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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

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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

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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

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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

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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


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


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


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:


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


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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:


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

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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 bid 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.


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