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Despite the Minister's kind remarks, we have some reservations about the level of support from the Government and from their Mayor of Londonas 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 UKthe 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:
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.
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 promisesonly about an hour ago, the House saw plenty of evidence of thatso 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 Ministersthis Bill is exemplary in that regardwith 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 wishessave 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 saidthey repeated it todaythat 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.
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 thirda 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 figureI know how tough that battle wasand 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
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.