The Tote (Hansard, 10 June 1999)

§ The Minister of State, Home Office (Lord Williams of Mostyn)
My Lords, the Horserace Totalisator Board is a non-departmental public body 1542 whose members are appointed by the Home Secretary. Technically, it is these appointed board members who are responsible for the assets owned by the Tote but they do not actually own the assets. Therefore, before the Tote can be sold it will be necessary to introduce primary legislation to change its status and bring it fully within public ownership.

§ Lord Burnham
My Lords, I asked a very short, direct Question. I was not expecting a very direct Answer. Has the Minister read Section 12(5) of the Betting, Gaming and Lotteries Act 1963? It states: The Totalisator Board may regulate their own procedure and make standing orders governing the conduct of their business". Does not that imply that the Board of Directors owns the Tote and that it alone is responsible for the management of its business and for deciding whether it should be sold; and, if it is sold, as a corporate body to receive the proceeds?

§ Lord Williams of Mostyn
My Lords, no; that is not a correct legal understanding of the position. I am familiar with the regulations referred to. Again, once upon a time I acted for and against the Tote—not on the same occasion! If one looks at the Act, one sees that the Totalisator Board is a body corporate with perpetual succession and a common seal. I believe that the legal description that I gave in my Answer is accurate. Primary legislation will be needed to dispose of the Tote. The Tote can deal with its assets in the way that the noble Lord mentioned, but the Tote itself will have to be the subject of primary legislation.

Viscount Falkland
My Lords, may I put it to the Minister that we should not be considering this interesting Question if the Tote were doing what it was initially set up to do; namely, to run pool betting'? Does the Minister agree that on the principle, "If you can't beat them, join them", it has effectively become a bookmaker? Is that not why privatisation is being considered? Is there a possibility that the Tote could revert to being an operator of pool betting? Could it he provided with the circumstances in which it could flourish and get rid of the bookmaking part?

§ Lord Williams of Mostyn
My Lords, I do not think that there is a realistic prospect of getting rid of bookmakers in this country. Earlier this week, in answer to the noble Baroness, Lady Trumpington, I pointed out that there was bookmaking activity in Alderney. In Hansard it is given as "Orkney", and I believe that to be incorrect!
The Tote still is the pool betting operator in this country. The noble Viscount is right. Over recent years, the Tote has extended its own estate of bookmaking offices—in other words, licensed betting shops. The statement made by the Home Secretary on 12th May is unambiguous. The necessary legislation will be the subject of consultation in due time.

§ Lord Peston
My Lords, I am certain that my noble friend's Answer is right. However, will he forgive me for saying that it makes some of us who are not lawyers 1543 despair of the law? I thought that the Question was fairly straightforward; namely, who owns the Tote? Would it help my noble friend if I asked a subsidiary question; namely, who owns the net profits of the Tote? Can he at least tell us that?

§ Lord Williams of Mostyn
My Lords, the net profits of the Tote essentially go back into the racing industry. It is an unusual position, but it is not unique. The water authorities are in a similar position, and they were subject to primary legislation; so was British Aerospace. The position is unusual, but not unique. I believe that I have correctly represented the legal position. I am shocked that my noble friend should ever be despairing of either lawyers or the law.

Viscount Astor
My Lords, does the Minister agree that the Government's proposal to dispose of the Tote is a change of policy, and a snub for the Foreign Secretary, who said clearly and often before the last election that a Labour government would never sell the Tote? Does he agree that the Tote should operate for the benefit of racing, and that that can best be achieved by the British Horseracing Board, which represents racing, taking over the Tote? On what basis can the Government demand payment for the Tote when they have never put a single penny into the Tote since it was created in 1928?

§ Lord Williams of Mostyn
My Lords, it is not a case of demanding payment. It is a case of proposing to both Houses of Parliament primary legislation, which it is then for Parliament to decide upon. When that primary legislation is passed, if it is passed, then the interests of all parties concerned will have to be taken into account. Those were the recommendations in the steering group's report. The report said that the interests to be taken into account were those of the taxpayer as well as other stakeholders. I believe that the Government are acting prudently, as a proper steward of something that may well bring revenue to the taxpayer as well as benefit to racing.

Earl Ferrers
My Lords, as the Minister is so able, in so far as he can argue for and against the Tote according to the temperature of the day, does that mean that the views that he expresses on the House of Lords Bill should be taken with equal abandon?

§ Lord Williams of Mostyn
My Lords, it was not the temperature of the day that mattered; it was the fee of the day that mattered. Alas, I am no longer in that happy position.

§ Lord Evans of Parkside
My Lords, is my noble friend aware that some of us on this side of the House have difficulty in understanding why a Labour Government are proposing to privatise the Tote? Is he further aware that, unless the interests of the racing industry and the considerable contribution that the Tote 1544 makes to the industry are taken into account and safeguarded, some of us will not be happy with the proposed legislation and may well even oppose it?

§ Lord Williams of Mostyn
My Lords, I said in my earlier Answer that it would be necessary to introduce primary legislation to bring the Tote fully into public ownership, which I am sure my noble friend would welcome. Thereafter, as the report of the steering group makes absolutely plain, there are a number of legitimate interests to be taken into account. One is the interest of the taxpayer and the public; one is the interest of the racing industry, which is very important. I stress that we are looking to consultation with all those who are concerned and all the different legitimate interests.

§ Baroness Gardner of Parkes
My Lords, are the appointments to the board made in the normal way that appointments to public bodies are made? If so, how many women directors are, or have been, on the Tote board?

§ Lord Williams of Mostyn
My Lords, I do not know how many women are on the board. However, I shall make it my business to discover that interesting fact this afternoon and immediately write to the noble Baroness and place a copy of the letter in the Library.

§ Viscount Head
My Lords, the recent report by the government steering group set up to review the Tote stated, at paragraph 17, that, If the Tote were given to Racing the taxpayer would gain nothing". As I understand it, the taxpayer has no reason to expect anything from the Tote. The Tote has never been the recipient of taxpayers' money—quite the reverse. The taxpayer has benefited from betting duty which the Tote has paid since the duty was introduced in 1966. Is it therefore possible for the Tote to continue to provide funds for racing, which it has done with increasing success since it was instituted in 1928, by being granted trust status, whereby it could manage its own affairs for the continued benefit of horse racing?

§ Lord Williams of Mostyn
My Lords, that is a notional alternative. The noble Viscount mentions paragraph 17 of the report. I further invite the attention of the House to paragraph 18, which states: The Steering Group concluded it would be difficult to justify to Parliament an option which ignored the legitimate interest of the taxpayer completely". That is the Government's stance.

Viscount Astor
My Lords, before the Minister leaves the point, does he accept that the steering group was not an independent body? Out of the six members of the steering group, five were his officials from the Home Office.

§ Lord Williams of Mostyn
Yes, my Lords, but we had the independence of the Treasury official as well and the chairman of the Tote.

Lord Renton
My Lords, having had responsibility 40 years ago for helping with the piloting of the relevant 1545 legislation, may I assure the noble Lord that in his original first answers he seemed to get the legal position right. The purpose of that legislation was to help the racing industry which was then in a poor way. We regarded the Tote as trustees for the racing industry.

§ Lord Williams of Mostyn
My Lords, as was indicated earlier, the Tote was set up in the 1920s. It has changed its function, as the noble Viscount, Lord Falkland, indicated. It is not simply running pool betting at the moment, it runs a considerable number of licensed betting offices. We thought it right to set up the steering group. We examined its conclusions and we believe that all interests—I stress that—can be legitimately considered and properly reflected through consultation, with a view to the introduction of primary legislation.