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4.15 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): I congratulate the hon. Member for Tewkesbury (Mr. Robertson) on securing the debate, which is a continuation of Department of Trade and Industry questions this morning. I also congratulate the hon. Members for
South-West Hertfordshire (Mr. Page), for Epsom and Ewell (Chris Grayling) and for Tatton (Mr. Osborne) on making informed contributions, reflecting their constituency backgrounds and their interests in the well-being of the horse racing industry. The debate provides a welcome opportunity to address an issue that is undoubtedly of interest not just to people directly involved or employed in the sport, but to many of the industry's customers, especially the large number of people who attend meetings, who choose to back horses or who simply enjoy watching the sport at home.I would be the first to recognise that horse racing is much more than just a sport. It gives enjoyment and employment to many thousands of people in the UK and, as the hon. Member for Tewkesbury emphasised, it is a significant contributor both directly and indirectly to the UK economy. Substantial further income and economic activity is generated by the betting industry, as well as related activities such as stables and stud farms, some of which attract significant overseas income, as has been mentioned.
The sport today very much reflects the outcome of a continuing evolution, founded on its long and rich history. I hope that all parts of the sport continue to address and respond to changes in the surrounding world, as they have done in the past, because that is the best way to ensure the sport's future. I am not going to get involved in arguing about the best race course in the country, although if I did, I would add York to the list; nor am I going to get involved in discussing the merits of particular owners, especially as Sir Alex Ferguson is the manager of a team that I support.
I have noted the concerns raised by the hon. Gentleman and by others in correspondence and a variety of other ways. I am sure that the Office of Fair Trading will take account of those in its continuing investigation into the agreements. I fully understand the desire expressed in the Chamber and elsewhere to retain the essential character of the sport, but that must be balanced against the need for all sections of the business world to comply with the fair trading principles that underlie the competition legislation endorsed by the House. I must make it clear that under our framework of competition law, the decision on the matter is entirely for the Office of Fair Trading. It would be inappropriate for me as the Minister with responsibility for competition to intervene in its deliberations. Perhaps we should reflect on why we have reached this stage.
For several years, the issue has received much media coverage, some of it alarmist—the "end of racing as we know it" scenario. I do not include Mr. Savill in that. I read his speech and heartfelt thoughts about what might happen to the industry. Some of the coverage has been confusing, so perhaps it is worth clearing the air by setting out the background and explaining briefly the Office of Fair Trading's role before explaining the role that falls to the DTI.
To determine whether or not certain agreements complied with chapter I of the Competition Act 1998, a little over three years ago, on 28 June 2000, the British Horseracing Board and the Jockey Club notified a number of agreements to the OFT. For those less familiar with the detail of the 1998 Act, it might be helpful to summarise that chapter I expressly prohibits agreements that prevent, restrict or distort competition. The British Horseracing Board and the Jockey Club
considered that those agreements, including the orders and rules of racing and general instructions, did not infringe chapter I and they sought a decision from the OFT granting negative clearance—in essence, seeking a clean bill of health for the agreements. In the event that clearance was not granted by the OFT, the parties sought exemption from the chapter I prohibition. It is worth stressing that the parties specified that the application was for a decision, not for guidance. When the OFT receives such a notification, it is its job to apply the Competition Act, no more, no less.The applicants are required to state which provisions or effects of agreements might raise questions of compatibility with the chapter 1 prohibition. The parties duly provided a list that included a provision that the OFT has provisionally—I stress "provisionally"—concluded is an infringement of the Competition Act and cannot be granted an exemption. The OFT has also found a number of other provisions within the orders, rules and general instructions that it has provisionally concluded infringe the Competition Act, and cannot be granted an exemption. The OFT has advised the applicants of its provisional conclusions and the theoretical next steps to give them a chance to make oral or written representations, for instance to correct any factual errors or misunderstandings in the provisional conclusions before it makes a decision on whether to proceed with a final infringement decision.
I understand that the British Horseracing Board and the Jockey Club duly submitted a response to the OFT on 5 September. It is now for the OFT to consider those responses and determine whether or not to proceed with a final infringement decision. It is, however, worth noting that in such cases even after the OFT has issued a final infringement decision a full right of appeal would exist. It would therefore be open to the various industry respondents to challenge the decision. In such circumstances they would have a full right of appeal to the Competition Appeal Tribunal, which would be able to consider the appeal and hear the case again on its merits.
As for the role of the Department of Trade and Industry, I am sure that the hon. Member for Tewkesbury will understand that the matters being considered by the Office of Fair Trading fall within its ambit, so it would be inappropriate for me as a Minister with responsibility for competition to seek to intervene in its deliberations. However, the hon. Gentleman raised the Competition Act and the exemptions available to the Secretary of State. He cited the block on public transport ticketing schemes. I shall discuss this with him later, but my information is that that block exemption was made under section 9, not section 3, to which he referred.
Mr. Laurence Robertson: I would be delighted to meet the Minister to discuss that in more detail, but for the record, there are two ways in which exemptions can be granted under section 4—there are exemptions that the director of the OFT can recommend, but the Minister has the right to provide additional exclusions. My remarks may have led to confusion, but there are two ways in which items can be excluded from chapter I.
Mr. Sutcliffe: I am grateful to the hon. Gentleman. In the spirit of co-operation in which we have tried to proceed, we will look at that again, and I shall discuss it with him further.
As a competition Minister, it is not my role to be involved in the OFT investigations. However, I shall look at the role of the Department for Culture, Media and Sport, which has been mentioned by the hon. Gentleman and others, particularly the role of the Minister for Sport and Tourism, whose views are outlined in a letter to the hon. Gentleman. We must also ensure that the director general of fair trading is aware of the issues that have been raised in our debate, and we shall make sure that he is contacted.
The hon. Member for Epsom and Ewell talked about other sports and the way in which they operate. The sponsoring Department for the industry is DCMS—the Minister for Sport and Tourism has taken a particular interest in this issue, and it is right and proper that he does so within the framework of his Department. I am in contact with him, and shall write to him about today's debate and make sure that he is fully aware of Members' concerns. The issue is of major significance to the industry, as horse racing is enjoyed, as has been said, by vast numbers of people, whatever their background, in every part of the country.
The OFT must conclude its deliberations, and the industry will have the opportunity to put its case. I am sure that hon. Members will continue to make their views known to me and to my right hon. Friend the Minister for Sport and Tourism. It is important that the right decision is reached in the framework of the competition regimes that we have introduced, and that we secure the industry's future.
The hon. Member for South-West Hertfordshire spoke about the warring factions in the horse racing industry. I am aware of that from other sources. The various factions should realise that it is important that they come together. I believe the review will achieve that. We want a vibrant industry and fair competition. I hope the hon. Gentleman will accept my comments. We will wait to see what transpires and make sure that all the relevant bodies have the information and the serious thoughts that hon. Members have presented. I thank the hon. Member for Tewkesbury for raising the matter.
- Adjourned accordingly at twenty-six minutes past Four o'clock.
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