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21 Nov 2007 : Column 123WH—continued
The decision of the RCA to lay claim to the commercial benefits to be gained by the auction of valuable pitch positions has, as we have heard, stunned the National Joint Pitch Council, which set it up in the first place. It is quite disingenuous for the RCA to argue back in 2001, and then in 2003, that the Government advocated a change in the arrangement for pitch allocations and a move to commercial arrangements. It is a short-term smash and grab. I believe that the Government had no such intention, and that that is an interpretation of the 2005 Act,
which serves only to increase the commercial gain of the RCA, at the expense of the very people and businesses without which there would be no trackside betting industry—in other words, the very people and business that, together with the trainers and jockeys, give the entire industry its flavour and value.
Indeed, the Government’s recommendations went only as far as a change to the five-time rule. That refers to the rent of the pitch, not to the asset itself—the moral property. There is no reason why commercial arrangements by the RCA about the rent cannot take place while recognising the bookmakers’ list positions, as it has always done. The RCA, again disingenuously, is attempting to use the umbrella term “commercial arrangements” to refer to both the rent and the assets, when, in fact, they are, always have been, and should remain entirely distinct and separate.
We are talking essentially about the livelihoods of hundreds of people in our gaming sector, but particularly about the family bookmakers, as we heard during the Select Committee on Culture, Media and Sport sittings, which many Members present attended. The family bookmakers have spent generations in the industry, and my constituents who trade under the name, Taffy, have been hit by a triple whammy: first, over the father-child rule, secondly over pitch allocations and sales, about which I cannot go into detail because of actions taken by the right hon. Member for Chingford and Woodford Green, and finally, over losing the last thing that they possess—their pitch position. The family have been hit three times within one generation, but the measure will affect small rather than large bookmakers. Large bookmakers will also be damaged, but they have large assets, and we are discussing small, family firms.
Trackside bookmakers are asking for nothing more than clarity about the assets that they have accrued either through generations of hard work or by commercial acquisition. Let us not forget that some bookmakers in the south-east have spent more than £1 million buying something that they believed they would hold in perpetuity. We want those assets to continue to be recognised as the industry standard, as all concerned have always understood them to be—that is until suddenly last March when the bombshell was dropped on the bookmakers.
For the RCA to use the period of transition between the passing of the Gambling Act 2005 and its implementation as a means to wrest control of the assets of hundreds of trackside bookmakers is a blatant misinterpretation of the Act as it was intended. We have it in our power to set out in clear guidelines for both the RCA and the bookmakers precisely which areas are open to reform under the new legislation, and which areas are not. We, as legislators, have a responsibility to take any misinterpretation of legislation on board and clarify it, not leave it entirely up to the industry. Until the guidance is made clear, the trackside betting industry will remain at an effective standstill. Until we clearly define the parameters of the 2005 Act, many in the industry will not know whether their most important commercial asset, which involves the future of their children and their business, is to be rendered entirely worthless. The situation is entirely unacceptable.
Philip Davies: I agree wholeheartedly with the hon. Lady. As somebody who sits on the Culture, Media and Sport Committee, I recognise the position that she outlines, but if the RCA decides to press on and the Government will not intervene, does she at least agree that the bookmakers concerned should be compensated for the loss of their assets? If she agrees, does she think that the compensation should come from the race courses or from the Government?
Ms Barlow: I agree that should the RCA continue in that way—and I sincerely hope that it will not because it is not a moral route—it should compensate the bookmakers to an amount equivalent not to their current value, but to their value before the bombshell was dropped on them.
Mr. Laurence Robertson: I am mindful of what my hon. Friend the Member for Shipley (Philip Davies) says, but the money for the pitches never went to the race courses in the first place; it went up and down families, or they bought from friends or associates. The National Joint Pitch Council is more responsible than the race courses, is it not?
Ms Barlow: I am going into the details not about responsibility, but about what the RCA plans to do. We must look to the future rather than to the past. However, the RCA is taking the assets. Whatever the responsibility in the past, the RCA will benefit; it is taking a commercial property away from families who have owned it for generations. Therefore, the RCA is entirely responsible. We should all do everything in our power to ensure that the commercial trading of pick-list positions remains where it has always been—not taken in a short-term smash-and-grab raid. It should stay in the hands of the bookmakers themselves.
Mr. Ben Wallace (Lancaster and Wyre) (Con) rose—
Mr. Peter Atkinson (in the Chair): Order. Two Members wish to catch my eye, and I propose to call the winding-up speeches at half-past 10. Will they bear that in mind?
10.25 am
Mr. Ben Wallace (Lancaster and Wyre) (Con): Thank you, Mr. Atkinson, I shall therefore be brief. I shall reflect on the state of the Tote, but first perhaps I should declare an interest. My wife was a working member of the Tote at its headquarters in Wigan, so I had a peculiar insight into the process.
It is time that the Government brought forward their plans for the Tote, because they opened up the process. My colleagues on the Culture, Media and Sport Committee and I have, over the past two years, consistently asked for an update, but we have consistently received the reply, “It’s all right, it’s just about to happen. Don’t you worry,” mainly from the Minister’s predecessor, the right hon. Member for Sheffield, Central (Mr. Caborn)—almost like a bad joke during an after-dinner speech. The replies have continued, but nothing else has.
I remember that way back there was support for the sale of the Tote because of the Government’s assurance that it would be given to racing. However, while we are in a position of paralysis, it is important to consider the advice in 1996 given by the Home Office, when it was under my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), when it reflected on the problems that any change in the Tote’s status would produce. The first point was that the Tote was not large enough for public flotation, and it would be exposed to competitors that would pull it apart. We know that that is still a real fear. Sale by competitive tender, the advice continued, could not be ruled out, but would raise difficulties because of the need to guarantee that the Tote continued to support racing to the extent it had hitherto, which is exactly the case today.
Finally, the advice stated that the option of vesting in a racing body would require examination of whether the grant of an exclusive licence to operate pool betting on horse racing would be appropriate, and that such a licence would have to ensure that the Tote’s profits were applied in the best interests of racing and with the minimum disruption to the Tote and race courses. However, that raised difficult competition issues. If we had only listened 11 years ago to that advice, we would not be in this position.
Anyone who has ever gone to the European Commission or to many other European Union organisations will have had a working relationship with the directorate-general for competition. In my previous job, I had to have a working relationship with that directorate-general, with the Commission and with UKRep—the United Kingdom Permanent Representation to the European Union—which is of course there to battle for Whitehall’s interest in such cases.
It is clear that the team from the Department for Culture, Media and Sport, which the Government put to task in UKRep, was wholly inadequate. The Treasury team has competition expertise; the DCMS team in UKRep was worse than amateur. That is the situation today. Even my wife, who is much brighter and more qualified than me, pointed that out to a board director and to the former Minister, but she was told, “Don’t worry your pretty little head.” I can remember that, and I am sure that the ex-Minister is now worrying his pretty little head.
We must analyse the utter incompetence that has delivered such uncertainty to the marketplace. What will happen to all those workers in Wigan, to the future contributions of the Tote and to that excellent body itself? As a Conservative, I believe that if it ain’t broke, don’t fix it, but we are in a wholly self-created mess with the Tote, and we should not forget the relevant manifesto commitment.
Where do we go now? Looking back at the options that have been on the table, I believe that Viscount Astor’s proposals in 1999, or slightly later, could certainly give us one way out by mimicking a national lottery-style licensing of the operation. We must consider whether to take up that idea or retain the status quo. However, it is time for the Government to produce answers on the Tote.
10.29 am
Mr. Don Foster (Bath) (LD): I congratulate the hon. Member for East Devon (Mr. Swire) on securing the debate, and all right hon. and hon. Members who have contributed to what has been a stimulating discussion. I also join many of those who paid tribute to Tristram Ricketts. He will be sadly missed by racing. Were he with us today, he would remind us how important racing is to the economy, that almost 20,000 people are employed directly by it and that if we take all the satellite industries, including betting, into account, the figure rises to almost 100,000 people. He would also, no doubt, remind us of the study by Deloitte last year, which demonstrated that its contribution to the economy overall is nearly £3 billion, and of the nearly £300 million that is paid annually in taxation into the Treasury’s coffers. More importantly, he would point out how popular racing is with the people of this country. It is the second most popular sport to football, with some 6 million people attending race courses last year alone. Of course, he would remind us that we are the envy of the world because we undoubtedly have the best racing. Eight of the 12 top races are held in this country and even today the nation stops for some of those races—for example, the grand national.
Racing is critical. However, we are talking about the future and, in that respect, it is important to recognise that we have a new regulatory body. I am delighted by the work that has been done in such a short time by the British Horseracing Authority, which is working on some innovative ideas for the timetabling of racing that will be of enormous benefit to the betting industry: if there are more races, there is more opportunity for it to make profits. That should be borne in mind in some of our future debates.
The BHA has also been building on work that has been done, including work to improve the security and integrity of the sport. We should not forget the huge costs borne by the racing industry in terms of guaranteeing the integrity of racing. Some £24 million a year is spent in that particular endeavour. However, many other activities are engaged in, including—importantly, but so far not referred to—education and training and the welfare of jockeys, as the hon. Member for Hove (Ms Barlow) mentioned.
We have to bear in mind that racing has huge costs, and it is important to take that into account when considering issues such as the levy or the future of the Tote. If we want a bright future for a sport that is already successful, we have to ensure that it has the resources coming into it to enable it to develop and grow and to deal with issues including securing the integrity of the sport and increasing prize money, as well as other things that hon. Members mentioned. That is why I am disappointed that the proposal to roll the levy forward for another 12 months—to give another opportunity for debate about streamlining and modernisation to take place—has not been possible and that the bookmakers have forced it to determination.
We are now in a situation whereby the Secretary of State, for the first time since the 41st scheme back in 2002-03, has to decide how to proceed. I urge him and the Minister to make that determination as quickly as possible. The current scheme runs out on 31 March 2008. Everybody knows that in planning the future of a
significant business, time is needed to get the financial planning right. An early determination, enabling us to know what sum is coming in through the levy, is crucial. It is critical that we get a quick determination by the Secretary of State.
Pete Wishart (Perth and North Perthshire) (SNP): Does the hon. Gentleman agree that a reduction in the levy would hit Scotland disproportionately hard? Most of the horses are trained in the south of England, which involves transport costs to Scotland, particularly to the race course in Perth in my constituency which is the most northerly in the UK. If there is a reduction levy, there will be a reduction in prize money, which might be a massive disincentive for horse trainers and owners to come to race courses like the one in Perth.
Mr. Foster: The hon. Gentleman makes a valuable point that I was not aware of. I am grateful to him for drawing it to my attention. No doubt, had he had more time, he would have said how wonderful the race courses in his constituency are, as other right hon. and hon. Members have done. I put on the record how wonderful Bath race course is, lest that be forgotten.
The hon. Gentleman is right. That is why my second plea to the Minister, in respect of his advising the Secretary of State on the determination, is that something is done to ensure that we have a fair settlement. The Minister will be well aware that a determination under the 41st scheme suggested a figure of somewhere between £90 million and £110 million coming in. If that were rolled forward in respect of inflation alone, it would be brought up to some £130 million, which is what is needed.
I hope that the Minister will not listen to the siren voices talking about the woes befalling the betting industry because of the row between Satellite Information Services and Turf TV. As the hon. Member for East Devon so rightly said, that is a separate commercial argument that must be sorted out on that basis and should not, in any way, influence the Secretary of State’s decision. Like many others, I am enormously worried that the legal battles going on between those two companies could end up costing some £5 million, which will be taken away from racing. That is to be regretted.
In making the determination, I hope that the Minister will look carefully at betting exchanges—a new phenomenon—which are not making a fair contribution to racing because of how they are taxed under the current regime. The most important thing of all is time. A quick determination is critical.
The money issue also raises the problem with the Tote. A quick determination on that is equally important. I hear what the hon. Member for Tewkesbury (Mr. Robertson) says about the need for a bit more time—he suggests three months—but if there is very much more time, there is unlikely to be a Tote worth selling, because a large number of people are now leaving it, it is having difficulty recruiting new people and some of its senior staff are leaving. It is critical that there is a relatively quick outcome. I accept his point about getting the deal right, but it must be done fairly quickly.
Mr. Laurence Robertson: The matter needs deciding pretty quickly. My point is that if the Tote is sold on the open market, the jobs that hon. Members have mentioned, including some 500 jobs in Wigan, could all go. All I am saying is that we need a three-month period just for reflection.
Mr. Foster: If the Tote goes to the open market and one of the major firms buys it, the hon. Gentleman is right: there could be a huge loss of jobs, particularly in the north. I hope that a deal can be found under which it is sold as was originally intended—he and I served on the Committee dealing with the Horserace Betting and Olympic Lottery Bill—and goes to a racing consortium so that it is kept within racing. That is what we were promised and what we understood we were signing up to. As I mentioned in an intervention, if it is at all possible I want the Minister to give a commitment that at least 50 per cent. of money from the sale of the Tote will go into racing.
On the list pitches, I agree with the contributions of the hon. Members for Livingston (Mr. Devine) and for Hove. Everybody to whom I have talked is convinced that that was a separate issue, with the rent on one hand and the asset on the other. There was no understanding that the asset was being given up or that the five times rule was going, with people saying, “Yes, that was understood. It’s time to prepare for it.” There was no understanding that the asset was going. I welcome the Minister’s trying to knock heads together to find a solution. I know that the Culture, Media and Sport Committee is also considering this issue. I hope that he can give us some information as to what progress is being made. It is critical that we get a solution to that dilemma as well.
Racing is critically important to this country. It is loved by millions and it has a bright future. However, a number of vital issues have to be resolved. The Minister has got a big job on his plate, because a lot of the decisions fall to him. I wish him the best of luck, but I hope that he will take racing’s interests into serious consideration in making his determination.
10.39 am
Mr. Tobias Ellwood (Bournemouth, East) (Con): It is a pleasure to follow the hon. Member for Bath (Mr. Foster), who, as always, spoke with expertise on the matter. I congratulate my hon. Friend the Member for East Devon (Mr. Swire) on securing this timely debate, which has been interesting and stimulating. I join him in paying tribute to Sir Tristram Ricketts, who played such an active role over four decades in the very subject that we are talking about.
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