away from public ownership. The measure is precautionary, but my right hon. Friend is right that the Government want to sell the Tote to a trust not dissimilar to the one that has been in existence for some considerable time already.

Mr. Laurence Robertson (Tewkesbury) (Con)

I welcome this long overdue Bill, but I agree with the right hon. Member for Livingston (Mr. Cook) that the Bill does not guarantee that the Tote will be sold to the racing trust. The Minister says that he cannot foresee any circumstances in which that would not happen, but one factor that might prevent such a sale would be if the Government asked for too much money. No Government have ever put money into the Tote, so this Government cannot expect to make too much money from its sale.

Mr. Caborn

The hon. Gentleman has gone a little beyond the point made by my right hon. Friend the Member for Livingston (Mr. Cook), but I shall deal with his questions as I make progress with my remarks. However, if the hon. Gentleman catches your eye, Mr. Deputy Speaker, I am sure that he will be able to say more about these matters later in the debate, and also in Standing Committee.

We believe that it is in the long-term public interest to open up the pool betting market to effective competition, but we also believe that a reasonable period of preparation is necessary if the Tote, when it is owned by the racing trust, is to continue to provide a reliable income stream for the sport. I assure the House that I, my right hon. Friend the Secretary of State and our officials would not have spent as much time trying to secure a satisfactory arrangement if we did not believe that the Tote would be sold to a racing trust.

The sale will bring benefits to the betting market through safeguarding a competitive pool, and it will benefit the public by increasing consumer choice and consumer protection. That is why we announced to the House, on 27 November last year, our plans to sell the Tote to a racing consortium. Our current intention is to issue the successor company with an exclusive licence to operate horse race pool betting for British racing for seven years.

Mr. John Greenway (Ryedale) (Con)

Those of us who have followed this issue closely are grateful to the Minister for his efforts in ensuring that the Bill provides for a licence exclusivity period of not less than seven years. However, does he accept that alternative points of view have been raised elsewhere, and that the future of racing faces uncertainty as a result of the Office of Fair Trading rule 14 notice? Would not it give the industry some reassurance if the provision for seven-year exclusivity were to be included on the face of the Bill?

Mr. Caborn

I do not believe that that needs to be included on the face of the Bill. What I am saying today at the Dispatch Box is, according to the conventions of the House, a clear statement of the Government's intentions. That is why I do not believe that the provision needs to be included on the face of the Bill. I hope that the House will agree that a seven-year exclusive licence strikes the right balance between the two priorities that I have outlined. I am convinced that it is the best way forward for racing, the betting industry and the punter.

Mr. Ian Cawsey (Brigg and Goole) (Lab)

Will my right hon. Friend give way?

Mr. Caborn

This is the last time I shall give way, because I would like to get past the third page of my brief.

Mr. Cawsey

My right hon. Friend has been very patient. I take his word about all the people who will benefit from the Bill, but I wish to make a point about the horses involved. Some animal welfare groups have said that the current system raises funds for the longterm welfare and care of racehorses, and they want a guarantee that any new legislation will maintain that system in the future.

Mr. Caborn

If I could get past the third page, I might answer hon. Members' questions before they are asked.

The Bill gives the Secretary of State the power to require the Gaming Board to issue the licence and be responsible for the regulation of pool betting on horse racing. If during the licence period Parliament approves our plans to reform the general law on gambling, it will be for the new Gambling Commission to take over the job of regulation. The seven-year licence will not he extended, and at the end of that seven-year transitional period there will be a new regulatory regime that will allow other operators to provide pool betting as well.

Part 2 of the Bill provides for the abolition of the Horserace Betting Levy Board and its associated levy appeals tribunals. It provides for the transfer of its assets, the abolition of the horserace betting levy system and the issuing of certificates of approval to race courses by the Gaming Board. The Government's intention is that local authorities will take over the Gaming Board's proposed responsibility for the licensing of race courses for betting purposes in due course, as set out in the draft Gambling Bill that is currently undergoing pre-legislative scrutiny by a Joint Committee of both Houses.

The Government undertook two consultation exercises in March and November 2000 to consider whether a statutory system for funding horse racing was necessary. I am sure hon. Members will agree that it should not be for the Government, or another body, to dictate how much bookmakers should pay racing for the use of its product. Therefore, we recommended the abolition of the levy board and the levy system, to be replaced by commercial agreements between the horse racing industry and betting companies.

The Bill helps to end the Government's unnecessary involvement in funding horse racing, while still safeguarding the important work that the levy board does to support veterinary research—much important work is done around Newmarket—and the improvement of breeds of horses. We seek to ensure those are maintained to at least current levels after the abolition of the board. Therefore, the safeguards that my hon. Friend the Member for Brigg and Goole (Mr. Cawsey) requested will be in place, as he will see if he reads the Bill carefully.

Hugh Bayley (City of York) (Lab)

My right hon. Friend will be aware that race courses have benefited from loans at favourable rates from the levy board capital fund. Indeed, every major capital development at York race course, even though it is one of the biggest and best in the country, has been supported by the fund, including a third of the cost of its new Ebor stand. When the levy board capital fund is transferred to a successor body, can my right hon. Friend give me an assurance that it will enjoy the same tax advantages as at present, so that the benefits to race courses can be maintained at the current level?

Mr. Caborn

I shall take that point on board. I do not wish to give a misleading answer now, but I will ensure that that question is answered fully in the course of proceedings on the Bill. I know that it is important for race courses such as York, which has done a fantastic job of upgrading.

I would like to make it clear that the decision to sell the Tote and abolish the levy board is in no way a reflection on their performance. The staff and board members of both bodies have carried out their duties to a very high standard and I am grateful for their efforts.

I turn now to the other subject area covered by the Bill. Part 3 will enable dedicated Olympic lottery games to be established as part of the national lottery, in the event that London is chosen to host the 2012 Olympic and Paralympic games. It also creates the necessary structures for holding the proceeds from those lottery games and a distribution mechanism that will enable those proceeds to be used to meet expenditure in connection with the staging of the Olympic games.

As hon. Members will be aware, we announced the Government's intention to support a London bid for the 2012 Olympic games in a statement to the House on 15 May 2003. Staging the Olympic and Paralympic games in London in 2012 would bring the opportunity to inspire greater participation in sport, increase the medal success of our elite athletes, and, importantly, leave a lasting legacy of community facilities across the country. But it would also bring benefits beyond the sporting sector. A London games would have a positive impact in terms of regeneration, investment and tourism, and we want as many of those benefits as possible to extend across the UK.

Mr. Andrew Love (Edmonton) (Lab/Co-op)

I strongly support the London bid for the Olympics, but as the Member of Parliament who represents Picketts Lock, I am aware of what an uphill task it will be for the Government to win the bid. If we are to gain the advantages that my right hon. Friend has outlined, we need to ensure that we win the bid. The first part of the Bill will set up a trust for the betting levy board, and I suggest the advantages of a mutual trust. The Football Foundation is a perfect example. We need to mobilise public support for the Olympic bid to turn it into—

Mr. Deputy Speaker

Order. Interventions are becoming mini speeches, which means less time for genuine speeches later. I would be grateful if interventions could be brief and to the point, and if the Minister's responses could be in the same vein.

Mr. Caborn

If my hon. Friend catches your eye later, Mr. Deputy Speaker, I am sure that he will be able to develop his point further. It will be discussed during the proceedings on the Bill, in any event.

Chris Bryant (Rhondda) (Lab)

We need to ensure that the benefits of a London bid accrue to the whole country. If we are to win the bid, it will be essential for the Government to be involved in ensuring that every part of the country supports it, and that will require proven benefits for every part of the country, not least Wales.

Mr. Caborn

I do not wish to go into too much detail, but I assure my hon. Friend that we have worked with every regional development agency and all the devolved Administrations. The chair of the Olympic 2012 bid committee, Barbara Cassani, is already touring the country. She has been to Scotland and she has a date in her diary to visit Wales to meet the decision makers and discuss how the staging of the Olympics in London can benefit the regions and the devolved countries. We will ensure that we engage with the decision makers in every part of the UK to ensure that there are benefits from the Olympic and Paralympic games being held in London, as well as from the major cultural festival that would run alongside the games in 2012. That would have a major impact on tourism, regeneration and the development of regional economies, and we are making every effort to put proper communications in place to achieve those aims.

New Olympic lottery games would represent the first time that the national lottery has been dedicated to a specific cause in that way. Staging the Olympic and Paralympic games is an exceptional occasion. It represents the greatest sporting spectacle in the world, and is a unique national opportunity. It is a cause unlike any other, and the measures proposed in the Bill would enable people to buy a ticket knowing that the money would directly contribute to staging the UK Olympic and Paralympic games. That is very important.

Some people will choose to play Olympic lottery games instead of existing national lottery games. However, Olympic lottery games, as part of a wider strategy for growth, have the potential to invigorate interest in the lottery in general, and therefore benefit all the existing good causes. Camelot will, of course, continue to launch non-Olympic lottery games, and more generally we should seek ways to maximise the benefits that hosting the Olympics can bring across all the funding sectors.

It is envisaged that new Olympic lottery games, as provided for in the Bill, would generate an estimated £750 million towards an overall £2.375 billion public funding package. That total includes a substantial contingency.

Pete Wishart (North Tayside) (SNP)

Has the Minister made an assessment of how much good causes and charities will lose as a result of the Olympic games?

Mr. Caborn

Yes; if I remember correctly, it is 5 per cent., but I shall write to the hon. Gentleman and place a copy of my letter in the Library. The assessment was made by Camelot and was announced to the House, so it is on the public record. I cannot recall the exact figure now, but as I said, I will write to the hon. Gentleman to confirm the figure.

In addition to the £750 million from new Olympic lottery games, £340 million will be sought from existing sports lottery distributors. How that is spent will be a matter for discussion with those bodies. Up to a further £410 million will he met, should it be required, by changing the percentage shares going to existing good causes after 2009. My hon. Friend the Secretary of State announced that to the House when she presented the funding package. The balance of the £2.375 billion funding package will be met by money raised through a London council tax, and, if required, by funding from the London Development Agency. It is right that London, as a leading beneficiary, should bear its share of the costs.

Broadly speaking, it is the intention that lottery funding should be directed to sports investment, Olympic facilities and event staging, and that money raised from the Olympic council tax should address the capital requirements of the games, including transport infrastructure.

The Bill will establish an Olympic lottery distributor to make grants in connection with staging the 2012 Olympic and Paralympic games, if London's bid is successful. The new distributor will be lean and focused, with minimal bureaucracy and a small and expert board. A separate distributor is essential to ensure that effective and informed decisions are taken on Olympic expenditure.

All those involved in the bid believe that we have a very strong chance of success for London in 2012, and we will be working to ensure an extremely high standard bid that meets all the International Olympic Committee's criteria. By allowing new dedicated Olympic lottery games, the Government are showing their commitment to do everything possible to bring the Olympics and Paralympics to London in 2012.

I should also like to say that I genuinely welcome the cross-party support that we have received so far in the House. I believe that that support is vital if we are to have the best chance of winning. I also thank the press—it is not often that we do that from the Dispatch Box—but I have noted a unanimity of purpose that is second to none. It has been in evidence right across the board in respect of Olympic decision makers, which will hold us in good stead when we make the final bid in July 2005.

The Bill before the House covers two distinct and important areas. The sale of the Tote and the abolition of the levy board will end the Government's remaining involvement in the administration and financing of horse racing, while ensuring the best deal for racing, the taxpayer and the betting industry. The provision for a new dedicated Olympic lottery game will generate revenues that will be a vital part of the overall funding package for the 2012 Olympics, if London's bid is successful. I commend the Bill to the House.

2.53 pm

Mr. James Paice (South-East Cambridgeshire) (Con)

For the record, I have no declarable interests but, as many hon. Members will know, I have considerable constituency interests in many aspects of the Bill.

The Opposition welcome the Bill in principle, and the core elements of all three parts of the Bill as described by the Minister have our support, but we will need to explore many elements of detail in Committee. Most especially—the right hon. Member for Livingston (Mr. Cook) started this ball rolling—we shall need to debate the absence from the Bill of countless assurances and statements previously made by Ministers.

Parts 1 and 2 relate to horse racing, which is a huge industry, and I know that many of my hon. Friends are as interested and committed to it as I am. I always say that the few minutes of the race that are witnessed live or on television are the tip of a huge pyramid of activity underpinning the few minutes of equine competition. There are 59 race courses in the country, about 14,000 horses in training and 9,500 owners. There are bookmakers, groundsmen, vets, saddlers, stable staff and others—a total of about 100,000 jobs dependent on horse racing.

As my hon. Friend the Member for Ryedale (Mr. Greenway) said, it is a period of great uncertainty for the industry with both Office of Fair Trading and European Court decisions outstanding. There is particular concern that the OFT does not understand racing properly and about the interdependence of its many elements. The original rule 14 notice of April last year would, if carried through, lead to the closure of many courses. That is almost everyone's view. That might not make much difference to the punter who only ever sees racing from his front room or in the betting shop, but it would be disastrous for jobs in many areas, particularly some remote rural areas, and for the public who actually wish to go racing, for whom a few days a year at their local course provides the only opportunity.

The European Court of Justice is considering a reference by the Court of Appeal following a robust High Court judgment in support of the British Horseracing Board's database rights. That judgment is not expected until autumn when it will go back to the Court of Appeal, so the issue may not be resolved until late this year. Although parts 1 and 2 are important, I have to tell the Minister that their impact on racing cannot be fully estimated until the uncertainty over the Office of Fair Trading and the European Court of Justice decisions is clarified.

Part 1 deals with the Tote, which can be traced all the way back to 1926 and to the Racecourse Betting Act 1928, which was sponsored by the Jockey Club. In its last financial year, the Tote contributed £10.7 million to racing, excluding its levy contribution. It operates 450 betting shops as well as pool betting throughout the country. It is a key point that the whole of the racing industry—including, I believe, punters—believes that the Tote is part of racing and is for racing. Any suggestion that its contribution to racing could cease or be reduced would be met with universal hostility.

That brings me to the question about ownership raised by the right hon. Member for Livingston. I take as a good starting point a written answer of 26 May 1999 provided by the then Home Office Minister, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), who stated: The Horserace Totalisator Board is a non-departmental public body whose members are appointed by the Home Secretary. The Board is responsible for the assets owned by the Tote but the Tote itself is owned by no one".—[Official Report, 26 May 1999; Vol. 332, c. 152W.] We have a clear, unambiguous Government statement that the assets are owned by the Tote and that the Tote is owned by no one. Yet the Bill creates the power for the sale of those assets, first by taking them into public Ownership—nationalization—and then selling the company that owns them—privatization—leaving the Chancellor with a cash sum.

Will the Minister confirm whether it is true that the National Audit Office does not consider the Tote as a Government asset? That raises the question whether the Government should take any proceeds from its disposal at all. On what basis will a price be calculated? Will it allow for pension liabilities? I know that the Minister understands the point, but bear it in mind that the more the Tote is forced to borrow to pay for itself, the less will be available for investment in the business.

That leads me to my next point—the exclusive licence. The Bill is silent on the period of exclusivity. We know that the Treasury and the Department of Trade and Industry both wanted a very short period, which underlines their lack of understanding about the relative balance between the licence length and value of any operation. We also know—the Minister reminded us again this afternoon—that the Department wants a seven-year licence. I must ask again: why is that not in the Bill?

After the end of the licence, the Bill envisages a free-for-all on pool betting for any licensed organisation, so if the Government's genuine intention is that the Tote continues to provide a flow of money into racing, it is essential that it is given every opportunity to develop a strong enough business to compete in that environment.

There is nothing in the Bill about future ownership of the Tote; there is not even a requirement for it to be sold to someone with an interest in racing or horses. I hope that the Minister will understand that despite his assurances the industry is a bit distrustful of the Government for not dealing with the question of the shadow racing trust and the future ownership of the Tote in the Bill. Under the Bill, there would be nothing to stop the Secretary of State or any future Secretary of State deciding to sell the successor company to the highest bidder—someone who may have no interest in racing or in putting the profits back into racing.

The picture is even less clear when we consider the levy, due to the uncertainty relating to the ECJ and the OFT. The Opposition accept that in today's world the levy is anachronistic especially, as the Minister has said, in respect of the Government's role in determining it in the event of an impasse in the bookmakers committee. We support the concept of commercial arrangements as the proper means for the provider of a product—the racing industry—to generate an income from those who exploit that product, that is, the bookmakers.

The sale of data and media rights is, in principle, correct, but it would be wrong for us not to point out that bookmakers are opposed to the end of the levy. They argue that, due to the change to a gross-profits taxation basis and a straight 10 per cent. levy, there is much, much less likelihood of the Government ever needing to make a determination in the future. They also argue, understandably, that whereas the levy is VAT-exempt the commercial arrangements that replace it will of course carry VAT, so the cost to bookmakers or, indeed, to the industry will be higher.

It must also be emphasised that because bookmakers have a place on the levy board they have some involvement in how the proceeds are spent. Will the Minister tell the House how he intends to proceed if either the OFT or the European Court, or both, decide that the present commercial arrangements are unacceptable? There is little doubt that, if the sale of data has to be negotiated with lots of smaller groups, proceeds will fall and racing will lose out, which will result in the closure of race courses. If the OFT so rules, is it still the Government's intention to abolish the levy?

The current uncertainty also raises the issue of timing. The plan was for commercial arrangements to take over from 1 April 2005 with the levy board being wound up over the following six months. However, planning for the 2005 fixture list is already under way and by March the levy board must have devised its incentives scheme for that year so that the BHB and race courses can finalise their fixtures by the summer, yet OFT uncertainty means that no one can be sure of what the money flows will be after 31 March 2005. We would thus have no incentive scheme for three quarters of next year and no fixture list could be drawn up.

I understand that the levy board and the BHB have agreed to defer the end of the levy until 2006 in the hope that the OFT dispute and the European Court case will have been resolved. Do the Government accept deferment of the ending of the levy until those disputes are resolved?

The levy board owns two institutions, both of which are in my constituency: the Horseracing Forensic Laboratory, which is at the cutting edge of scientific investigation and the integrity of the racing industry, and the National Stud. Obviously, the transfer plan envisaged in the Bill must include proposals for their future ownership and I know that in principle it has been agreed that the laboratory should go to the BHB and continue to provide integrity services to the Jockey Club while the National Stud will become a freestanding charitable trust. However, as with the Tote, none of that is included in the Bill.

There is understandable concern among the staff of the levy board about their future employment and pension arrangements. Will the Minister give us an undertaking that no transfer scheme will be approved that does not ensure the protection of existing pension arrangements, especially if the end of the levy is deferred?

On the Olympics and the lottery, as the Minister kindly pointed out, the Opposition wholeheartedly support London's bid for 2012 Olympics. There is no reason for us not to do so; we expect to be in office by the time that the decision is made.

Mr. Caborn

The hon. Gentleman is dreaming great dreams.

Mr. Paice

We also dream about gold medals—perhaps that is an even stronger dream.

Despite the Minister's kind remarks, we have some reservations about the level of support from the Government and from their Mayor of London—as he now is. Will they provide the real public support that we need for our bid? It is not yet seen as a whole-London bid, let alone one for Wales and the rest of the UK—the hon. Member for Rhondda (Chris Bryant), who spoke about Wales, is no longer in the Chamber. Many people see the bid as the Mayor's regeneration scheme for the lower Lea valley. Although that scheme is important, it should not be the justification for the Olympics.

There is no better evidence that the bid is not seen as a pan-London one than the comments of the Government's spokesman in the House of Lords, Lord Davies of Oldham. When he was asked about the use of the dome, he replied: My Lords, the Dome is on the wrong side of the Thames in relation to the proposed bid."—[Official Report, House of Lords, 18 September 2003; Vol. 652, c. 1048.] So much for the claim that the whole of London is involved if even the dome is too far away.

A further problem is that at present there is almost no private sector involvement in the bid, which gives it all the appearance of a public sector activity funded by lottery funds and council tax payers, and even national taxpayers through the London Development Agency.

My hon. Friend the Member for Surrey Heath (Mr. Hawkins) will address further aspects relating to the Olympics when he winds up. One thing is clear: there will be a very serious cash flow problem if, as we hope, the bid is successful. We must assume that the lottery proceeds will be received on an even basis after a successful bid and that the council tax contributions are to continue until after the games have been held, possibly until 2016. However, it is my understanding that the Government have yet to come up with any ideas about how we could overcome that cash-flow problem.

We proposed that the lottery begin this summer to coincide with the inevitable surge in public interest during the Athens games. The Government say that the International Olympic Committee has forbidden the start of any lottery until it has taken a decision about the location of the 2012 games, yet they have provided no evidence for that claim. Even if the Government are not allowed to run a lottery specifically to fund the Olympics until a bid is successful there is no reason that the game cannot be started beforehand if there is another purpose. That is the view not only of the Opposition, but also of the British Olympic Association. It is clear that some organisations are already considering the possibility of running scratchcard games to coincide with this year's Olympics if the lottery has not started.

The Opposition propose that even if the London bid fails—we hope it does not—the money raised by then should be used to support our Olympic and Paralympic competitors or, if that were not possible, it should be directed to the British Paralympic Association to provide a trust fund for disabled athletes. We are concerned that the bid does not yet give much publicity to the Paralympics—although the Minister referred to that event. They are a crucial part of the overall Olympic games and a critical part of our bid for public support.

My final point about the lottery relates to the tax that the Government will receive from the sale of Olympic lottery tickets. We believe that they should hypothecate that tax so that the extra funds go directly to the staging of the games. At the current 12 per cent. rate of tax, that would raise about £320 million over seven years, which equates to about half the amount that it is anticipated will be raised by the precept on hard-pressed London council tax payers. I note that they face a further rise of 12 per cent. under their Labour Mayor. We hope that the Government will look carefully into that matter.

In conclusion, I repeat the Opposition's support for the three core intentions of the Bill. However, the Government have shown that they cannot always be relied on to deliver their promises—only about an hour ago, the House saw plenty of evidence of that—so in Committee we shall try to ensure that the Government's commitments are included in the Bill.

Over recent years, every Bill that has come before the House has provided increasing freedom of movement for Ministers—this Bill is exemplary in that regard—with more and more enabling legislation. The Bill gives the Secretary of State powers to close the Tote at any time, to sell the successor company to anyone and to set the price at any level. It will give her the power to wind up the levy board when she thinks fits and to break it up in any way she wishes—save that it must be in the interests of racing, and even then there is nothing in the Bill to stop her retaining the capital fund of £50 million for other purposes. Yet she and the Minister have said—they repeated it today—that all those details are already settled and announced. All I can say is that, if they are so clear and finite, why are they not in the Bill? The Opposition believe that they should be, and that is our determination throughout the process of the Bill.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. Before I call the next hon. Member to speak, may I remind the House that Mr. Speaker has put a 12-minute limit on Back-Bench speeches and that it applies from now onwards?

3.10 pm

Mr. Robin Cook (Livingston) (Lab)

I should declare two interests. First, I have a consultancy with the Tote, which is registrable. Secondly, I have a lifelong passion for horse racing, which is not registrable because it rarely produces sufficient net profit to be of any interest to anyone else. It has, though, given me an insight into the growing popularity of horse racing as a leisure industry. It is perhaps worth drawing the House's attention to the fact that, in the past year, we have had more punters going through the turnstiles at British horse races than at any time for the past 50 years, so we would be wise, as politicians, to treat the horse racing industry with the respect that it is due, given that degree of public interest.

Against that background, it is right that we should transfer the Tote to be run by racing, so that the benefits of the revenue from the Tote go to racing. That principle has the enthusiastic support of the Tote staff. In fairness to the Tote, we should acknowledge that it has shown phenomenal growth in recent years. In the past two years, the staff of the Tote have managed to take up total pool betting by one third—a remarkable degree of growth.

I congratulate, my right hon. Friend the Minister on introducing the Bill and on having secured a place for it in the Government's timetable. The interest and support that he and my right hon. Friend the Secretary of State have shown in the horse racing industry are warmly appreciated by that industry. They will understand if I then have to say that my welcome for the Bill is guarded because of the omission of two key figures, both of which are necessary if we are to achieve the success for the Tote that the Bill deserves to produce.

The first missing figure is what will be the price for the sale of the Tote. The shadow racing trust, which will take over the Tote, I hope, in the fullness of time, is a new animal. It has never traded before. It has built up no capital. It has no money of its own. It will have to borrow every penny for the purchase of the Tote. It will therefore have to repay every penny for the purchase of the Tote. The higher the price, the greater its problem in making a go of it and the less revenue there will be for racing. It is therefore very important that the Tote be sold at a reasonable price.

What might be a reasonable price is a sensitive point. Some may argue that any price is a windfall for the Treasury, since, after all, the Treasury has no right to sell the Tote at all, unless we pass the Bill and, rather curiously, nationalise the Tote, so that it can then be sold. I warn my right hon. Friend the Minister that he is likely to be pressed on that matter as the Bill passes through Parliament. In particular, many of us would feel more comfortable if we could write it into the Bill that the Tote's successor company should be a racing trust, thereby removing any risk that we are approving a procedure in the Bill that could end up with the Tote being sold at a price that only commercial bookmakers could pay.

The other missing figure, which would give us some comfort if it were in the Bill, is the period for which the racing trust will enjoy an exclusive licence. What makes it slightly strange that that is missing from the Bill is that we all know what it is. Indeed, my right hon. Friend the Secretary of State and her colleague the Minister are to be congratulated on securing that figure—I know how tough that battle was—and it is to their credit that they did hang firm and secured a seven-year period of exclusive licence for the new racing trust. It nearly vanished altogether thanks to the intervention of the OFT.

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, but I recognise where we are at and I applaud my right hon. Friends' success in securing a period of exclusivity. I would just stress that seven years is the very minimum that would make this operate.

We need the racing trust to establish its brand in the market. It will need to change the commercial culture of the organisation, and it will need to be able to offer security to staff of top quality if it is going to succeed. None of that can be achieved in anything less than seven years. 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.

I should like to add a word about the abolition of the levy. May I tell my right hon. Friends that I fully recognise that, in the modern world, the era of corporate Britain in which the levy is rooted has passed? Relations between the racing industry and the betting industry will always be characterised by what we might describe as creative tension, but it is not acceptable in the modern world for a Cabinet Minister to try to hold the ring and adjudicate between them. I therefore accept the principle in the Bill on the abolition of the levy, but I echo the note of caution that the hon. Member for South-East Cambridgeshire (Mr. Paice) has just scored.

The assumption when we agreed to the abolition of the levy was that the income from the levy would be replaced by revenue from the commercial sale of data by the race courses to the bookmakers. That assumption has now been thrown into chaos by a parallel intervention by the OFT, which is showing an unwelcome interest in the racing industry generally. If the rule 14 notice stands, racing will have great difficulty establishing a method by which it can have a collective sale of data from all race courses. If each race course has to negotiate with the bookmakers separately, that will make it very hard for small provincial race courses to secure a fair return, since they have little market leverage on their own. That, of course, it is a matter of concern not just to them, but to the racing industry generally because we depend on the smaller courses to produce the stars of the future for the grand occasions.

Mr. Laurence Robertson

Does the right hon. Gentleman, like me, find it rather curious that the Government, quite rightly, should want to shed the responsibility of effectively running racing; but are we not, in effect, seeing that responsibility passed to an unelected quango called the OFT?

Mr. Cook

The hon. Gentleman tempts me into wider waters, which may cause me some difficulty with the occupant of the Chair, but there is a bona fide issue of accountability. If the OFT is intent on making such controversial and dramatic interventions in the future, it may quickly find itself being asked about its accountability for the consequences of the actions that it is taking. Indeed, we are already approaching a situation in which there is a possibility that the National Audit Office may be invited to second-guess the public expense accounts and consequences of the OFT's decisions.

There is, however, an odd asymmetry about the current rule 14 notice. The OFT has decreed that the race courses should be open to be picked off one by one in negotiation on the sale of their data. The OFT has not turned a hair, however, about the idea that the bookmakers have a cartel for the purchase of that same data. I would not want to do an injustice to Ladbrokes, Hill or Coral, particularly as I am wearily aware that Ladbrokes is very quick to pick up on any sense that it has been misrepresented and to register its objection. It may be that, even as we meet, those three great powers are reflecting on the aesthetic beauty of competition theory as set out by the OFT, and they might come forward with proposals that in future they will buy separately racing data from race courses and bid up the payment against each other. I rather doubt it, however.

I suspect that in future years the racing industry will be faced with the bookmakers putting up a collective body for the purchase of data, and as long as that is the case, racing would be wise to absorb the same lesson and make sure it also has a collective authority for the joint sale of racing data. I know that my right hon. Friend the Minister for Sport and Tourism appreciates that point, and his support is welcome, but the House will be put in a difficult position if we are asked to pass a Bill that abolishes the levy when, thanks to the OFT intervention, we currently have no idea of what will replace the levy in the longer term.

I began by saying that racing is a popular sport and is growing in popularity. We should also remember, however, that this Bill is a sober and important measure affecting what is a major industry on which many people depend for their livelihoods. The hon. Member for South-East Cambridgeshire mentioned a figure of 100,000 jobs in the stables, on the race courses and in the betting industry, which is a large number of the employed population of Britain. It puts the racing industry in the same league as the motor car industry and other major manufacturing concerns. We have a responsibility as legislators to do all that we can to make sure that that industry stays healthy. With the reservations that I have expressed, I believe that this Bill will help us to make sure that racing remains a popular sport at home and a centre of world-class excellence abroad.

3.21 pm

Mr. Don Foster (Bath) (LD)

Although the Bill is unlikely to get a great deal of media coverage, it is undoubtedly important both for horse racing and for our bid for the Olympics and Paralympics in 2012, which my right hon. and hon. Friends and I support wholeheartedly. We entirely accept the point made by the hon. Member for South-East Cambridgeshire (Mr. Paice): while we, too, fully support the Bill in all its aspects, we have several concerns about some of its finer details, although we can rightly raise those points in Committee.

I am delighted to follow the right hon. Member for Livingston (Mr. Cook), whose knowledge of racing is legendary, and who points rightly to the crucial importance of this Bill to horse racing, and to the importance of horse racing in the country. As we have heard, horse racing employs more than 100,000 people in this country, but it is also worth reflecting that some 6 million people went racing last year, and the number is growing year on year. In my constituency of Bath, for example, we have an excellent race course which is booming and at which figures are improving. The number of racing fixtures has increased year on year. This year, we have our highest number ever—18—and on average there are 3,400 racegoers at every event. That is an increase of 30 per cent. in just two years. Not only does the race course in Bath create employment, as do all other race courses, but it is an important tourist attraction, and provides a range of facilities that can be used on non-race day events.

The Tote, which is the main focus of part 1 of the Bill, is crucial to racing. After all, its turnover last year was more than £900 million, and it makes a significant contribution to various aspects of racing, including the work that it does to improve horse breeding, to support veterinary medicine and veterinary education, and to help improve the facilities in the 59 race courses around the country.

We are not therefore dealing with trivial issues. I am particularly grateful to the staff in the Library of the House for preparing such an excellent brief to cover and help to explain many of the issues. One of the things that became clear from reading that and many other briefs that we have been sent in preparation for this debate is the Bill's long gestation period, which reflects in part the complexity of the issues and no doubt the difficulty that Governments have had in finding a way of tackling them. During that gestation period, we have had Select Committee reports, industry reports, debates and statements in the House, consultation documents, the establishment of the British Horseracing Board, manifesto commitments and even a change of responsibility from the Home Office to the Department for Culture, Media and Sport.

Despite all that, as other Members have said, what we have before us is only the skeleton of a Bill—an enabling Bill with many blanks left unfilled. As we have heard, we know with absolute certainty, I hope, that the Government intend an industry body, the racing trust, to take over the running of the Tote. That was made clear in what the Minister said today and in the Government's 2001 manifesto, and a shadow racing trust has been established under the excellent chairmanship of Lord Lipsey. There is no mention of any of that, however, in the Bill.

We know that the Government have been in extended negotiations with the racing industry, which have led to the compromises whereby the new Tote owners will be given an exclusive licence for a period of seven years. As the right hon. Member for Livingston said, however, that is not mentioned in the Bill. We know that the Government want to make money out of the deal, as has been made clear, and we have been given a rough idea of the mechanism by which they will achieve that. None of that is mentioned in the Bill, however. As the right hon. Member for Livingston also pointed out, we know that the Government intend to abolish the horse racing betting levy and the levy itself, which is covered in the Bill, but although we have a rough idea of what is intended to replace that income, the Bill contains no reference to any source of alternative income.

The Bill therefore has a large number of gaps that remain to be filled by secondary legislation and by decisions by the Secretary of State. I am not entirely critical of that, however. I understand some of the difficulties. For example, the current issues surrounding the recent OFT report mean that it is difficult to decide what mechanism should be introduced to replace the levy. I was pleased to hear the Minister say in the Chamber on Monday that he was confident that if various parts of the industry get together, a solution can be found. I noted that he said that the Secretary of State has written to the OFT on that matter, and I wonder whether he might make public the contents of that letter so that all Members might see what the Secretary of State said. It strikes me, like the hon. Member for South-East Cambridgeshire, that the OFT approach has been one of treating horse racing purely as an industry and totally ignoring the sporting element, the horse breeding element. and its contribution to veterinary science. I also understand why there is no mention of the racing trust in the Bill. I would not want the Government to be put into a situation in negotiations with the racing trust if the only bid that they knew that they could accept was whatever the trust had to offer them.

Given that I appreciate the difficulties, I am sure that the Minister will recognise the importance of what he has said in the House today and what he will he say in Committee to give people the assurances that they want. They want to know that some of the things that they assume will happen are very much Government intentions.

I and my party agree that the decision to hand over the responsibility of the Tote to the racing trust is absolutely correct. However, the Minister will be well aware that many people disagree with that line. For example, the bookmakers committee has proposed that the sale of the Tote should be by flotation or by auction. It has argued that that could make a greater sum of money available to racing. I remain unconvinced by that argument and certainly unconvinced by the large sums of money that some bookmakers suggest could be realised from the sale of the Tote. Nevertheless, it is important for the Government to make clear the estimates that they have carried out as to the likely effect of such an approach, so that the evidence is clearly before us to show us why they have rejected it.

As I have said, I understand why the Government have not put anything in the Bill about the period of time for which the new body will have the exclusive licence for running pool betting. However, this is one issue on which I believe that the Government may have got things wrong. I am not at all convinced that it is sensible to have an irrevocable seven-year time limit, particularly when much of the Government's research suggests that such a limit could be damaging to the sport.

I understand entirely—the right hon. Member for Livingston referred to this—that there has been considerable pressure from the OFT, the Department of Trade and Industry and from the Treasury to have as short a period as possible. However, I am concerned that the Government are categorically saying that the exclusivity of the licence cannot be renewed after that seven-year period. There is the very real possibility that that could plunge the sport into difficulties after that period has come to an end.

Let me explain the reasons for my view. It is odd for the Minister to say that the temporary exclusive licence is needed to safeguard the revenue racing receives from the Tote and then simultaneously to abandon any chance of prolonging that licence should the revenue not be safeguarded in the next seven years. What evidence is there for the Minister's claim that it's in the public interest to open up the pool betting market to effective competition"? After all, the Department's own regulatory assessment paints a rather different picture. Page 22 shows that the loss of an exclusive licence could lead to the possible loss of pool betting at some race meetings and racecourses and to lower Tote contributions to racing.

I am not convinced that anyone would benefit from the removal of the exclusive licence. That view was expressed clearly by the Home Affairs Committee report of 1991 which argued that horse race pool betting is an area in which monopoly might actually be in the consumer's interest.

The Minister will be well aware of the popularity of pool betting with small punters and family racegoers. Forcing pool betting into the open and into the competitive market could lead to the establishment of a large number of very small pool systems that could lead to erratic dividends that would undermine public confidence in pool betting. Surely if it is in the public interest and in the interests of racing, as the Government report seems to suggest, for pool betting to remain a monopoly, it is crazy to end it even with a seven-year transitional period without at least taking any regard of what might happen in future.

Others Members have asked about the mechanism for determining the price. We get some guidance from the regulatory impact assessment, which states: The Government has indicated that it regards the taxpayer as one of two interests in the Tote, the other being the racing industry. Consequently, the Government would expect proceeds equal to around one half of the Tote's value at sale. We have no set formula; it is around a half. What is the justification for that? What will the figure be? We do not have a clear statement as to what the valuation process will be, or as to when and how the valuation will be carried out. There is a great deal of uncertainty. The Minister will be well aware that the Tote is buying new betting shops at a rate of knots. I understand that it has bought 12 in Scotland in the last month alone, and all that has to be taken into account. We need to know how that will be done.

It is not surprising that the British Horseracing Board, which will be a principle stakeholder in the new trust that will buy the Tote, argues in its briefing that the Minister must make clear on what basis the price for the Tote will be determined prior to the completion of the passage of the legislation". I entirely agree that we need to know that as soon as possible. We have heard from other hon. Members that there is some uncertainty about the legitimacy of the Government's obtaining any receipts from the sale of the Tote. Although I do not support that specific line—I certainly argue that there is legitimate justification for the Government to receive money from the awarding of the exclusive licence—the Minister must make clear the basis on which the Government justify taking money in addition to that which they could expect to get for the awarding of that licence.

Reference has already been made to rule 14 and the Office of Fair Trading. It is increasingly clear that until that matter is resolved, it will be difficult to find an alternative to the Horserace Betting Levy Board and the levy itself. We know what the intended mechanism was to have been and the way in which the OFT's decision made that almost certainly impossible. The Racing Post quite rightly summed up the situation when it said: The government is hardly likely to sanction a transfer to racing while there are still fundamental uncertainties. Surely it makes absolute sense for Minister to make it clear in his winding-up speech that the levy board will continue until the issue has been resolved and a clear alternative has been agreed.

The first two parts of the Bill are movements in the right direction, but there are nevertheless many gaps to be filled and many issues to be considered in Committee. Part 3, which will establish the new lottery game, is also important. The establishment of the game will be an important element of our bid. Liberal Democrats support part 3 of the Bill only because of our total commitment to support the Olympic and Paralympic bid and because there is a need to demonstrate to the International Olympic Committee that robust funding procedures will be in place if our bid wins. In offering such support, I am conscious of the many worries that Liberal Democrats and others have about the likely impact of such a move on other good causes and the fact that the measure represents further Government interference in the way in which lottery funds are distributed. However, exceptions must be made at times when the entire UK comes together to celebrate and promote what our country has to offer.

The Olympic project is enormously exciting. Some 11,000 athletes will compete in 300 events over 17 days with something like 500,000 spectators attending every day. The sheer scale of a successful Olympic bid would provide huge potential for social regeneration in London and nationally, for the development of our transport infrastructure and for the growth of tourism throughout the entire United Kingdom. Of course, it would also inspire future generations of athletes from England, Northern Ireland, Wales and Scotland. I was delighted when the Government announced their support for the London 2012 Olympic bid in May last year, and I know that many hon. Members on both sides of the House have welcomed the decision and spoken sensibly in support of the bid. I was surprised to hear the recent snide remarks made by the mayor of Paris about the London bid. He is wasting his time, because I am convinced that the country that wins the process will do so on the merits of its bid alone. Mr. Delanoe's comments will not influence the IOC and will only tarnish his reputation. Our ability to demonstrate sound financing will be crucial to winning the bid. The inclusion of an element of lottery funding will help the bid to be successful.

Normally, as I have said, we would be inclined to oppose the use of national lottery money for Government spending priorities, and we are prepared to make an exception in this case because we know how popular the hid is and how much cross-party support it has. Coming to that decision has not been easy, because we believe that the Government have a pretty bad record on grabbing lottery funds for their own purposes. A recent YouGov poll demonstrated that one important matter for the public is ensuring that lottery funds remain independent of Whitehall interference. The creation of the new lotteries fund to make grants in line with Government priorities on health, education and the environment was a blow to the independence of lottery funding. The proposed merger, for which legislation is about be introduced, of the New Opportunities Fund and the Community Fund could soon be a further such blow.

In addition, and I hope that no one would deny this, the inclusion of a new lottery game will have a direct impact on the other good causes. It is therefore vital, as we heard in an intervention, that all parts of the country benefit from the use of the Olympic lottery game receipts. After all, those receipts will be generated by people in all parts of the country. It will be much easier to persuade people in Bath, Belfast, Bangor and even Banff to get behind the new game if they know that their area will benefit, and that London will not get all the rewards.

I hope that the Minister appreciates that, given all our concerns about the independence of lottery fund distribution and the possible impact on the other good causes, Liberal Democrat support for this part of the Bill is a major contribution towards maintaining the all-party consensus on support for the Olympic bid.

The Bill is just a skeleton, and I urge the Minister to continue as he started in his introductory remarks, by giving us as much detail as he can on those areas where it is desperately needed. We broadly agree with the principles regarding the future of horse racing and the funding of the Olympic bid. The Bill has had a long gestation and many false starts, but at last we have something to get our teeth into. We will help the Bill to clear its first fence by giving it a Second Reading.

3.42 pm

Jeff Ennis (Barnsley, East and Mexborough) (Lab)

I am grateful for the opportunity to contribute to this important debate. Like most Members who have spoken, I declare an interest: I am joint chairman of the all-party racing and bloodstock group. I am sure that my co-chairman, the hon. Member for South-West Hertfordshire (Mr. Page), will also make a contribution. Ours is one of the biggest and most active all-party groups, and that is reflected in the number of Members who want to speak in the debate.

I congratulate the Secretary of State and her team on introducing the Bill. There have been calls for the measure since I joined the all-party group in 1996, and indeed, as the hon. Member for Bath (Mr. Foster) pointed out, the Home Affairs Committee called for it as long ago as 1991. I hope that I am not being too presumptuous in saying that my experience of discussing this matter in the all-party group, which we have done a number of times since 1996, indicates to me that the Bill will have a fair passage. I think that there is agreement to it in principle on both sides of the House, and it is just a question of trying to smooth its rough edges as it wends it way through the various parliamentary stages.

Many of my concerns, which relate to the involvement—or should I say interference—of the Office of Fair Trading in the future of racing, have already been eloquently expressed by the hon. Member for South-East Cambridgeshire (Mr. Paice) and my right hon. Friend the Member for Livingston (Mr. Cook), and we all look forward with trepidation to the likely outcome of that involvement. The future success of racing could well be prejudiced by the outcome of the OFT's deliberations. Like the hon. Member for South-East Cambridgeshire, I welcome the Government's decision to retain the levy board until at least 2006. That is desperately important in light of the OFT report.

The meat of the Bill is about bringing the Tote under the Secretary of State's control with the intention of selling it on. The Minister gave a commitment today to set up a racing trust for the benefit of racing which is important, given the abolition of the levy board. It is eminently sensible to take both those issues together, as that will allow the Government to withdraw from their direct involvement in horse racing. Over the years, the Tote and the levy board have done a first-class job in channelling funds from betting into racing, but it is in racing's interests to break the link between direct Government involvement and the racing industry, as that will permit the racing industry more control over its destiny and allow it to continue to flourish.

As one or two Members have mentioned, racing in this country is a growing and successful industry and can stand comparison with the racing industries of other countries. In my opinion, it is the best in the world. The Bill does not deal specifically with the onward sale of the Tote, but hon. Members have referred to it. We do not want to get bogged down in the issue today, but it is important that the sale is pitched at an affordable level to allow the Tote to be successful in its new guise. If anything, the price should be lower rather than higher. Hopefully, the Treasury will deploy common sense when it looks at the issue.

The Bill deals with the Tote's exclusive licence on pool betting, which will eventually become non-exclusive. We have already been given a commitment that there will be a seven-year licence, which has been agreed with the industry, and a new regulatory structure will be set up under the supervision of the gaming board. Like the hon. Member for Bath, I have reservations about whether that seven-year period is long enough, but I congratulate the ministerial team on securing that agreement.

As for the successor body, it must have the ability to provide low-interest loans for future race course improvement, as was said in an intervention by my hon. Friend the Member for City of York (Hugh Bayley). A lot of race courses have benefited from low-interest loans, particularly those that they have received from the levy board. My own race course at Doncaster holds the oldest classic in the world, the St. Leger, which has been held since 1776. It wants to redevelop the course so that its facilities are comparable with those at York and Ascot, and has put together a development package totalling £55 million. If the loan scheme fell by the wayside, race courses, particularly the small ones, would experience problems finding alternative ways of financing redevelopment. I hope that the Minister will take on board the need to extend the scheme and continue to offer loans through the new racing trust.

The League Against Cruel Sports has two concerns that are directly relevant to the abolition of the levy—equine welfare and the future of the racehorses that retire every year from racing. I am glad that, in his introductory remarks, my right hon. Friend the Minister gave a commitment that the funding of vet attendance at tracks will be enshrined in the new arrangements, and the Bill indeed makes provision for that. The League Against Cruel Sports estimates that there are some 4,000 former racehorses. The racing industry has a proud record of dealing successfully with such horses, but according to the league, there are roughly 300 former racehorses for which new homes need to be found. It is important that when the new racing trust assumes responsibility, it ensures that funding is provided to deal with the welfare of former racehorses. I hope that the Minister can make some pronouncement on that in his winding-up remarks.

I hope that the measure has support in all parts of the House. It is not a party political matter. It is important to the future success of the industry, which, as my right hon. Friend the Member for Livingston pointed out, is one of the biggest industries in the country. It is also important for the future of the country.

3.51 pm

Mr. John Greenway (Ryedale) (Con)

I declare a longstanding love affair with the Tote, which began in 1991 when, as one of the co-authors of the Home Affairs Committee report which recommended the very action that we are putting through today, I hoped that one day we would have a debate when those measures came before the House. Indeed, as the hon. Member for Barnsley, East and Mexborough (Jeff Ennis) said, it has been argued long and hard many times that we should have the Bill.

Similarly to the right hon. Member for Livingston (Mr. Cook), I have a consultancy with a City public relations company, one of whose clients is the Tote. I was the sponsor of the last Tote Bill in 1996, when we extended the ability of the Tote betting shops to offer fixed-odds betting to other sports, not just to racing. Like a number of hon. Members, I suspect, I am a regular investor in the Tote on course and a less regular investor in the Tote through my Tote credit account.

I also have a considerable constituency interest. Although none of the nine race courses in Yorkshire is in my constituency, Malton is one of the long-standing historic centres of racing excellence through training and breeding, and if the appropriate persons are listening to the debate, I sincerely hope that before the levy is abolished, we will get a £100,000 grant or loan for the laying of a polytrack at the Langton Wold gallops, which we very much need to attract more horses.

I had hoped that when we had this debate, we would be able to use the gushing language of a red-letter day in the 75-year history of the Tote and the 300-year history of racing, and I hope that that is how we will look back on these proceedings. However, I am slightly cautious about that because, as the right hon. Member for Livingston so adequately put it in his speech, although the future of the Tote and the racing industry without the levy has long been on the agenda, we never expected that when we came to debate it the future of racing would have been plunged into such uncertainty by the Office of Fair Trading rule 14 notice. The disputes that that brings with it over the ownership, sale and purchase of media and data rights add to our feeling of uncertainty about what the future holds.

I hope that we can conclude that, despite those uncertainties, it is right for us to proceed now. We have waited a long time for this slot in the parliamentary calendar. I hope, too, that my right hon. Friend the Minister will understand the need for caution in implementing some of the measures which he, or his successor in the years to come, will be given the power to implement, if the Bill goes on to the statute book.

As I have said, the concept of a sale of the Tote to a racing trust has long been accepted as the best option, and I welcome the fact that the Minister accepts that we should be talking about the sale of the whole of the Tote's business, including the betting shops, which contribute substantially to the profits that the Tote ploughs back into racing.

The features that the Minister outlined in his speech, which he has agreed with the industry and which form the basis of the potential successful implementation of the measure, still need to be given stronger force by being included in the Bill. In my intervention, I paid tribute to the fact that he has really fought his corner extremely hard to ensure that the exclusivity will be for seven years, not less. I would have preferred it to have been for longer, and I share the uncertainty of the hon. Member for Bath (Mr. Foster) on what will happen at the end of that seven years. However, our concerns are not about the nature of the promises, but their absolute delivery. In that, we must also have regard to the fact that nothing in the Bill says that the Tote will be sold to a racing trust, although we welcome the shadow trust chaired by Lord Lipsey.

The more important missing ingredient is the price and what formula will be used by the Government to negotiate that. Every penny that is paid is money that would otherwise have gone to racing. We understand and accept that, but unless the price is reasonable, we could be faced with a situation where even at the eleventh hour the Tote may say that it cannot recommend going ahead on this basis. I hope that, in Committee, the Minister will at least be able to give some indication of what the price will be and how it will be calculated.

The affection that racing enthusiasts and people in the industry have for the Tote largely reflects the fact that they feel ownership of it already and their gratitude for the fact that all the profits from the Tote go to racing. That is in sharp contrast to the levy, which is paid by bookmakers. That is always subject to tough negotiation, as the Minister knows, and all too often it has been the subject of eventual determination, first by the Home Secretary and now by the Secretary of State for Culture, Media and Sport. I mean no unfair criticism of bookmakers, but the levy was originally voluntary, and it is not unfair on them to say that they have to fight their corner every time that the levy is negotiated. But both racing and bookmakers have long felt that a commercial negotiation was the better option, and that still has to be the best long-term option.

There are now obstacles in the way. As my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) said, the issue of VAT on bookmaker payments, some £16 million or so a year on the current levy, has not been resolved, and from the racing perspective there is the question that many in racing are asking themselves, which is whether they as an organisation are in a sufficiently strong position to achieve not just more, but at the worst, no less than they get now through the levy by a commercial negotiation.

When the Home Affairs Committee considered the matter in 1991, it said that there was no organisation within racing capable of making that negotiation. Now there is, through the British Horseracing Board, but the OFT rule 14 notice—its unwelcome intervention—is hugely damaging to the negotiation. Until that is resolved, and until the EU interest, to which reference has been made, is resolved, it is not clear to me by whom and to whom the data rights are being sold.

If we end up, God forbid, with each race course having to sell its own data, there will not be 59 race courses within five years of that event taking place, and it will be national hunt courses in the north of Britain, particularly in Scotland, that will suffer. I cannot believe for one moment that anyone in racing or bookmaking could possibly want that to happen.

On balance, therefore, and in spite of those uncertainties, the Government are right to seize this historic opportunity to ask Parliament to pass into law the structural measures needed to achieve what we have all long wanted to see. I hope, however, that the Minister will continue—not just today but as the Bill progresses—to give the assurance that, if necessary, some of these events will be postponed until we are absolutely certain that we are doing the right thing and that the future of racing is secure. That is what everyone in the Chamber wants, and with that spirit of good will in mind, I hope that the cross-party consensus can continue and that we can achieve these long-awaited measures. I wish the Minister and all those who work on the Bill in Committee every success as they attempt to bring that about.

4 pm

Mr. Brian Wilson (Cunninghame, North) (Lab)

In view of all the sporting implications of the Bill, I cannot help but reflect that it is a wee bit of a pantomime horse, in the sense that its front end is not very well connected to its back end. That is also a fair description of the horses that I tend to back. I think that most Members who are waiting to speak want to join in the very interesting and necessary dialogue on the future of the Tote, so I apologise for the fact that I am going to talk about the back end of the Bill—the part that deals with Olympic lottery funding. In mitigation, I would say that I want to make just a few brief points.

I warmly welcome the Olympic and—it is always important to remember that that term includes this—Paralympic bid being made in London's name. Logically, therefore, I strongly support the measure that is being introduced today to provide the necessary funding to support that bid. This will obviously have implications for other beneficiaries of lottery funding right across the country. I know that that point has already been made on Scotland's behalf by its First Minister, Jack McConnell, who has had a meeting with the Secretary of State and, doubtless, my right hon. Friend the Minister.

Perhaps my next point is so obvious that it does not need saying, but the corollary of the fact that the bid will have national implications is that it should bring national benefits to every part of the United Kingdom. A number of people have raised that point today, and it is surely non-controversial, involving, as it does, common sense and common justice. The reason why I thought that it was worth emphasising is that over the Christmas period, I heard the first murmurings of what I am afraid is the inevitable response from a political minority in Scotland that cannot see a gap without trying to drive a wedge into it. We have heard the first utterances to the effect that this is really not Scotland's business, that Scotland it going to lose out, and that it has nothing to do with Scotland. That is all utter rubbish.

My general feeling that I should say something about that was reinforced a few minutes ago, when I was sent a copy of a press release put out today by the Scottish nationalists under the inspiring headline, "Scotland Faces" Olympian Rip-Of?". It contained a sentence that, even in the mean-minded world of nationalism, is something of a classic: if London wants the Games, London should take financial responsibility for them.

Pete Wishart

Hear, hear!

Mr. Wilson

That is the hon. Gentleman's point of view. It is not, however, the point of view of the vast majority of people in Scotland. It is a narrow-minded piece of thinking that should not be allowed to make an inch of progress in the House or anywhere else. I was pleased to find that the only survey, so far as I know, carried out to determine support for the London Olympic bid showed that 80 per cent. of people supported it nationally, and that two parts of the United Kingdom in which support was at its highest were Scotland and Northern Ireland.

That might seem surprising if we approach this from a narrow political perspective, but for anyone who knows anything about these societies and their commitment to and interest in sport, it is entirely logical. For the vast majority of people in Scotland, Northern Ireland, Wales and any of the English regions, this is the closest that they will ever get to having Olympic and Paralympic games on their doorstep, so of course they want them to come to the United Kingdom. Of course London is the only credible standard bearer for the United Kingdom, so let us all get behind it, from every corner of the United Kingdom.

The Scottish nationalists' approach is not only wrong in terms of generosity of spirit and recognition of what is best for the United Kingdom, but wrong for Scotland, and profoundly so. Scotland can, and I have no doubt will, get substantial benefits if the bid succeeds. Here, I want to move on to my more parochial, constituency point. Most attention concerning the possibility of locations around the country being used has tended to focus on football and using the best stadiums in the United Kingdom for that competition. Incidentally, I also welcome the prospect of a British team being in evidence there. Let us see how a British team compares with those in the rest of the world. There is nothing new about that concept, as has been suggested somewhere, because, historically, it was always a British football team that took part in the Olympics.

Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab)

Queen's Park.

Mr. Wilson

As my hon. Friend says, to all intents and purposes the team was Queen's Park with a couple of Corinthians thrown in to make up the numbers. As football was amateur, nobody thought it remarkable that a British team was involved. The idea of having a professional British team taking part in the modern Olympic context is very exciting. I hope that we see those games in Scotland as well as in other parts of the United Kingdom.

Football offers the obvious opportunity, but my constituency point involves sailing, as there is real potential to bring some events, and certainly a good share of the preparation, to the firth of Clyde. I want to put my remarks in an historical context, because there is nothing new about that idea. Indeed, at the last but one London Olympics—I emphasise that they were held in London—in 1908, when, fortunately, there was nobody putting out press releases with noble-minded headlines such as, "Scotland Faces? Olympian Rip-Off?", the sailing events were shared between Ryde on the Isle of Wight and the firth of Clyde. Obviously, the scale of the event and the infrastructure required have changed beyond recognition.

Mr. Adrian Sanders (Torbay) (LD)

I do not know whether the hon. Gentleman knows this, but in 1948 the yachting events were in Torquay, in my constituency.

Mr. Wilson

There is nothing against a tripartite split.

Mr. Sanders

But the events will be going to Weymouth.

Mr. Wilson

Perhaps the hon. Gentleman's constituency could have a run-off with the Isle of Wight and Weymouth.

The point is straightforward: the scale of the event has changed beyond recognition since 1908, or indeed 1948, but the firth of Clyde was used because it is one of the best sailing areas in the United Kingdom and Europe—and, some say, the world.

Pete Wishart

Perhaps the hon. Gentleman would like to read out my press release headline once again in case anybody in the Press Gallery missed it.

Mr. Wilson

I do not quite catch the wit and wisdom of that point. The only other line that I will quote from the hon. Gentleman's press release is this, said through gritted teeth: I am happy to support the Olympics going to London. I suspect that the truth is that he would be happy to support the Olympics going anywhere in the world except London, but that is the rather miserable political philosophy that he represents.

To return to the point about the firth of Clyde, although the scale of the event has changed, the area's quality as a sailing venue has not. I make no overblown claims or demands, but the firth of Clyde should be considered seriously to see whether it is still possible to hold events there. Largs in my constituency is a well-known centre for major international sailing events, and the Isle of Cumbrae is the Scottish Sports Council's chosen location for its water sports centre, so this possibility is real. Even if events are not held there, the strong possibility should exist of preparation being carried out there.

Let me point out to Members from throughout the country that this will not be a one-off "big bang" event in London. It will require long-term preparation, and an infrastructure allowing a couple of hundred teams from all over the world to make their own preparations. The arrangements must be of a high standard, and there is no reason why they should not be decentralised. I believe that when the Olympics were held in Australia much of the preparation took place in Queensland, and the distance between Queensland and Sydney is every bit as great as any distance that could be conceived of in the United Kingdom.

For all those reasons, this is very much a national undertaking. Although it is in the nature of the Olympics that bids are presented in the name of a city, every corner of the country can benefit—and "the country" includes the four nations of the United Kingdom. Let us all get involved, let us all benefit and let us all support the bid. I welcome the Bill.

4.10 pm

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

I have been involved with horses virtually all my life. They have given me a great deal of pleasure, a great deal of frustration and a sizeable dent in the wallet. As was mentioned by the hon. Member for Barnsley, East and Mexborough (Jeff Ennis)—I was about to call him my hon. Friend, but I do not want to damage his chances—I am also joint chairman of the all-party racing and bloodstock group.

I welcome the Bill. The Minister dealt with it in three parts and I shall do the same, but in reverse order. I regard backing for the Olympics as a legitimate use of lottery money. I may be a bit more interested in this than most Members, because Camelot is on the edge of my constituency and employs several hundred people, and the success of the lottery affects their employment prospects. The trouble is that in my view, the Government have not always used lottery money for the right purposes in the past: things that should have been funded by a central exchequer have been foisted on the lottery.

We all know that lottery, raffle and tombola ticket sales are enhanced if people think they support a good cause, and reduced if they think it is a bad cause. Unfortunately, in one or two instances people have thought the latter, the Dome being an example. When that happens, sales fall and Camelot gets the blame, although it is not Camelot's fault at all. I hope that people will consider backing for the Olympics to he a legitimate use of lottery money and will flood in, buy tickets and improve my constituents' employment prospects.

Let me make a specific point about the general subject of bureaucracy. Over the years, various lottery distribution groups have grown up. I am sorry to say that I feel they are hoop-builders. There are so many complicated forms to be filled in that a sub-industry of lottery application advisers has evolved. I therefore welcome what the Minister said about the development of a lean and mean bureaucracy. I only hope that that will rub off on the existing lottery money distributors.

As many Members have pointed out, we are taking the Bill very much on trust when it comes to the levy board and the Tote. I am pleased with the work that the levy board has done: I think that the improvements to race courses and the veterinary work have been marvellous, and must not be lost to racing. Many is the time that I have gone to a race meeting and stood on a concrete slab under a leaking corrugated iron roof, with the wind whistling around me, watching my horse come last again and telling myself that I am enjoying it when I am not. The levy board has behaved very responsibly in raising standards for all racegoers.

I have had ponies and horses for some 54 years, and I have attended one or two of the seminars run by the levy board. I now realise how little I know about racing and racehorses—but I do know why, all other things being equal, a second foal from a dam will probably be the best. If any Member would like to know the details, I am available for consultation.

However, I certainly understand why the Secretary of State wants to get shot—if I may use that phrase—of the levy. I agree with the Government's natural reluctance to remain involved in what is a commercial arrangement, so I welcome all the lovely words in clause 16, which effectively says that the Secretary of State can direct how such a transfer scheme might be operated. It states: The Secretary of State shall not make or approve a transfer scheme … unless satisfied that any property or rights to be transferred will be used for certain specific purposes. That is fine, but here I detect a little problem coming, as other Members have suggested. I can do no better than quote from the Racecourse Association, which might be thought to benefit from the administration of the Office of Fair Trading. It says: we have a number of concerns that arise from the current OFT inquiries into racing that have resulted in considerable uncertainty for the commercial future and governance of the industry. It continues: The Office of Fair Trading's decision to rule against collective selling threatens to undermine the commercial relationships that both the British Horseracing Board and the Racecourse Association have entered into with bookmakers. In examining the arrangements, the thought is that the levy board will be passed to a commercial operation, which will be administered and run by the British Horseracing Board. But if the BHB is to be hamstrung by rule 14, it will not have the money to continue to fund the levy. If so, racing will suffer, and none of us wants to see that. I am afraid that the problem originates from the ignorance of the OFT, which just does not understand.

The right hon. Member for Livingston (Mr. Cook) used the phrase "creative tension", and that is absolutely right. Racing is a series of strong elastic bands pulling in all sorts of directions, but those bands do create stability. Through its actions, the OFT is cutting one of them, and heaven knows where racing could go. The BHB's revenue source comes from the allocation of fixtures, and from data rights. If that is lost, the funding for racing will be put seriously at risk.

I am not going to discuss the value of racing to this country, which other Members have mentioned, but it certainly numbers among our top 10 industries. That indicates how important it is, and it must not be lost. I bear scars that were caused by the OFT back in the early 1990s, when it introduced its beer orders. For those who are devotees of Harvester, Chef and Brewer, Blubeckers and so on, that was marvellous. But those who, like me, welcomed the different styles and qualities of our public houses throughout the country regarded the beer orders as a disaster. I am desperately worried that exactly the same thing will happen if the OFT is allowed to lurch on.

It was stated in 1928 that the Tote was to be created in perpetuity. I have often wondered how long perpetuity was, and I now understand that, from the Government's point of view, the definition is 75 years.

Mr. Greenway

Plus seven.

Mr. Page

Indeed. I am not going to get too involved in how the money aspect should be calculated, but the Government have put no money in. They have given a de facto monopoly, which obviously has a value over the years. Equally, we must not forget that the Tote has given racing more than £100 million. Indeed, that was the very purpose of the Tote, and such money could be regarded as an effective rent over the years. As other Members have pointed out, there can be trade-offs, and the greater the cost of purchase, the less will be available for racing. We should remember that the entire object is to give money to racing.

I must congratulate the Minister on resisting the suggestion—I believe that it came from my favourite organisation, the OFT—of a proliferation of pool betting companies and the separate sale of Tote shops. I cannot go into that subject because of lack of time, but the suggestion shows a worrying lack of appreciation of the whole principle of Tote betting.

I am schizophrenic in these matters, as I have argued in many Standing Committees for privatisation and denationalisation. Now I am saying that we should nationalise something, but we all know that the Government intend to transform the Tote caterpillar into a state-owned chrysalis and then into the butterfly that will be the racing trust. I hope that the House is impressed by my metaphor, which I have only just thought of. Even so, that transformation is what we all want.

I shall not rehearse the arguments about what the Bill should contain in respect of licence fees and time periods, but there is no reason why the Minister should not come forward with the mechanism for the calculation of the Tote value while the Bill is proceeding through the House. After all, he has already been able to do a great deal of work on the licence period, so there is no reason why he should not also produce that mechanism, which would give a great deal of comfort to hon. Members. I trust the Minister, but he is a politician and I know that political life is not secure. I have confidence while the Minister is in post, but we all know how people in government get moved around. I sincerely hope that he will be able to deliver on all the promises that he has made.

I shall draw my remarks to a close by saying that we need to consider what will happen after the seven-year period. This Government were responsible for the dome for the year 2000, and then did not have a clue about what to do with it afterwards. I hope that the Minister will be able to say what will happen to Tote and pool betting at the end of the seven years.

I have made clear my natural concerns and reservations, but I welcome the Bill and congratulate the Minister on what he has achieved so far. I hope that the Bill successfully completes its Committee stage and becomes law as soon as possible

4.21 pm

Mr. John Grogan (Selby) (Lab)

I am delighted to contribute briefly to this debate, for three main reasons. First, there is a certain novelty value about being asked, as a Labour Back Bencher, to support a full-blown nationalisation measure, even though it is only temporary.

Secondly, Yorkshire is one of this country's great horse racing centres, with about 15 per cent. of the country's 59 courses situated there. The world's oldest horse race, the St. Leger, is held in Doncaster, and York—part of which I represent—is looking forward to welcoming Ascot in the north in 2005. The Tote has expanded turnover at all the nine courses in Yorkshire considerably in recent years.

Like many hon. Members who have contributed to the debate, I am an active punter. I tend to do my case work on a Saturday afternoon while watching the racing on television. I inherited my love of racing from my late father, who sadly died last year. I think that he would have been very proud of the last statement of his account at William Hill's, as it showed a profit of £3.33. After a lifetime's gambling, that is a considerable achievement.

Horse racing in Britain punches well above its weight. If one goes into a betting shop in Hong Kong, Singapore or Brussels, it is likely that one will end up watching racing from Wetherby, Sedgefield, Doncaster or somewhere else in Britain.

My third reason for wanting to make a brief contribution to this debate arises from the Bill's association with the Olympics and the establishment of the Olympic lottery fund. I was one of only two Yorkshire Members who belonged to the all-party Commonwealth games group a couple of years ago. The games held in Manchester were a great success, for the north of England and for the whole of the country. That success gave us the confidence to make a credible Olympic bid for the year 2012. The effects of the Commonwealth games were felt in my constituency of Selby, which twinned with the Cook Islands. Before the games started, a bowling match was held between teams from the Cook Islands and Selby. The event was won by Selby's finest, and will be remembered for many years.

I want to make four points about the Tote aspects of the Bill. First, the Tote has always had a dual purpose. We have heard a lot about funding, sponsorship and prize money in racing, and a good deal about providing a fair deal for punters. We need to think about the origins of the Tote. We have heard about the Racecourse Betting Act 1928, which, incidentally, was a private Member's Bill promoted by Major Glyn. Winston Churchill, as Chancellor of the Exchequer, replied to the debate. Much of the impetus was the determination to provide a fair deal for punters, and I hope that that will not be lost under the new set-up. Punters' interests must be represented on the racing trust.

It is worth briefly quoting Major Glyn's peroration in promoting the 1928 Bill. He referred to the saying that all men were equal on and under the turf. I quote him directly: We are not equal on or under the turf to-day, because the poor man is hunted and harried and pushed about if he tries to make a bet in the street, whereas the rich man, who has a banking account, has opportunities to bet on credit with starting price bookmakers in the big centres such as the poor man has not got. By the establishment of the totalisator your millionaire and your poor man out for a day's fun will back their fancy with the machine, and the machine, being inhuman, recognises nothing but cash and treats all men, rich and poor, alike, and pays out accordingly." —[Official Report, 16 March 1928; Vol. 214. c. 22851.] The instinct of those promoting the Bill was to ensure a fair deal, which is an important part of the heritage of the Tote.

My second point is to recognise the opposition of the bookmakers. That is nothing new. The betting industry was greatly opposed to the establishment of the Tote in 1928. Winston Churchill's reply was, basically, "Tough". Clearly it would create competition for the bookmakers of the day and, equally, today, selling the Tote to the racing industry reinforces such competition. However, the betting industry might be protesting too much. It has not had a bad deal in recent years. When the Bill was introduced in 1928, the betting duty had just been brought in. Now, of course, it has been abolished. There has been massive potential for expansion of the major bookmakers in recent years, and I believe that they should accept the overwhelming consensus that the Tote should go to the racing industry.

My third point about the sale of the Tote is that the racing industry faces a great challenge to get its act together. The Home Affairs Committee, to which several hon. Members have referred, published a report in 1991 that laid the groundwork for many of the measures in the Bill. The report stated: If, under the changes we propose, racing mismanages the Tote, it will bear the consequences of doing so … But our vision is not a gloomy one. We are confident that the racing industry, if united, will be able to create a modern organisation which will run the industry, own the Tote and negotiate with bookmakers an adequate and appropriate fee for racing's services. There is now no hiding place for the racing industry. Traditionally, politics in the House has been mild in comparison with the politics of the racing industry, which has seen many knives in the back over the decades. Recently. the industry has begun to get its act together, but that challenge still remains.

Fourthly, I agree with many hon. Members who have spoken and with the Home Affairs Committee in 1991 that there is a good case for pool betting being a monopoly. It has a monopoly in many other countries. I understand that in Australia the equivalent of our Tote has a complete monopoly, which I am not suggesting. If, however, we want to attract a large pool that is worthwhile and will attract bets, a good economic case can be made—in terms of public goods and so forth—for a Tote monopoly to continue. That may not be possible, but I believe that seven years is essential.

It will be worth discussing in Committee how the Tote will be valued and what should happen if the Office of Fair Trading and the racing industry do not reach an amicable agreement. Could the levy be extended beyond 2005 if we were at that stage in chaos?

My hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis) referred to the grant that currently comes from the levy board to assist the horses retraining fund. It is a small but important point that 300 horses are supported by that fund at the moment, and racing has a proud record—especially compared with the greyhound industry—in looking after animals when they retire. It is important that that continues.

Finally, I end with a word about the Olympic bid and the lottery fund, both of which I thoroughly support. Displacement is an issue and, as other hon. Members have suggested, the Government could provide tax concessions to make up for that. However, if we are to make a credible Olympic bid, the opportunity cost will fall somewhere. Funds for the preparation and implementation of the bid will have to come from somewhere. As someone from the north of England, I think that that is worthwhile. The knock-on effects on participation in sport, the country's profile, and the statement that we can do such things in the 21st century and not just in 1908 and 1948, would be so important.

I will be 50 in 2012 when, we hope, the Olympic games will be staged in London. People of my age could probably only hope for gold medals in shooting events, but for the two weeks of the games I would feel not 50 or even 40, but 21. That is how inspiring it would be to have the Olympic games in our country. I fully support the Olympic lottery fund and I broadly support the Bill.

4.31 pm

Pete Wishart (North Tayside) (SNP)

I shall confine my remarks exclusively to the part of the Bill that deals with the Olympic lottery fund, but I wish first to thank the hon. Member for Cunninghame, North (Mr. Wilson), who is unfortunately no longer in his place, for previewing my press release so significantly. I am sure that members of the press are already poring over every word after his thrilling preview.

I have no problem with London hosting the Olympic games. In fact, I hope that London secures the games for 2012. That would be great for London, but my problem is that I do not believe that the rest of the nation should pay such a significant part of the cost of the games. We certainly should not pay through our good causes and our charities, but that is exactly what will happen if the Bill becomes law.

Mr. Page

Does the hon. Gentleman agree that people have a choice about whether to buy an Olympic ticket? If they do not agree with the bid, they can buy an ordinary lottery ticket. His argument does not stand up.

Pete Wishart

The hon. Gentleman makes a good point, but I do not agree that people buy lottery tickets on the basis of the type of game. They buy tickets because they want to play the lottery. Money will be lost, as we have already heard from the Government, and an assessment of the amount has already been made.

If London wants the games, London should pay for the games. It is not as if London is short of a bob or two. It is the most prosperous city in Europe. It has more millionaires per square mile than anywhere else in Europe. In the City of London, it has the most dynamic and prosperous financial market outside New York, and it can more than afford to pay its way. In gross domestic product alone, it outstrips anything in the regions or nations of the UK. It even outstrips some of our allies in Europe. For example, the GDP of London is more than that of Austria, Sweden, Finland and Belgium. Nor is London short-changed in the public money that it already secures. For example, 80 per cent. of all public spending on transport is in London and the south-east. The cost of extending the Jubilee line was £3.5 billion and the overspend alone on that project was more than the spending on the transport infrastructure in the rest of the United Kingdom that year.

Mr. Love

The hon. Gentleman will be aware that London makes a net contribution to the rest of the United Kingdom of some £20 billion a year and it is proposed that Londoners should make a specific contribution to any successful Olympic bid through their council tax. Is he asking for even more?

Pete Wishart

The short answer is yes. As London is the most prosperous city in Europe, I maintain that it can more than afford to pay for the games. Londoners will pay, but London will accrue benefits from the games.

London's claim that it does not receive its fair share of public expenditure was knocked on the head by Professor Maclean of Oxford university, who found that Londoners received £5,177 per head, compared with £4,724 for people in Yorkshire, and that is only identifiable public expenditure. When we enter the realms of non-identifiable public expenditure—the amount spent on Departments, Whitehall, the BBC, the quangos and the headquarters of many large multinationals—London does very well. That money is unnoticed and unaccounted. Why should the rest of the UK pay for an Olympic games that London can more than afford to finance?

The proposal is based on the spurious assumption that the games will be good both for London and for the rest of the UK. I have no idea on what that assumption is based although I have no doubt whatever that the games will be very good for London and the south-east. However, it is debatable whether there will be benefits and advantages for the rest of the UK.

The Government have already commissioned the engineering consultants, Arup, to assess the benefits of the games for London. Arup concluded that the regeneration of east London would create 3,000 jobs. There would be a further £70 million benefit from the fiscal impact of growth in the local economy, and as much as £507 million extra could be generated from tourism for London.

I have seen no quantifiable study of the benefit of the London games to Scotland. Wales and the rest of the UK regions. So far in Scotland, all that has happened is that Barbara Cassani has been running around our chambers of commerce and attending business breakfasts telling us that the games will be good for Scotland, so we had better get our finger out or we will lose out. She made the spurious claim that Queensland did very well from the Sydney Olympics, yet she failed to mention that the other Australian states were extremely unhappy and lamented the loss of so much tourist traffic during the Sydney Olympics.

We are also given the sop that Scotland may host the football games if the Olympics are held in London. Well, whoopeedoo, Madam Deputy Speaker. Unless the Olympic football tournament changes into something remotely interesting between now and 2012, it will not be worth a hill of beans. A local derby in my constituency between the mighty Brechin and the mighty Forfar would be a bigger draw than Azerbaijan versus the Cayman Islands. We do not even have a United Kingdom football team, although I am pleased about that—a United Kingdom football team would be no good at all for us in Scotland. I can just imagine the UK team in their Union jack strips running on to the pitch at Celtic park. What a raucous response they would get.

The total funding package for the games is to be £2.375 billion; £875 million of that will be borne by London through a £20 increase in council tax and there will be a contribution of about £250 million from the London Development Agency. However, half that money will be paid by the rest of the nation, through our good causes and charities. True, London will pay extra council tax, but we shall pay through our good causes and that is an unacceptable way to pay for the London Olympic games.

It is estimated that Scotland will lose about £41.8 million of lottery funding for its good causes and charities. That will inevitably lead to long-term damage to Scotland's charity work. A small amount of money goes a long way in a small community, and a lot of good causes can benefit from £41 million. I do not know how the feel-good factor from the London Olympics will help charity work in Scotland.

Voluntary organisations in Scotland have expressed massive concern about what is being suggested. The Scottish Council of Voluntary Organisations stated: If the Olympics bid is successful, it will inevitably lead to the long-term damage of Scotland's charity work as lottery funds are diverted from good causes here to bankroll another 'Millennium Dome' type project there … SCVO has serious concerns that a new game would divert the already decreasing number of people playing the National Lottery away from the main game further reducing the funds available to 'good causes'. I hope that answers the point made by the hon. Member for South-West Hertfordshire (Mr. Page). There are huge concerns about the effects of a London Olympic bid on our good causes and charities.

In the past few months, we have learned that not only will we pay for the Olympic games through our good causes and charities but also that the UK taxpayer will have to underwrite the total cost—to any amount. We shall have to underwrite the games at any cost, even if it exceeds £2.375 billion.

In the DCMS response to the paper on the London Olympic bid, the Government said that, in the unlikely event of the games needing more than £2.375 billion, the extra burden should be shared between the Mayor of London, through the council tax precept, and the lottery fund. Now, all of a sudden, we find in an internal memorandum that was rushed through just before Christmas that the UK taxpayer will underwrite the total cost. When was that decision taken? Why has the underwriting of the Olympic games changed? The Minister owes us an explanation because, for example, the New South Wales government, not the Australian taxpayer, underwrote the Sydney Olympics. There is no obligation to make the national taxpayer pay for the games. According to the IOC rules, a city government could do so and London should therefore be the authority that underwrites the Olympic games.

The Government tell us that the cost is unlikelytexceed£2.375 billion. Iama Scottish Member—it mightsurprise hon. Members to learn that fact—and when the House decided that the Scottish Parliament would be assembled disastrously at the Holyrood site, we were told that the cost would not exceed £40 million. It is now £450 million. We also have the example of the disastrous millennium dome. The UK taxpayer is still paying for the mistakes of that massive white elephant that sits by the Thames. The simple fact is that our recent history on large infrastructure projects is not very good. Surely, if London gets the games and it all goes pear-shaped financially—there is a very good chance of that happening—the general taxpayer will, once again, have to bail out London.

I return, however, to the basic, central premise, which is that the games will be good for the whole UK. We are told, for example, that the games will boost sports at local and grass-roots level, but the simple and surely obvious fact is that, if the money is diverted from our grass-root projects supported by lottery funding into large infrastructure projects in London, those grass-roots project will inevitably suffer. I can see no other consequence.

In Scotland, we have massive health and lifestyle problems. Much of our population is obese and, unfortunately, many of our children are obese, yet for years we have been selling off community and school recreational facilities throughout our land to bolster our public finances. Money needs to be invested in our grass-roots projects, not in massive infrastructure projects in London. Our team sports are in decline. We have nothing in the way of youth academies. We do not invest in community sports facilities. Again, I maintain that, if money goes into the London Olympic bid, it will take money away from good causes and charities in Scotland and, once again, those Scottish charities will be damaged.

I conclude by saying that I hope that London is successful. I wish London all the best—[Interruption]. I mean that most sincerely. I really do hope that London secures the bid, but London is the most prosperous city in Europe. London can more than afford to pay for the games. If London wants the games, London should pay. Unfortunately, if the Bill suggests anything other than that, we will have to oppose it.

4.42 pm

Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab)

I will return to the contribution made by the hon. Member for North Tayside (Pete Wishart), but first, may I congratulate the Minister and the Department on securing legislative space to introduce these important proposals?

I want to address the Olympic games issue, but I should first mention the part of the Bill that relates to horse racing. Newcastle race course is in my constituency. I am not hugely knowledgeable about the horse racing industry, although I enjoy my visits to the course, especially for the Northumberland plate in late June. I am happy to know that my right hon. Friend the Member for Livingston (Mr. Cook) has been present there, but after his admission this afternoon that he is a net disinvestor, I shall be just a little bit more hesitant about accepting his tips.

I should declare some interests, although they are not registrable. I am a member of a number of sports clubs that are lottery recipients and possible lottery recipients. I am a member of Durham county cricket club, Falkland cricket club in Fife and Cambuslang Harriers in Glasgow. I am also a very active member of Elswick Harriers, in my constituency, in Newcastle. I am a strong advocate of sport, and I have strong views about sport. I do not believe that it is right to proselytise about sport, however. The approach needs to be gentle—if we start forcing our views down people's throats, they are less likely to listen to us. In that context, therefore, I am hesitant about over-emphasis.

Sport does many things for society, which we all recognise. It is hugely important in terms of health, which is a point that the hon. Member for North Tayside missed in his contribution. It is hugely important in bringing together communities, in terms of comradeship between individuals, and in terms of international links. The reason I am hesitant about mentioning the other aspect of enjoyment is that it might be difficult to try to explain to my constituents that it is enjoyable to stand in a huddle of Alf Tuppers on the top of some dale, in a reclaimed pit heap in County Durham, in wind and rain, half-covered in mud and half-covered in liniment. A number of iconoclastic enthusiasts such as me, however, do find that enjoyable. Much of sport is a little like that—it is all about the activism, which must generally be encouraged.

The hon. Member for North Tayside, who made a lamentable, pessimistic speech, displayed a lot of ignorance about sport—I say that as a Falkirk supporter who went to Brechin City about two years ago and got beaten, so I know a little about his territory, too. It is vital to try to enthuse people. I do not believe that the young girls in his constituency who might be 1500 m winners in the 2012 games do not find Paula Radcliffe an inspiration. That is absolutely key in sport. Sport is about a balance between the elite and the activists. That balance is crucial in allocating public expenditure, which we recognise. Not all Olympic sports, however, are associated with elitism. Many Olympic sports are very participative, and Members who are not interested in a particular sport would probably not know the name of one participant in them. Many Olympic sports, such as swimming, boxing, athletics, gymnastics, the horse events, the sailing events and others, develop elite talents, which is crucial in changing the attitudes of young people, making them more sports-conscious and more health-conscious.

As I said at the beginning of my remarks, I do not want to ram this message down people's throats, but we need an educational crusade in society to raise health standards and fitness standards. I am not asking everyone to stand up at the top of the reclaimed pit heap in County Durham. It would be nice, however, if people did a little activity and a little sport, in which the Olympic games are crucial in terms of providing inspiration.

The lottery has now become a crucial part of expenditure in my right hon. Friend's Department. Lottery funding is now a larger part of the funding in the Department than the funding that is raised by taxation, borrowing or other Government sources. Therefore anything that happens to lottery funding ultimately affects all funding. If lottery funding falls, that puts greater responsibilities on non-lottery funding, and if lottery funding improves there is less strain on the rest of the funding.

As was pointed out in one of the Opposition contributions, if we are to be successful in raising the lottery moneys, we must have a cause with which people associate themselves. If people around the country begin to think that this is a stitch-up to allow a few elite athletes and a few Londoners to have a good time, they are much less likely to support the lottery. That is why we must argue positively about the strong case for holding the Olympic games—I say that as a north-eastern Member of Parliament who did not support the Wembley development, as I thought that there were better solutions in the case of football.

I very much support the Olympic bid and the development of east London and the location of the facilities there. I also support part funding from the lottery, which is important. However, to carry public opinion with us, we have not only to make the case for sport and for the Olympics, but as hon. Members on both sides have said, we must make sure that we take care of the arguments about it all being for London. I do not believe that it all should be for London. I want some of the investment for the Olympic games to be spread around the country, and I know that we shall all make bids for the venues in our areas. It is important to make the argument for the national and regional distribution of resources.

It is also important, however, to counter the argument that the Olympics are all about giving money to the elite at the expense of those in the Elswick Harriers, the Falkland cricket club and so on. It is important that the funding for the hundreds and thousands of such organisations around the country continue in at least the proportions that they receive at the moment. If people begin to get the idea that the ordinary bowler on the bowling green in Lemington in my constituency is subsidising the bowlers who are trooping around the world for an Olympic games event, the wrong impression will be created. We must ensure that local investment continues.

This is not just a matter of public relations, although that is crucial. The people in every sport who, I hope, will take part in London in 2012 could now be 10, 11 or 12 years old. If we are to develop their talents so that they become good competitive athletes in 10 years' time, we must make the investment now. In fact, we must make the investment in local sports permanent if we are to achieve our joint ambitions of developing elites and encouraging everyone in the community to be more active.

Those who support the London bid must be vigorous in ensuring that the bid comes together and in making sure that all the arguments in favour of it are put forward. We must also dispel the reservations—some have been expressed in the debate—of those who are hesitant about the bid. The Bill plays an important contribution towards doing that, and I know that the Department has been vigorous in supporting the Olympic bid. It can be assured of any support that I can offer in the months and years ahead.

4.52 pm

Mr. David Rendel (Newbury) (LD)

I am delighted to have a chance to take part in the debate, not least because my constituency probably has the second greatest interest in the racing industry in the entire country. Because of our race course, gallops and many training stables, we are perhaps second only to Newmarket. I am also joint vice-chairman of the all-party committee on the issue. As a member of that committee, I took part in a delegation some time ago to ask the Minister to introduce legislation on the Tote. I am therefore delighted that it is being discussed on the Floor of the House today.

The all-party committee has always worked well and, indeed, I suspect that the whole industry has strong all-party support in the House. The only speech against the Bill was not from a member of the three main parties, and it had nothing to do with racing anyway. There is strong all-party support for what is happening and I am delighted that, on this issue at least, we can work together in the best interests of the people in the racing industry and those who enjoy the sport.

Given the strong support that there usually is in the Conservative party for the racing industry—I give it credit for that—it slightly surprised me that it came up recently with a set of principles that included one that stated that it did not believe that one person's poverty is caused by another's wealth". Anyone who knows anything about the relationship between the punter and the bookmaker knows that that principle does not always hold.

I had thought that my first speech in the House this year would be against a Government Bill. As a spokesman on higher education, I suspected that I would not necessarily be able to support all the Government Bills this Session, but it is nice that we can at least support this Bill, not least because, as other Members have said, the industry is doing very well. There is no question but that the number of people going racing is increasing and has increased over the past few years, which is welcome to those of us with a strong racing interest.

It is also true that the racing industry feels vulnerable for several reasons, many of which have been explained this afternoon. It is vulnerable because the situation in which it finds itself is somewhat volatile, especially owing to the questions of the future of the Tote and the betting levy, and what the replacement for the betting levy will be. Additionally, the rule 14 notice from the Office of Fair Trading—I and other hon. Members have made our objections to that known to the Government for some time—has caused considerable unrest in the industry because the future of its financing could be under threat. As the bookmakers appear to be those who are most strongly in favour of the rule 14 notice and its possible effects—if anyone is—they are in danger of killing the goose that lays the golden egg. As many people have said, from the bookmakers' point of view the egg is indeed pure gold. The bookmakers would be sensible to think twice about supporting the notice because their livelihood depends on a strong and vigorous racing industry, but that industry is under threat at present.

To be fair to the bookmakers, they also face a slightly uncertain future because of the question of how betting exchanges will affect the betting industry. That matter could make them feel under greater threat and perhaps more likely to support the effects of the rule 14 notice. However, that should make us all wary of bookmakers' pronouncements on the matter and of allowing the OFT to get away with its current position.

As many hon. Members have said, although the Bill's basic principles are correct, it is unfortunate that it lacks detail on how to overcome several of the dangers that hon. Members and I have outlined. I share the worries of the hon. Member for South-East Cambridgeshire (Mr. Paice) and my hon. Friend the Member for Bath (Mr. Foster) about what will happen when the exclusive licence ends in seven years. However, I shall concentrate on one of the problems by picking up a theme on which the hon. Member for South-West Hertfordshire (Mr. Page) was beginning to elaborate: what we can do straight away to try to clarify the price for which the Tote will he sold, and how that should be decided.

The Government are being perhaps a little feeble—I hope that the Minister will think fit to respond to that in his winding-up speech—by failing to include a statement in the Bill on the principles by which the price of the Tote and the proportion of that price payable by the racing trust will be decided. The racing industry would be given a lot of help and satisfaction if the principles behind the calculations were in the Bill. I do not understand why the Minister cannot negotiate with the racing trust straight away to decide those principles so that they could be added to the Bill in Committee. I hope that he will guarantee in his winding-up speech that he will negotiate with the trust on how the Tote should be valued and the proportion of the value that should be paid when it is sold to the trust, because it could, and should, be done straight away.

4.59 pm

Mrs. Jacqui Lait (Beckenham) (Con)

Long experience has shown me that whatever I regard as a racing certainty rapidly turns into a three-legged nag; indeed, the only time that I went to the grand national was the one time that the race did not start. I therefore feel no compunction in talking only about the Olympics. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) argued that, as someone involved in sport, he could not proselytise about it, and on the other side of the coin, as I am palpably not someone involved in sport, perhaps I can.

I have gone from being very sceptical about the Olympic bid, because of what I originally thought would be a significant lack of political will, to being an enthusiastic supporter. I can see absolutely no reason why the UK, and London in particular, should not host the Olympics in 2012. I thought that we saw a typically mean-minded display of nationalism from the hon. Member for North Tayside (Pete Wishart), who could not see the benefits that the Olympics would bring to Scotland. As someone who learned what little I know about sailing on the firth of Clyde, I believe that everybody should be practising their sailing there because they would then beat the pants off any competitor down at Weymouth.

There are, obviously, benefits for people throughout the UK from the Olympics, but what has not yet been truly appreciated are the opportunities for setting up training camps throughout the country. Regions, towns, cities, universities and sporting facilities of all sorts should get together and make a bid to the countries that want to compete and need to do three to six months' training before the Olympics take place. That is the most obvious way in which people throughout the country will feel a long-term benefit from the games.

I welcome and support the introduction of the lottery to help to finance the Olympics, and I support my Front-Bench colleagues in the suggestion that, if possible, the game should be introduced this summer on the back of the Athens Olympics, when enthusiasm can be built up. I recognise that there may be technicalities to sort out with the International Olympic Committee, but I am sure that we can get round those if the will is there.

As a London Member of Parliament, I think not only that we have to consider how the UK can benefit, but that Londoners need to feel that they own the Olympics. After all, they are the ones who will have a special, hypothecated council tax laid on them, ranging from £13.33 for somebody in band A to £40 for somebody in band H. Those are not inconsiderable sums, particularly as the new Labour Mayor of London is planning in the year after the Greater London assembly elections, which I sincerely hope he does not win, to impose on Londoners increases in his precept of 76 per cent., just to pay for the Greater London authority.

The problem is that people in many places in inner and outer London do not feel that they will benefit from the council tax increase; it is often seen as Ken Livingstone's project to regenerate the Lea valley. Exempting Crystal Palace, because I shall come on to that in a moment—

Mr. Caborn

Again?

Mrs. Lait

Again.

Exempting Crystal Palace, there are areas in outer London that can see absolutely no benefit to them from the Olympics, but they will have to deal with the extra traffic and people in the city.

The Secretary of State said that there should be benefits to all grassroots sporting facilities from the Olympics. I hope that the Minister can give us some indication of what will be the practical improvement in sporting facilities throughout London. We have to bear it in mind that if we assess a broad range of facilities in London, we find that there is not a high standard of provision.

That brings me, dare I say it, to Crystal Palace. Having had the opportunity of questioning the Minister about the future of that facility on Monday, I have to say that I came away more confused than when I started. There is an obvious confusion and a difficulty, which is the need to separate the running track from the sports building. I welcome the Minister's acknowledgement of the problem, as well as his commitment to put money into the running track so that grand prix events can take place this July, provided that decisions are made by the end of January.

There is confusion about the sports facilities at Crystal Palace. The Minister and other Members will know that Crystal Palace is the only site with a 50 m swimming pool. However, its sports facilities are also home to many elite athletes in various sports, including basketball, weightlifting, judo, karate and hockey. It is feared that in any transfer of the lease from Bromley council to the London Mayor—a project that I support—sports facilities will be closed before new facilities are provided. Some of the new facilities will have grassroots benefits, as they are community facilities, but there is also a need for top-level athletes to have training resources in the run-up to the 2012 Olympics. It is not clear whether the sports facilities will be closed before any new facilities are opened.

At the moment, the development of Crystal Palace appears to be funded, in one form or another, by public sector money, including, dare I say, national lottery money. However, there is a suggestion that there could be private sector involvement to deliver high quality sports facilities as part of a regeneration package for Crystal Palace. The Mayor of London supports that proposal, as he has talked about providing hotels at the top site. That is a controversial subject, but it is not impossible to put together a regeneration package that would provide high quality facilities at Crystal Palace and would retain its existing facilities. It is crucial, not just for people in the five boroughs around Crystal Palace but for all of south London, that the impact of the 2012 Olympics on their facilities is made clear as soon as possible. That will help them to feel involved in the developments and will allow them to understand the long-term legacy after 2012. The Olympics will generate excitement and interest, and I expect the games to be hugely successful in London and the rest of the UK. However, it is important that people grasp the legacy created by the increased council tax that they will have to pay.

5.7 pm

Mr. Laurence Robertson (Tewkesbury) (Con)

I do not have any interests in racing that have to be registered but, like many hon. Members, I have a long-standing love of the sport. Indeed, I have a serious constituency interest, as Prestbury Park race course at Cheltenham is in my constituency. I must correct the hon. Member for Newbury (Mr. Rendel)—Prestbury Park is the greatest race course in the world. The race course and the activities associated with it have a major knock-on effect throughout my constituency and, indeed, beyond, especially in mid-March when the Cheltenham festival is held. I also have a non-registerable but nevertheless close relationship with the Tote, which is partly a matter of friendship and partly a matter of holding a Tote credit account. Like other hon. Members, I am not very successful in my transactions. This morning, I spoke to a friend who asked me what I was doing today. I said, "I've got the Tote Bill", to which he replied, "How much is it this time?"

This is an important time for racing, as has been said, with the OFT investigation, to which I shall return in a minute; various changes that the British Horseracing Board is introducing in its racing review; the levy board changes; and the Bill, which I shall call the Tote Bill, although I accept that its provisions are much wider. However, I want to concentrate on the Tote.

It is important to remember the huge contribution that the Tote has made to the country generally and to racing in particular. It has sponsored the Cheltenham gold cup, which is probably—again, I am being parochial—the greatest steeplechase in the world. The Tote has, as we have heard, put millions of pounds into racing and given us many interesting betting products throughout its many shops. It has the placepot, a popular bet that allows people to win rather a lot of money for a small stake, although in my case it is usually a lot of stake for a little return. Nevertheless, people can bet without putting down a great deal of money. What is called the sport of kings benefits people at all levels, and the Tote is a major contributor to racing in that respect.

I pay tribute to the Tote staff, particularly the chairman, Peter Jones, and Roger Easterby, who is in close contact with many Members of Parliament to provide a great deal of information not only about the Bill, but about all the events in racing generally. Racing would not be the same without the contribution of the Tote, so it is extremely important that we get the Bill right.

This is a crucial time for racing. Given the importance of the Tote to racing, we must consider the details of the Bill. I welcome it and congratulate the Minister on introducing it. The Bill is long awaited. Many of us who were at the Tote annual general meeting quite a few years ago—I do not remember how many—heard the then Home Secretary, now the Secretary of State for Foreign and Commonwealth Affairs, the right hon. Member for Blackburn (Mr. Straw), announce that the status of the Tote would be changed.

As we have heard, there are one or two issues that concern us. The first is whom the Tote will be sold. There is no guarantee about that. What guarantee do we have that it will not just be sold to the highest bidder? What guarantee do we have that the Government's finances at that time, which are deteriorating, will not dictate that the Tote is sold to the highest bidder? We are expected to take it on good faith. The purpose of the Bill is not the nationalisation of the Tote, but to sell it on, yet the only thing certain about the Bill is the nationalisation of the Tote. I do not see why it cannot be written into the Bill that it will be sold to a racing trust.

Secondly, how much will the trust, if the Tote is sold to the trust, be charged for the Tote? The price will determine who buys it—not who wants to buy it, but who is able to buy it. How will that be decided? Who will decide it? I suppose the Minister and the Secretary of State will decide how much the trust will be charged for the Tote, but how will that be decided?

Mr. Page

Does my hon. Friend agree that it would give all members of the Committee so much more confidence if the Government were to announce, during the Committee stage, the mechanism for determining the purchase price for the Tote? That would enable us to proceed with the Bill with greater confidence.

Mr. Robertson

I am certain that the Minister will not decide to put that in the Bill and announce it today. The next stage will be the Committee stage, and it would give the members of the Committee and the whole racing world a great deal of confidence if he would tell us the mechanism for reaching the price, if not the price itself.

I stress that no Government have ever put a single penny into the Tote, and I am not saying they should. The Government cannot expect any receipts from the Tote. As has already been said, every penny the Government charge for the Tote will come out of racing. There is nowhere else that it can come from. So we will end up with a ridiculous situation where the Tote puts its profits into racing and the Government take those profits out. There is no other way of looking at it. It is as simple as that.

Part of the mechanism, I suppose, will be the exclusive licence. It is extremely important to the Tote and to racing. The national lottery has been a success most probably because of the large prizes that can be won—again, for very little money. That is how the pool operates, in so much as people can win quite a bit of money for a very little stake, as I have said. I do not think that the national lottery would be successful if it were broken down into any number of smaller lotteries, and not only the Tote but other bookmakers recognise that. I do not know whether it is widely understood—in this House it will be—but they can tap into the placepot bet, for example, which thus makes it less of a monopoly. The seven-year period seems to be accepted throughout the industry, but why is that not in the Bill? The length of the licence equals the value of the Tote business, which equals the price, and all that equals who owns it in the end.

I want to say a word or two about the levy board, not because I want to get involved in the detail of the winding up of the levy and not necessarily replacing it, but having welcomed the Bill, the timing is rather uncertain, given the OFT's investigation. I am sure that I would not be allowed to proceed too far down the road of discussing the OFT's investigation, especially as I have held an Adjournment debate in the House to discuss that, but this is an uncertain time for the racing industry and the OFT's timing is rather bad in so much as the industry is trying to improve itself. As I have already mentioned, the British Horseracing Board already has its racing review—a root and branch look at racing. It accepts that improvements have to be made.

To repeat what I said in an intervention, it would be rather curious for the Government to give up control of horseracing, as they should, only for that control effectively to pass to an unelected, unapproachable quango, with no interest in racing, no responsibility to racing and, it seems, no accountability to anbody. The Minister, again to give him his credit, in a written reply to me has said that he has great concerns about what the OFT might come up with. The Minister for Employment Relations, Competition and Consumers has said the same. So Parliament does not seem to have any control over the OFT, Ministers do not seem to have any control over the OFT, racing certainly does not, and we cannot even raise the issue with any great success in this House

Therefore, we must be extremely careful about what we do to racing. We could get it right and we could get it wrong. The Government are understandably changing the levy system and we could also lose money from racing because of the OFT. If the Government charge too much for the Tote, money will come out of racing in a third way. Together, all that would have a devastating effect. It does not need to be that way. We could look at the matter positively, and that is the way that I would prefer to look at it.

When the Minister replies, I hope that he will address the points that not only I have made but that many other hon. Members have made. However, in general terms I welcome the Bill and I wish it well.

5.18 pm

Mr. Andrew Rosindell (Romford) (Con)

Thank you, Mr. Deputy Speaker, for allowing me the opportunity to contribute to the debate. Contained within the Bill are essentially three substantive proposals: to privatise the Tote, to abolish the levy board and to create an Olympic lottery. All three elements are extremely important to the future of gaming and sports in Britain.

I wish to focus my remarks on the issue of the Olympic lottery. The reason for that is simple. The proposal to host the 2012 Olympics in London is an important part of the future development of Greater London, including my constituency of Romford. Of course, with that we must couple the fact that in 2012 we will be celebrating the diamond jubilee of Her Majesty the Queen, so I am sure that all hon. Members will look forward to that year as being a great national celebration, both in celebrating the Queen's 60th anniversary on the throne, but also the London Olympics. I sincerely hope that through tourism, regeneration and investment, Romford, the rest of London and the south-east, and the rest of the country can truly benefit from the Olympic games, should our bid prove successful. It is therefore essential that every element of the bid, including the associated lottery, should be carefully examined before being implemented.

The main body of my speech will concentrate on the Olympic lottery, but I would also like to make a few brief points about the Tote and the levy board. Since 1929, the Tote has formed the backbone of horse racing in this country, not only by providing a forum for those who wish to bet but by raising much needed resources to support the industry. At the crux of the debate on whether to privatise the Tote lies an incredibly simple question. It is the same question that was posed throughout the great reforming era of the 1980s: what is so special about this activity that it needs to be controlled by government? I would suggest that, while we all value the work of the Tote, there is nothing in its remit that could not be achieved in the private sector. After all, there are numerous reputable bookmakers in the private sector.

I fully accept that pool betting is distinct from fixed-odds betting, but their regulatory needs are not dissimilar. Indeed, senior officials at the Tote have argued that they are disadvantaged by being outside the private sector because they are unable to make "independent commercial decisions". In some senses, this could be compared to the situation faced by some of our old public monopolies, most of which are now flourishing in the private sector.

Fundamentally, the proposal to sell the Tote is a good one, although I am concerned that the Government have not put a sale price into the Bill. Many other hon. Members have also made that point. I cannot believe that it is wise to remain ambiguous about that, when we are talking about something as significant as the future of racing and the Tote. Concern has also been expressed about the lack of any real assurance that the proposed sale will be to a racing trust consisting of groups from the racing industry. We have heard the aspiration; now we need the guarantee. I repeat that it is potentially deeply damaging to the racing community to allow this proposal to remain so ambiguous. The Government have a duty to the racing industry to clarify those two points, and I sincerely hope that they will do so.

The proposed abolition of the levy board suffers from similar problems. Yes, it is right that the changes should be made, but we must remove the ambiguities. Thousands of racehorses rely on the money raised by the board for veterinary costs and care after they retire, for example. It is vital that the Government end the uncertainty and give a guarantee that welfare funding for horses will not be cut. Self-regulation must not become a free-for-all.

Turning to the Olympic lottery, it concerns me that the Olympic bid will rely to a great extent on the lottery, not because I oppose the idea in principle, but because of the way in which this Government have tarnished the idea of lotteries in general, and our national lottery in particular. It is a widely known fact that the national lottery is falling in popularity and that this has had a serious knock-on effect on the sums raised for good causes. Most people have become disillusioned by the fact that the Government have allowed lottery money to be allocated without regard to the needs of so many real people. A number of very worthy groups have been turned down for funding, only to learn that money has instead been handed to organisations that appear to lack any relevance to the vast majority of British people.

I hope that by supporting the Olympics we can restore the public's confidence that the money raised for good causes through the lottery is no longer likely to be squandered. If we cannot, the proposal will simply mean, once again, that more and more good causes are competing for smaller and smaller sums. More worryingly still, it will leave a huge budgetary hole that this Government will almost certainly not hesitate to fill with yet another tax hike for hard-working families in my constituency and elsewhere. If the Government do not do that, as my hon. Friend the Member for Beckenham (Mrs. Lait) has already pointed out, the Labour Mayor of London will not hesitate to use his power to raise extra revenue that can fill any deficit that might occur.

Again, I issue a warning to the Government: if they do not take action to improve the image of the lottery by making it more relevant to more people, its decline will jeopardise first-rate projects such as the proposed 2012 London Olympics. If we are to have an Olympic lottery game, I firmly believe that we need to launch it when the Olympics are in the national spotlight. What better time than during this summer's Olympic games in Athens? All British people will be inspired to support our British sporting endeavours.

The problem is, of course, that the International Olympic Committee has said that no scratchcards should be produced and no lottery fund raisers should take place until it has announced which city will host the 2012 Olympic games. That announcement is scheduled for July next year—long after the interest in Athens will have faded. On the face of it, that seems to be an insurmountable problem. We will miss a great opportunity if we fail to capitalise on the Athens Olympics, but even if we want to proceed, it seems that the IOC will not permit it.

I believe that a compromise could and should be made. We should go ahead and launch the Olympic lottery game at the start of Athens 2004. That money would not be ring-fenced for the 2012 bid. Rather, it would be raised to support the development of athletes whom we hope will compete in the games wherever they are held. I also fully endorse the proposal made by my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice), who suggested that money could be used for disabled athletes. That would be an excellent solution to the problem that we face.

Under that proposal, sports would benefit either way. If we got the Olympics, we would have more resources; if we did not get them, we would have injected a large amount of money into developing our sportsmen and sportswomen. That would no doubt pay dividends in future sporting competitions.

The Bill is worth the cross-party support that it is being given, but that is not to say that the Government are getting things completely right. We must have fears regarding the uncertainty over the Tote and the lack of clarity over the levy board. Of course, it also seems that we will miss the best opportunity to launch our Olympic lottery. I urge the Minister, and Her Majesty's Government, to consider those important points of concern before the Bill is dealt with in Committee.

5.28 pm

Mr. Adrian Sanders (Torbay) (LD)

I rise to support both parts of the Bill. I will talk a little about the Olympics in a moment, but first I want to deal with the Tote. I have one key question. Although I support the Bill, I am not entirely sure why. We know that the Tote is a non-departmental body. It is not owned by anybody. It has an exclusive right to offer pool betting on horse racing. We know that it was founded in 1928 and that the Government intend to sell it to a racing trust with an exclusive licence to run pool betting for seven years.

We also know from the briefing on the Bill that since the Tote's foundation, there have been numerous proposals to reform it. Many of those are laid out in the substantive document that deals with its history. Nowhere in the document, however, and nowhere in any Government statement issued so far, has anyone said why we are first nationalising and then privatising the Tote. The Government have not made their case. We need to know why we are making such a substantial change to a body whose history shows that it has been a success, in terms of the ethos that established it and in terms of the money it has generated, and continues to generate, for the racing industry.

In 1991 a Home Affairs Committee report on gambling concluded that horse race pool betting was an area in which monopoly might be in the consumer's interest. There were obvious reasons for its conclusion. As the hon. Member for Selby (Mr. Grogan) pointed out, several pools mean lower jackpots and hence a lower incentive; and that will have a knock-on impact on the overall amount that can be made from one pool. In November 2003, the Minister said: We have concluded that it will be in the public interest to open up the pool betting market to effective competition, but that a reasonable preparatory period is necessary in order to safeguard the policy aims underlying the sale."—[Official Report, 27 November 2003; Vol. 415, c. 18WS.] What are the policy aims underlying the sale, other than the fact that the Government can make some money out of it? Is it just about raising revenue? No case has been made in terms of how it will improve the Tote and the service to the customer, certainly after the seven years of exclusivity.

As for the end of those seven years and the break-up of the pool, there will be a number of knock-on effects. There is no doubt that the bigger race courses will benefit, in terms of the volume of races and of turnover, but smaller courses—such as two in my area, Newton Abbot and Haldon Exeter—could lose revenue as a consequence of losing a single pooled Tote.

Mr. David Heath (Somerton and Frome) (LD)

Does my hon. Friend agree that the lifeblood of racing, what makes the whole industry tick, is not the glamorous courses or the glamorous meetings, not Royal Ascot or glorious Goodwood, but the smaller courses that provide National Hunt racing day in, day out, and week in, week out? I am thinking of courses such as Wincanton—and, indeed, courses in my hon. Friend's constituency.

Mr. Sanders

I could not possibly disagree with that. Some of the smaller courses are part of the attraction of the whole sport. This is not like premiership football. Some of us live hundreds of miles from the nearest premiership club, but we can all participate in horse racing on August bank holidays or on Boxing Day, because there is bound to be a meeting somewhere near where we live. I am not convinced that after the seven-year period consumers' interests will still be served, and I want the Government to make a case.

I have three big fears about this element of the Bill. First, under European competition law, I cannot see how the Minister can guarantee a sale to a racing trust. I want to know how the Government can do that without any mention of the prospective purchaser in the Bill. Secondly, what is to prevent a purchaser from ending the exclusivity within seven years, if that is not specified in the Bill? Thirdly, if a seven-year licence is enforceable and desirable, why is that no longer desirable after seven years?

As for the Olympics, the hon. Member for Cunninghame, North (Mr. Wilson) discussed his bid for yachting events to take place on the firth of Clyde, but unfortunately for him, they will be taking place in Weymouth. The Royal Yachting Association has a major investment in an international sailing school in Weymouth, and has decreed that it wants those events to take place there. That has upset some of my constituents, because in 1948, the Olympic yachting events took place in Torbay, and the yachts were based at Torquay. However, we support the Weymouth bid because it is possible that we could benefit from it.

All areas need to consider that there are ways of benefiting from the Olympic games, even if they are not the venues for a particular sport. One example is the training of the Olympic teams. The teams will come over here some months in advance of the games, in order to acclimatise themselves and to train. There needs to be a mechanism—I am not sure that the Government have yet established one—to help areas that are bidding to act as training camps for particular sports. Indeed, an entire national team may want to site itself in a particular area or at a particular venue. We need to ensure that there is a spin-off in that regard. Of course, resources will need to be made available in advance, to ensure that the facilities available for those teams and sportsmen and women are first-rate and up to an Olympic standard, even if they are not on the scale of, say, an Olympic-size swimming pool or stadium. We must at least ensure that top-rate facilities are available for them. I hope that the Government will consider that issue.

From my constituency's point of view, we would have loved to host the yachting. Given that our climate is one of the mildest in the country, perhaps we could bid for the beach volleyball. That could work very well when the tide is out, but not so well when it is in; having holidayed in my patch, the Minister will know what I mean. I hope that all parts of the country will be able to feel that they are part of the games—that they will be not just London games, but United Kingdom games—and that the benefits will be felt throughout the country. I hope that the Minister can respond to the specific questions that I have asked, and I look forward to returning to some of these issues if I am appointed to the Committee.

5.37 pm

Mr. Andrew Love (Edmonton) (Lab/Co-op)

It was not originally my intention to speak in this debate, but given the Minister's suggestion that I should expand on what I said in an earlier intervention, I thought this an ideal opportunity to do so. [Interruption.] I have only a couple of minutes, so I ask Members to keep interventions to a minimum.

I am the Member for the Picketts Lock area, and having gone through this process, I feel that we face an uphill struggle to win the Olympic bid. We have to have a unique selling point for our bid, which should be that this should genuinely be a people's Olympic games. What do we mean by that? It is a challenging concept, because we have to make it a reality, rather than simply an illusion. A people's games would be a partnership with the people of this country. It would involve their active participation, and there should indeed be a democratic element to that.

I wrote to the Minister and Ken Livingstone about this issue, saying that there should have been open membership of the bid company to allow individuals to get involved. However, we have now passed that stage, and we need to adapt. But such involvement would allow not only individuals, but communities such as the lower Lea valley, regions such as Greater London and others, and nations such as Scotland and Wales to have a very direct influence on, and say in, what happens. That collective voice, in the context of a mutual structure for the bid company, would make the difference for this country. Elected representatives would he able to represent Scotland, Wales or Greater London directly. Indeed, I suggest that London would need more representation than other parts of the country, simply because there can be no taxation without representation. The bid company would have to recognise that.

Representation is important for a number of reasons. First, we must mobilise this country's energy and enthusiasm for sport that many hon. Members have noted. In addition, it is commonly assumed that the experts in the field will be the members of the bid company, but the real experts exist out there, in the country. Londoners are greater experts on London than anyone else, and in the same way Scottish people are greater experts on Scotland than anyone else. That is why ordinary people should be represented.

Most importantly, we need participation. When Sydney made its Olympic bid, it was able to call on 40,000 volunteers. Does any hon. Member have confidence that Britain could produce 40,000 volunteers? We need to produce 50,000 volunteers, and my idea of a people's Olympics with a mutual structure would help us to achieve that. I commend it to the House.

5.40 pm

Mr. Nick Hawkins (Surrey Heath) (Con)

Like other hon. Members, I want to begin by declaring not so much my financial interests, but my various enthusiasms and links. They may not produce income, but they are of both a personal and a constituency nature.

I am a long-standing supporter of racing. I have enjoyed many good days at the course, and am an active member of the all-party racing and bloodstock committee. I do not have the detailed knowledge of racing exhibited by my hon. Friends the Members for South-East Cambridgeshire (Mr. Paice), for South-West Hertfordshire (Mr. Page), and for Tewkesbury (Mr. Robertson), but my family has been heavily involved in the sport. My late grandfather, my father's father, spent much of his spare time involved in racing, in various capacities. A number of my farming uncles and cousins on my mother's side of the family have also been involved in racing: one of my uncles was the owner of a horse that won The Daily Telegraph point-to-point championship in the late 1980s.

I am also a passionate supporter of the bid to hold the Olympic games in the UK. As the House knows, before I took on my present responsibilities, for a number of years I was deputy chairman of the all-party sports committee. I believe that the 2012 bid represents our best chance yet to hold the Olympic games in the UK. I strongly supported the previous Olympic bids, and I was a very strong supporter of the Manchester Commonwealth games.

That brings me to a constituency link. Several hon. Members have spoken about the Olympic side of the Bill, and have said that their constituencies could provide training and practice facilities for competitors. However, the national shooting centre at Bisley is in my constituency. If, as we hope, the 2012 bid proves successful, the current state of legislation means that Bisley is the only place where the Olympic shooting competition could be held. For the same reason, there was no alternative venue for the Commonwealth Games shooting competition, even though those games were held in Manchester. That reinforces the point made by several hon. Members that the Olympics could benefit the whole country.

The National Rifle Association ranges at Bisley straddle the boundary between my constituency and that of my hon. Friend the Member for Woking (Mr. Malins), and I was privileged to be asked to present one of the medals in the Commonwealth games shooting competition. I look forward to the Olympic shooting competition coming to Bisley in 2012, as happened in 1948.

As my hon. Friend the Member for South-East Cambridgeshire said, we want to improve the Bill. It has received a broad welcome from all parts of the House, but certain gaps remain. We want to fill in those gaps when we consider the Bill in Standing Committee.

It is regrettable that the Bill's provisions in respect of the Olympic games make far too little reference to the involvement of the private sector. The stage was set for the revision of finances in the modern Olympic movement when Peter Ueberroth and his team made their successful bid for the 1984 Los Angeles games. That bid made extensive use of the private sector, but one of the snags with the Government's planning is that they see the Olympic bid as very much a public sector operation. Given that the potential Olympic sites in the lower Lea valley are so close to the City of London, there is a massive opportunity for increased use of the private sector. We will want to support what Barbara Cassani and her team are doing. I am sure that when the Minister winds up the debate, he will, on reflection, agree with us that there could be a greater role than has so far been revealed for the private sector.

Conservative Members strongly believe that the new lottery game has to start to coincide with this year's Athens Olympics, when interest in the Olympic games will be at its height. As my hon. Friend the Member for Romford (Mr. Rosindell) said, there must be a way round the difficulties over International Olympic Committee rules. As my hon. Friend the Member for South-East Cambridgeshire suggested, we have an opportunity to start an Olympic lottery game this year to coincide with the Athens games. The funding, however, should not be linked only to the bid itself: the beneficiaries could be Paralympic athletes or sporting competitors in general. That is surely acceptable, even within IOC rules.

The second major improvement that Conservative Members want to press for in Committee—and it seems to us an acid test of the Government's real commitment to the Olympic bid—is for the Government to forgo what would otherwise be the tax take from the Olympic lottery game. The moneys that would otherwise go to Her Majesty's Treasury should be hypothecated and go directly to help the success of our Olympic bid. If the Olympic lottery game were introduced on that basis, we would then know that the Government were committed in every way to the bid's success.

As my hon. Friend the Member for Beckenham (Mrs. Lait) and Labour Members such as the hon. Members for Cunninghame, North (Mr. Wilson) and for Newcastle upon Tyne, North (Mr. Henderson) said, the Olympic bid must be seen to represent the whole of the UK. It is not just about the regeneration of east London with the Olympics as an excuse, which is how the newly admitted Labour Mayor of London seems to view it.

As many hon. Members have said, we have a great opportunity to establish training camps in different towns and cities throughout the UK. As the hon. Member for Torbay (Mr. Sanders) said, there may be opportunities for sailing practice in Torbay or the firth of Clyde even if the final sailing events take place in Weymouth. For other Olympic sports such as rowing, training camps could be established all over the country. I have already mentioned my constituency interest in shooting.

The all-party group on the Olympics, of which I am proud to be a member, has visited some of the potential sites in the lower Lea valley. We want to ensure that the whole of London benefits from the opportunity to support the Olympics. Fully germane to that issue are the points about Crystal Palace made by my hon. Friend the Member for Beckenham. Not just east London, but the whole of south London, north London and west London must be seen to benefit from the whole process.

As to the Tote and the horse race betting levy, we believe that it is crucial for the Bill to make it clear that the Tote should be sold to a racing trust. The whole point of setting up a shadow trust to be run by Lord Lipsey is to bring about certainty on the part of the racing industry. It is not acceptable for the Minister to say that it is not needed on the face of the Bill. The gap must be filled.

We should recognise that the Minister has worked hard. I pay tribute to him, as have other hon. Members, for securing the seven-year exclusivity, but some hon. Members have expressed the concern that even seven years may not be long enough. Several hon. Members supported the view of my hon. Friend the Member for South-East Cambridgeshire that the bigger the pool, the more attractive is the Tote to the punter. My hon. Friends the Members for Ryedale (Mr. Greenway) and for South-West Hertfordshire might say that it would be better if the exclusivity carried on much longer than seven years. As many hon. Members have said, seven years is really the minimum.

My hon. Friend the Member for South-East Cambridgeshire drew attention to the fact that one of the big bookmakers has already stated that at the end of the seven years—if it is to be only seven years—it would bid for the Tote. That would clearly reduce competition. The right hon. Member for Livingston (Mr. Cook) referred to creative tension in the racing industry. I pay tribute to him and other hon. Members who have played an important part in promoting the cause of racing in the House.

There is a need to support the smaller rural race courses especially, as was mentioned by several hon. Members. A huge threat also hangs over racing from the OFT. It is a great shame that that organisation seems to seek out high-profile sporting cases to try to boost its reputation, without appreciating the damage that could be done to such an important industry. The right hon. Member for Livingston made the point that racing is a huge employer. It employs 100,000 people and is in the top 10 of employers in the country.

We want the Bill to support racing further, protect the position of the Tote and genuinely assist Britain's success in the 2012 Olympic bid. We support the Bill and we will seek to achieve those aims in Committee.

5.50 pm

Mr. Caborn

With the leave of the House, I wish to reply to this excellent debate. Some 16 or 17 Members have been able to contribute, and the quality of the speeches was very high. I do not have time to respond to all the points that were made, so I shall address one or two major areas to provide some reassurances. The other issues can be taken up in Committee.

On the question of the levy system, we had identified September 2005 as the most likely date for abolition. That would have meant that there would be one more levy, for 2004–05, followed by a six-month period for the levy board to achieve an orderly closure. It is the Government's intention to end the levy system, but because of the uncertainties that have been outlined this afternoon by several hon. Members—and that are still felt by the racing industry—about the deliberations of the OFT, we have decided to extend the life of the levy board to September 2006. We have listened to and taken note of what people have said.

The concerns of the House about the OFT and its relationship with racing were also raised at Question Time on Monday. My right hon. Friend the Secretary of State has been in correspondence with the OFT, although unfortunately I cannot disclose the details—

Mr. Don Foster

Why not?

Mr. Caborn

I am informed by officials that that is how it has been done in the past. [Interruption.] That is all the answer that the hon. Gentleman will get, so let us not waste time. I have written to the racing industry to ask for a meeting to discuss the issue. A solution is possible, and the OFT has not been as intransigent as some believe. It is important to find a solution so that we can bring some certainty back to the industry.

Hon. Members asked about the sale of the Tote. We set up the shadow trust to answer those questions, and it has had a dialogue with the Treasury. The Tote will be sold in the normal way for an asset of the Government. An independent review will be held and a price set. If we fail to set a fair price for the Tote, we will run into various difficulties. For example, the bookmakers will complain to Europe about state aid and unfair subsidies that could distort the marketplace. When the Bill becomes law—and it has had a fair wind from the House today—we will be able to negotiate a price that reflects the worth of the Tote, with the assistance of the work of the shadow trust. That can be done, as it has been done for the sale of many other Government assets.

The period of seven years reflects the balance that we have, rightly, achieved through discussions with the shadow trust, the Tote and their advisers. They believe that they can raise the purchase price and provide a sustainable business plan to take the organisation into the marketplace, without fearing the competition, in seven years' time. Some Members, including my right hon. Friend the Member for Livingston (Mr. Cook), have argued that the period should be 10 or 15 years; indeed, some people have argued that we should leave the Tote in the public sector as a monopoly. However, that could be a disservice. If the Tote proved, after seven years, that it could not operate in the marketplace so that it could see off all the predators that might want it, it would not have done its job. We have struck a balance; we took advice and took account of the views of the industry. That is why we argued for seven years and that is the course the Government intend to adopt.

Whether or not such points are included in the Bill, it is clear that there is not much trust of the Government in the House. That surprises me, as my right hon. Friend the Secretary of State has worked so hard on the seven-year proposal. After the discussions that we have held both with the shadow trust and the Tote, it would be naïve to say that we do not want to proceed in that way. Nevertheless, I can understand, to some extent, why hon. Members have made some of their comments. We shall set up discussions and negotiations about the price with the shadow trust when the Act is on the statute book.

On the 50 per cent. figure, the Government believe that there are two legitimate stakeholders in the Tote: the racing industry and the taxpayer. It is as simple as that. We intend to sell the Tote to the racing trust; it was a manifesto commitment and we want to honour it.

I shall deal with some of the points that were made about the Olympic games. I thank the hon. Member for North Tayside (Pete Wishart) for his timely contribution. We took account of the views of people throughout the United Kingdom before we made the decision to go ahead with our bid for the games. As has already been indicated, about 81 per cent. of people in Scotland—one of the highest returns—supported the bid.

The hon. Gentleman concluded his remarks by saying that his contribution was actually in support of the London bid. My strong advice to him is to keep his mouth shut for the next 18 months and he will do us a tremendous amount of good—[Interruption.] He would be doing us a favour.

Hon. Members asked what the cost would be and suggested that there would be a displacement from the good causes. I can confirm the 5 per cent. figure that we told the House. On the question of when the new game will start, assuming that the Bill is enacted, a number of hon. Members alluded to the fact that the IOC rules say very clearly indeed that such a lottery cannot begin until after the winning candidate has been confirmed, and I would not dispute that.

Hon. Members have rightly argued about the displacement from other good causes. That is another important point. Broadly speaking, we have agreed with the other good causes that it is right, in the national interest, to use the lottery for the Olympics, but they say, with some justification, that they would not want the new lottery to take place until the arrangements have been confirmed at Singapore in July 2005, when I hope that we will win the bid for 2012. So we have to take that on board as well. Again, there has to be a balance, and the good causes have played ball with us very much indeed.

On the betting levy, we have produced all our costings with a 12 per cent. levy for the Olympic draw—

Question put, That the Bill be now read a second time:—

The House divided: Ayes 348, Noes 5.

Division No. 24]	[5.59 pm
AYES
Abbott, Ms Diane	Challen, Colin
Adams, Irene (Paisley N)	Chapman, Ben (Wirral S)
Ainger, Nick	Chope, Christopher
Ainsworth, Bob (Cov?try NE)	Clapham, Michael
Ainsworth, Peter (E Surrey)	Clark, Mrs Helen (Peterborough)
Alexander, Douglas	Clark, Dr. Lynda (Edinburgh Pentlands)
Allen, Graham
Amess, David	Clarke, rh Tom (Coatbridge & Chryston)
Anderson, rh Donald (Swansea E)
Arbuthton, rh James	Clarke, Tony (Northampton S)
Atkins, Charlotte	Clifton-Brown, Geoffrey
Atkinson, Peter (Hexham)	Coaker, Vernon
Austin, John	Coffey, Ms Ann
Bacon, Richard	Cohen, Harry
Bailey, Adrian	Coleman, Iain
Barker, Gregory	Colman, Tony
Barnes, Harry	Connarty, Michael
Barron, rh Kevin	Conway, Derek
Battle, John	Cook, rh Robin (Livingston)
Bayley, Hugh	Cooper, Yvette
Beard, Nigel	Corbyn, Jeremy
Beckett, rh Margaret	Cranston, Ross
Begg, Miss Anne	Crausby, David
Bellingham, Henry	Cruddas, Jon
Benn, rh Hilary	Cryer, John (Hornchurch)
Bercow, John	Cunningham, rh Dr. Jack (Copeland)
Berry, Roger
Betts, Clive	Cunningham, Jim (Coventry S)
Blackman, Liz	Curtis-Thomas, Mrs Claire
Blizzard, Bob	Davey, Valerie (Bristol W)
Blunt, Crispin	David, Wayne
Boateng, rh Paul	Davidson, Ian
Boswell, Tim	Davies, Geraint (Croydon C)
Bradley, Peter (The Wrekin)	Davies, Quentin (Grantham & Stamford)
Bradshaw, Ben
Brennan, Kevin	Davis, rh David (Haltemprice & Howden)
Brooke, Mrs Annette L.
Brown, rh Nicholas (Newcastle E Wallsend)	Davis, rh Terry (B ham Hodge H)
	Dean, Mrs Janet
Browne, Desmond	Dhanda, Parmjit
Bryant, Chris	Dismore, Andrew
Buck, Ms Karen	Djanogly, Jonathan
Burgon, Colin	Dobbin, Jim (Heywood)
Burnham, Andy	Dobson, rh Frank
Burnside, David	Doran, Frank
Burstow, Paul	Dowd, Jim (Lewisham W)
Butterfill, John	Duncan, Alan (Rutland)
Byers, rh Stephen	Edwards, Huw
Caborn, rh Richard	Efford, Clive
Cairns, David	Ellman, Mrs Louise
Calton, Mrs Patsy	Ennis, Jeff (Barnsley E)
Campbell, Mrs Anne (C'bridge)	Evans, Nigel
Campbell, rh Menzies (NE Fife)	Fallon, Michael
Casale, Roger	Field, Mark (Cities of London & Westminster)
Caton, Martin
Cawsey, Ian (Brigg)	Fisher, Mark

Fitzpatrick, Jim	Khabra, Piara S.
Flight, Howard	Kidney, David
Flint, Caroline	Kilfoyle, Peter
Foster, rh Derek	King, Andy (Rugby)
Foster, Don (Bath)	King, Ms Oona
Foster, Michael (Worcester)
Foster, Michael Jabez (Hastings & Rye)	Knight, Jim (S Dorset)
	Kumar, Dr. Ashok
Foulkes, rh George	Ladyman, Dr. Stephen
Francois, Mark	Lait, Mrs Jacqui
Gardiner, Barry	Lammy, David
Garnier, Edward	Laxton, Bob (Derby N)
George, rh Bruce (Walsall S)	Lazarowicz, Mark
Gerrard, Neil	Lepper, David
Gilroy, Linda	Leslie, Christopher
Godsiff, Roger	Letwin, rh Oliver
Goggins, Paul	Levitt Tom (High Peak)
Goodman, Paul	Lewis, Ivan (Bury S)
Gray, James (N Wilts)	Liddell-Grainger, Ian
Grayling, Chris	Lidington, David
Green, Damian (Ashford)	Lilley, rh Peter
Greenway, John	Linton, Martin
Grieve, Dominic	Lloyd, Tony (Manchester C)
Griffiths, Jane (Reading E)	Loughton, Tim
Grogan, John	Love, Andrew
Gummer, rh John	Lucas, Ian (Wrexham)
Hain, rh Peter	Luff, Peter (M-Worcs)
Hall, Mike (Weaver Vale)	Luke, lain (Dundee E)
Hamilton, David (Midlothian)	McAvoy, Thomas
Hammond, Philip	McCabe, Stephen
Hancock, Mike	McDonagh, Siobhain
Hanson, David	MacDonald, Calum
Harris, Dr. Evan (Oxford W & Abingdon)	McDonnell, John
	MacDougall, John
Harris, Tom (Glasgow Cathcart)	McFall, John
Havard, Dai (Merthyr Tydfil & Rhymney)	McGuire, Mrs Anne
	McIntosh, Miss Anne
Hawkins, Nick	McIsaac, Shona
Hayes, John (S Holland)	McKechin, Ann
Healey, John	Mackinlay, Andrew
Heath, David	McLoughlin, Patrick
Heathcoat-Amory, rh David	Mactaggart, Fiona
Henderson, Doug (Newcastle N)	McWalter, Tony
Hendrick, Mark	McWilliam, John
Hendry, Charles	Mahmood, Khalid
Heppell, John	Malins, Humfrey
Hill, Keith (Streatham)	Mallaber, Judy
Hoey, Kate (Vauxhall)	Mann, John (Bassetlaw)
Holmes, Paul	Marris, Rob (Wolverh'ton SW)
Hood, Jimmy (Clydesdale)	Marsden, Gordon (Blackpool S)
Hoon, rh Geoffrey	Marshall-Andrews, Robert
Hopkins, Kelvin	May, Mrs Theresa
Howarth, Gerald (Aldershot)	Merron, Gillian
Howells, Dr. Kim	Michael, rh Alun
Hughes, Kevin (Doncaster N)	Miller, Andrew
Hughes, Simon (Southwark N)	Mitchell, Austin (Gt Grimsby)
Humble, Mrs Joan	Moffatt, Laura
Hunter, Andrew	Mole, Chris
Iddon, Dr. Brian	Moran, Margaret
Ingram, rh Adam	Morgan, Julie
lrranca-Davies, Huw	Morley, Elliot
Jackson, Glenda (Hampstead & Highgate)	Morris, rh Estelle
	Mudie, George
Jackson, Helen (Hillsborough)	Mullin, Chris
Jenkins, Brian	Munn, Ms Meg
Johnson, Miss Melanie (Welwyn Hatfield)	Murphy, Jim (Eastwood)
	Murrison, Dr. Andrew
Jones, Helen (Warrington N)	Naysmith, Dr. Doug
Jones, Kevan (N Durham)	O'Brien, Stephen (Eddisbury)
Jones, Lynne (Selly Oak)	Olner, Bill
Jones, Martyn (Clwyd S)	Osborne, George (Tatton)
Jowell, rh Tessa	Ottaway, Richard
Keeble, Ms Sally	Page, Richard
Keen, Alan (Feltham)	Paice, James
Keen, Ann (Brentford)	Palmer, Dr. Nick
Kemp, Fraser	Paterson, Owen

Perham, Linda	Spring, Richard
Pike, Peter (Burnley)	Squire, Rachel
Plaskitt, James	Stanley, rh Sir John
Pollard, Kerry	Steen, Anthony
Pond, Chris (Gravesham)	Stewart, Ian (Eccles)
Portillo, rh Michael	Stinchcombe, Paul
Pound, Stephen	Stoate, Dr. Howard
Prentice, Ms Bridget (Lewisham E)	Stuart, Ms Gisela
	Stunell, Andrew
Primarolo, rh Dawn	Sutcliffe, Gerry
Prosser, Gwyn	Tami, Mark (Alyn)
Rammell, Bill	Taylor, David (NW Leics)
Rapson, Syd (Portsmouth N)	Taylor, Sir Teddy
Raynsford, rh Nick	Teather, Sarah
Redwood, rh John	Thurso, John
Reed, Andy (Loughborough)	Timms, Stephen
Reid, rh Dr. John (Hamilton N & Bellshill)	Tipping, Paddy
	Todd, Mark (S Derbyshire)
Rendel, David	Tonge, Dr, Jenny
Robertson, John (Glasgow Anniesland)	Touhig, Don (lslwyn)
	Trickett, Jon
Robertson, Laurence (Tewk'b'ry)	Turner, Dr. Desmond (Brighton Kemptown)
Robinson, Geoffrey (Coventry NW)
	Turner, Neil (Wigan)
Roche, Mrs Barbara	Twigg, Derek (Halton)
Rooney,Terry	Tyler, Paul (N Cornwall)
Rosindell Andrew	Tynan, Bill (Hamilton S)
Ross, Ernie (Dundee W)	Tyrie, Andrew
Roy, Frank (Motherwell)	Vaz, Keith (Leicester E)
Ruane, Chris	Viggers, Peter
Ruddock, Joan	Vis, Dr. Rudi
Ruffley, David	Walter, Robert
Russell, Bob (Colchester)	Wareing, Robert N.
Russell, Ms Christine (City of Chester)	Watkinson, Angela
	Watson, Tom (W Bromwich E)
	Watts, David
Salter, Martin	White, Brian
Savidge, Malcolm	Whittingdale, John
Sawford, Phil	Wicks, Malcolm
Sedgemore, Brian	Widdecombe, rh Miss Ann
Shepherd, Richard	Wilkinson, John
Sheridan, Jim	Williams, Betty (Conwy)
Short, rh Clare	Williams, Roger (Brecon)
	Winnick, David
Simon, SiÔ (B' ham Erdington)	Winterton, Sir Nicholas (Macclesfield)
Skinner, Dennis
Smith, Geraldine (Morecambe & Lunesdale)	Woodward, Shaun
	Woolas, Phil
Smith, Jacqui (Redditch)	Worthington, Tony
Smith, John (Glamorgan)	Wright, David (Telford)
Smith, Llew (Blaenau Gwent)	Wright, Tony (Cannock)
Soames, Nicholas
Soley, Clive	Tellers for the Ayes:s
Spellar, rh John	Joan Ryan and
Spink, Bob (Castle Point)	Paul Clark
NOES
Ewing, Annabelle	Williams, Hywel (Caernarfon)
Price, Adam (E Carmarthen & Dinefwr)
	Tellers for the Noes:
Salmond, Alex	Pete Wishart and
Weir, Michael	Mr. Elfyn Llwyd

Question accordingly agreed to.

Bill read a Second time.