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The Minister properly reminded us that he has agreed to continue the levy for a further year beyond what was originally envisaged. Everybody in the racing industry welcomes that decision because it means that the levy board will not be wound up until autumn 2006, and that the levy will end at the end of March 2006. That means that the fixture list for 2005 can be developed in the coming months in the knowledge of the income for that year. Nevertheless, the uncertainty beyond that is significant and I therefore suggest that, as we all hope that the OFT deliberations will be concluded later this year—I hope speedily, but it may be some months yet—it would be wrong to give the Government carte blanche to dispose of the levy board, and for the Secretary of State to have complete authority over the transfer scheme for its assets and its property. That right should not be given at this stage because we do not know what may happen.
The Minister has clearly and repeatedly said that he intends to end the levy. I understand and accept his determination to do that, but before giving the final say-so, and before giving the Secretary of State total power to decide what happens to the assets through the transfer scheme, the House should be entitled to the opportunity to reflect on the outcome of the OFT investigation. If the rule 14 notice stands and the negotiating powers of the race courses break down as was suggested last April, racing could experience a significant diminution of income—much greater than was envisaged when the original idea to dispose of the levy was devised.
The levy raises a considerable sum of money, and if racing lost the income from it at the same time as facing a reduction in its anticipated income from the sale of
data, it would be catastrophic for the industry. I therefore advocate that before the final decision to wind up the levy board is made—right as it may be in principle—hon. Members should have the opportunity to reflect on it and preferably consider a report. If we cannot consider a report, I hope that we can at least be fully cognisant of the outcome of the OFT investigation. It is right and proper for all of us who are concerned about the long-term financial welfare of racing to be pretty clear that it will have a continuing income stream. Once the levy goes, there should be a replacement stream from commercial activities. If the OFT decides that that income stream should be significantly less—or will inevitably become significantly less—than that from the levy, hon. Members should have the opportunity to reconsider the matter.I have outlined the purpose of amendments Nos. 3 and 4, which are a pick-and-mix—two alternative arrangements—but I hope that the Minister will allow the House an opportunity to consider whether and how to wind up the levy board and transfer its assets once we know the resolution of some of the uncertainties that currently beset the industry. If the Government decide to plough on regardless of the outcome of the OFT decision, and that decision is to uphold last year's rule 14 notice, it is possible that racing, race goers and punters will suffer considerably. That would be not only regrettable but a sad indictment of the Government's attitude, given their generally well-meaning intentions. I hope that they will give hon. Members an opportunity to consider the matter further before making the final decision.
Mr. Don Foster: Hon. Members will know that until the 1960s there was an informal arrangement whereby money was transferred from bookmakers to racing. However, in the 1960s it was decided that the agreement should be more formalised, and the Horserace Betting Levy Board and the accompanying levy were established. The levy has been important to the sport and industry of racing.
Some £70 million a year is transferred from the levy to horse racing for uses that are more wide ranging than some might suspect. Some of the money is used to improve veterinary medicine and education. That is clearly welcome. Some is used to develop horse breeding and some for an additional purpose, which the hon. Member for South-West Hertfordshire (Mr. Page) eloquently described in Committee, when he said:
- "I stand on concrete steps under a corrugated iron roof, the rain drips down, it is windy and I think, 'I really am enjoying this.' This is where the levy board plays an important part. Over the years, it has been responsible for seeing many of our race courses upgraded because it wants to make racing more enjoyable."—[Official Report, Standing Committee D, 22 January 2004; c. 68.]
Nevertheless, as the hon. Member for South-East Cambridgeshire admitted on behalf of the Conservative party, and Liberal Democrat Members also acknowledge, the time has come for the Government to stand aside from interference in the relationship between the bookies and racing. We need to find an
alternative. However, we need to be sure that whatever alternative is adopted, it will continue to ensure revenue streams of at least the current order of magnitude for racing, and the range of benefits that I described.In Committee, and here today, hon. Members of all parties have expressed the concern that the OFT's interference through the rule 14 notice, and the further complication of a European Court case that is currently being considered, mean that there is no certainty about what the future may hold, and what could replace the levy and the money that it brings to racing. It is therefore eminently sensible to have some mechanism whereby we can determine the most appropriate way forward. Since we do not know what that will be, it is sensible to include a provision that ensures that there will be an opportunity to decide to end the levy board and the levy only when we know the alternative and are convinced that it will make sense in terms of the benefits that it brings to racing.
In Committee, several alternative formulations were presented. The Minister accepted none. He has generously been given not one but two possible options to consider. I hope that he will accept at least one—or possibly both, in keeping with the belt-and-braces approach of the hon. Member for South-East Cambridgeshire. We already have two victories to one; I hope that that number will increase before long.
Mr. Deputy Speaker (Sir Michael Lord): I call Mr. Richard—I am sorry, I cannot remember—
Mr. Deputy Speaker: I beg your pardon, Mr. Page.
Mr. Page: Thank you, Mr. Deputy Speaker.
Mr. Paice: Is my hon. Friend not retiring soon?
Mr. Page: Indeed, it is lucky that I am going.
I do not think there is any disagreement about the value of the levy board's work. The hon. Member for Bath (Mr. Foster) mentioned my brief contribution on Second Reading, thus adding to my already growing reputation as a gambler and habitué of the race course. Indeed, I am seldom in the House; it is lucky that I am here today—and no doubt it is because I am nearly always at the race course that you could not remember my name, Mr. Deputy Speaker. I shall be extremely fortunate if I am called by you again in the next year.
I am sympathetic to the Secretary of State's wish to get rid of his obligations and responsibilities in respect of the levy. I see no point in involving Government in commercial negotiations and arrangements such as this, and I think all Members would agree with me on that. The problem is that the existing system incorporates a security of supply. We may not like that—the industry may periodically engage in internecine warfare over the calculation of the levy—but at the end of the day there is that security. We surely all agree that the levy must remain. I do not think that any faction in racing disputes the value of that; the factions disagree merely on how much they must put in to that value.
My hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) hinted at a few of the existing problems, such as media rights and what the Office of Fair Trading may do. Such things could put that security of supply in doubt. We need a commercial arrangement that does not involve the Government, but we also need to retain the security. My hon. Friend—who has initiated a trend for mixing and matching amendments so that we can choose whatever we fancy—has identified an important point: until we know for certain what the security arrangements will be after the OFT's intervention and after privatisation, we need to keep our options open. I do not understand why the Minister wants to exclude so many possibilities at this stage. I hope that he will consider the amendments and—putting his hand either on his heart or on his wallet—will say, "Trust me; I'll come up with something as the Bill proceeds."
Mr. Salmond: I shall not repeat all the arguments that have already been advanced, but I agree with them. I know from what the Minister said in Committee that he recognises the dilemma that confronts everyone—not least him. This is, however, a bad time at which to legislate. The parameters of market power in the industry are yet to be set. The industry has had considerable success lately: its attendance levels are the highest for many generations, many aspects of it are flourishing, and there is a competitive betting market. It would be extraordinary if, by dint of regulation, interference or not thinking carefully enough, we upset a balance of power that is healthy and necessary.
It is natural that various interests should try to secure a dominant position in the industry. We need only consider greyhound racing, with which one Member seemed to be remarkably familiar. We should bear in mind what happens when bookmaking interests are in a position to control the industry, to the detriment of others—not least the consumer, or punter. I fear that the fundamental lack of understanding of the balance of forces to which I have referred among people at the OFT might create a similar imbalance in horse racing. I accept that the Minister is in a difficult position, but, although he has expressed sympathy, he has not explained why the OFT seems unable to understand that such an imbalance would be created by allowing the buying of rights while disallowing the selling of rights. That is a strange conundrum.
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