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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 be 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.]
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.
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