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Mr. Paice: Far be it from me not to begin by thanking the Minister for fulfilling at least one undertaking that he gave in Committee—to specify the seven-year period in the Bill. I say that unequivocally. I think the Government have been hard pressed to find a justification for changing the wording of the amendment that we tabled in Committee, but I do not grumble about that. The fact remains that the Minister has agreed on the seven years, which I think all Members will welcome, although I remain puzzled as to why he should be happy to turn that undertaking into legal language while continuing to resist other proposals, including some that we have already debated today.
I shall address my remarks mainly to amendment No. 1. Subject to the Minister's reply, I may wish to move the amendment formally after the debate on this group. What concerns me and, I believe, many other hon. Members, is what will happen after seven years. The Minister has repeated this afternoon his absolute determination that, come what may, there will be no exclusive licence after seven years. I understand that position, but I want again to put the counter-argument to him.
When debating another group of amendments, Opposition Members referred to the uncertainties that surround the racing industry, including the Office of Fair Trading investigation, matters before the European Court and the renegotiation of the "Attheraces" contract, which involves media rights to 49 different racecourses. Those are great uncertainties, to which we could add the uncertainty over what will happen to the Tote. The Minister is right to say that seven years will provide time for the Tote to build its fortunes, to recoup the sum that it must borrow to purchase itself from the Government and to establish itself even more solidly in the pool betting marketplace. However, there is an issue of further developments. In Committee, the Minister rightly said that we could not have foreseen seven years ago that betting exchanges would even exist, let alone that they would have the volume of turnover and the impact not only on racing, but on all sports, that they now have. I put it to the
House that similar uncertainty exists today. We cannot foresee what innovations in the next seven years, especially using modern communications technology, will put an entirely different complexion on the face of betting and gambling, and on pool betting in particular.In case the Minister misunderstands my intention, I stress that we are not suggesting that the Tote should have a licence for more than seven years, or that any extension of the licence should be given to the Tote after that period. I am advocating—I shall come to the detail in a moment—simply that before that seven-year period expires, there should be a reconsideration of whether a complete free-for-all in the pool betting market is in the best interests of racing and the consumer—that is, the punter. Consideration should therefore be given to whether a further exclusive licence should be issued to someone at that time.
I am afraid that amendment No. 1 appears slightly differently on the amendment paper from how I intended it to appear, because I did not intend it to include two consecutive paragraphs. They were designed to be alternative paragraphs, and I hope that the Minister will take that on board when he responds. I am the first to recognise that as the amendment stands, its two paragraphs do not follow logically. I had tabled it to suggest alternative paragraphs, but because they referred to the identical part of the Bill, they have been transposed into one amendment. Be that as it may, the amendment's approach and the issue of competition are important.
The amendment's paragraph (c) provides for the issue of a new exclusive licence at the end of seven years. As I have said, that would not necessarily be issued to the Tote; it could be issued to any organisation whose
- "purpose in holding such a licence is to generate income for the support or improvement of horseracing".
In Committee, quite a lot of reference was made to the national lottery. The Minister sought to ridicule any comparison with the national lottery by saying that it was acquired by open competition. Yes, that is fine, and that is precisely what we propose: just as is the case when the lottery licence runs out, or prior to its running out, the Government or their agencies must decide on the basis of an open competition—just as they did before they decided to reissue the national lottery licence to Camelot, despite their manifesto undertakings, of which I hasten to remind the Minister—to whom to issue a further exclusive licence.
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Paragraph (d), which I had intended as an alternative approach, simply suggests that prior to the end of the seven years' exclusivity, an inquiry should take place into what has happened over those years in order to advise the Secretary of State whether it would be in the interests of racing and the punter to issue a further exclusive licence, and whether such a licence, if issued, should be issued to the holder of the licence—the Tote—or to somebody else.
Those approaches were designed as alternatives, but the fundamental point is that we should not make the decision now when we do not know what the position
will be in seven years' time. That period will allow the Tote to recoup its investment and to grow and develop, and it may provide it with the opportunity to compete with all comers in a new, free pool betting market, or it may not, if there have been developments in betting that will militate against that.The right hon. Member for Livingston (Mr. Cook) on Second Reading and others in Committee have argued that the more organisations that run pool betting systems, the more pools there are. The smaller the pools, the less attractive they are to punters. One wonders whether the national lottery would generate as much money for good causes—the analogy is with the generation of money from pool betting for racing—if instead of there being one national lottery, there were 10, and instead of jackpots of £2 million, £3 million or £5 million, there were jackpots of only £200,000. We need to make that comparison, as I fear that not as much interest may be generated if the pools are much smaller.
I do not know, any more than the Minister does, what the situation will be in seven years' time. The difference between us, however, is that I am prepared to say that I do not know. I do not therefore believe that we should make the decision now, and it is not necessary to make it now. We can leave it for at least five years before having some sort of review. By contrast, the Minister insists that he knows what the situation will be in seven years' time, and that even if he does not know, and he has got it wrong, that does not matter because he is determined to go ahead and there will be no exclusive licence for pool betting. That could be disastrous for betting, racing and the punters.
It is not too late for the Minister to reconsider. He referred in Committee to the fact that the cost-benefit analysis that we were given demonstrated that getting rid of an exclusive licence could seriously harm the Tote and could be a disbenefit to punters and the racing industry. Having accepted that in his published documents, he seems to be running away from that conclusion by saying that, come what may, the licence will be removed and there will be no further exclusive licence.
I hope that the Minister will understand that the call for reconsideration is justified, and that we will need to look at what the picture is closer to the time when it really matters. No decision should be taken at the moment about the non-renewability of such an exclusive licence, which is why I tabled amendment No. 1, albeit in a slightly different form from that in which it appears on the amendment paper, although its import is there. I look forward to the Minister's remarks, and subject to those I may want to press that amendment to a vote.
Mr. Don Foster: I referred earlier to the good nature of our deliberations on these issues in Committee and the fair amount of cross-party consensus. It is nice to see that reflected in a 1–1 score draw: the Minister was not prepared to accept the amendment to guarantee that profits from the Tote continued to go into racing, but I welcome his agreement to write the seven-year period into the Bill.
Given the consensus, it would be churlish of me to criticise the hon. Member for South-East Cambridgeshire (Mr. Paice) for suggesting that his was the amendment that first raised this matter in
Committee, when in fact it was raised by the Liberal Democrats. Since we all agree with one another's amendments, who cares?As the hon. Gentleman rightly said, we must take on the issue of the non-renewability of the seven-year exclusive licence, and whether it really makes sense. As the Minister knows only too well, we debated the issue exhaustively in Committee, but all the evidence that we heard then unfortunately points absolutely and inexorably in one direction alone, and to have no renewal at the end of seven years, regardless of what may have happened, strikes me as completely crazy.
Those listening to our deliberations, or joining in them for the first time, may wonder why these issues are so important. They may not be aware of the huge importance of racing in this country, as both a business and a sport. We know that 6 million people went racing last year and that 100,000 are employed in the industry. We also know that the Tote is a large organisation with a turnover of some £900 million. What happens to the Tote, and whether it continues to support racing, which we hope it will, is an important issue.
Everyone acknowledges that it will be difficult for the new owners to establish themselves under the new arrangements, and if we are to ensure that they continue to put money back into racing, that seven-year period is vital, but the real question is what will happen at the end of that time. All the evidence points to cause for concern if the Tote's operation is then put into the open market, as the Government clearly intend.
The Minister himself said, in a press release of 27 November last year, under the heading, "Tote wins seven year licence to operate horserace pool betting":
- "we also believe a reasonable period of preparation is necessary in order to safeguard the revenue racing receives from the Tote and its successor is necessary in order to"—
If the competitive market comes in after the seven-year period, there will be great uncertainty about what will happen. We all know that the right hon. Member for Livingston (Mr. Cook) has a great deal of knowledge and expertise in this area. On Second Reading, he said:
- "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".—[Official Report, 8 January 2004; Vol. 416, c. 453.]
As the hon. Member for South-East Cambridgeshire has eloquently made clear, we have no idea what the situation will be in seven years time. The Minister himself drew our attention on several occasions to the
new Bill on gambling, pointing out that it will be very difficult to deal with because of the huge changes that are taking place in the industry. They are taking place not just because of betting exchanges, but because of many other factors.It is worth reflecting on what the Minister said during our deliberations in Standing Committee:
- "We are trying to protect the Tote. The first step is to put it partially into the marketplace, giving it more freedoms and making sure that it can develop in a more robust way. Hopefully"—
- "seven years from now, it will be able to stand in the market place without further protection and with exclusivity."—[Official Report, Standing Committee D, 20 January 2004; c. 44.]
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