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Written Ministerial Statements

Wednesday 20 February 2008

Environment, Food and Rural Affairs

Offshore Oil and Gas Licensing (25th Round)

The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): I am pleased to inform the House that I am today inviting applications for petroleum licences for unlicensed seaward blocks which will form the 25(th) round of offshore petroleum licensing. These blocks are located in the Strategic Environmental Assessment (SEA) areas 1-7. A map of the SEA areas can be found on the website indicated below, and copies have also been placed in the Libraries of the House.

Strategic environmental assessment (SEA)—post-adoption procedures

BERR’s draft plan to offer licences for offshore oil and gas exploration and production through a 25(th) licensing round was the subject of a strategic environmental assessment (SEA) initiated in 2005. The SEA is documented on a dedicated website—www.offshore-sea.org.uk—;and includes commissioned reports on various components of the natural environment, cultural features and socio-economic considerations. In addition, as part of the SEA new information was collected, for example on selected seabed features through seafloor mapping, sampling and photography, and on the offshore distribution of small cetaceans. The draft plan for the 25(th )licensing round included offering blocks to the west of the Hebrides, and also in those areas that had been subject to earlier BERR SEAs—SEAs 1, 2, 3, 4, 5 and 6—which covered the UK North sea exclusive economic zone and the UK EEZ in the Irish sea and to the north and west of Orkney and Shetland.

The potential implications of the exploration and production activities which could follow if the draft plan was adopted were considered at an expert assessment workshop and a stakeholder workshop. The results of these workshops were assessed further and documented in an environmental report which then formed the basis for consultation with the consultation bodies and the public. The initiation of a 3 month consultation period on BERR’s draft plan and environmental report was advertised in a number of local and national newspapers and by email notification to a wide range of individuals and organisations.

All responses received from statutory and other consultees on the draft plan and the environmental report have been considered by BERR and a post-consultation report for SEA 7 prepared and placed on the SEA website. This summarises consultee comments and BERR responses to them. The full texts of consultee comments have also been placed on the SEA website.

In deciding to proceed with a 25(th) offshore licensing round BERR has considered the conclusions and recommendations of the SEA 7 environmental report together with feedback received from consultees. As a
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result of the SEA process, blocks west of 14 degrees west are being withheld from licensing for the present on environmental grounds.

A number of blocks excluded on the basis of recommendations of previous SEAs, or those currently in the process of appropriate assessment consultation will also not be offered.

The SEA recommended that the blocks in or overlapping with the boundaries of the Moray firth and Cardigan Bay SACs should also be withheld from licensing for the present whilst the further assessments initiated following the 24th Licensing Round applications are concluded. We have therefore excluded 11 blocks in the Cardigan bay area and 10 in the Moray firth.

In addition, 126 blocks will not be offered for licensing in the areas covered by SEAs 1-7 at the request of the Ministry of Defence due to them being intense military test areas.

Licensing of these blocks may be revisited in the future, for example as more information on the features of interest becomes available. In addition, a number of blocks may be licensed but with conditions attached restricting or prohibiting marine activities. It should be noted that the Offshore Petroleum Production and Pipe- lines (Assessment of Environmental Effects) Regulations 1999 and the Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001 variously require that all major activities undertaken in connection with UK offshore hydrocarbon exploration and production include environmental assessment as part of consenting.

Before any licence awards are made, an appropriate assessment will be undertaken to assess whether exploration licences applied for in the 25(th) round will have any adverse effects on the integrity of Natura 2000 sites. This is required under EU Council Directive 79/409 EEC on “The conservation of wild birds” and Council Directive 92/43/EEC on “The conservation of natural habitats and wild fauna and flora’, and UK implementing regulations.

BERR has, with industry and statutory environmental advisors, established an offshore oil and gas environmental monitoring committee which is charged with coordinating the strategic monitoring of potentially significant environmental effects of the industry, including those that could arise from the implementation of the plan to hold a 25(th) round of offshore licensing.

Culture, Media and Sport

47th Horserace Betting Levy Scheme

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Gerry Sutcliffe): As the Horserace Betting Levy Board was unable to accept the Bookmakers’ Committee’s recommendations for the 47th levy scheme, covering the year commencing 1 April 2008, the matter was referred to me to determine under Section 1(2) of the Horserace Betting Levy Act 1969.

In considering the next scheme, I have taken into account submissions from the independent members of the Levy Board, the Bookmakers’ Committee and the
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British Horseracing Authority. In the interests of fairness and openness, these bodies were given the opportunity to comment on each others’ submissions. I have also noted submissions from the Remote Gambling Association, the Sporting Exchange Ltd (Betfair) and the Independent Bookmakers Association. I have taken account of independent advice from Organisation Consulting Partnership (OCP) on those submissions. I am depositing copies of OCP’s report in the House Libraries and sending copies to those who provided submissions, and it is available on my Department’s website. I have also considered carefully the many other representations that have been made to me on this subject by Members of Parliament and others with an interest in the racing and betting industries.

The criteria which have customarily applied to the setting of levy schemes include the needs of horseracing and the capacity of bookmakers to pay. I can confirm that I have taken account of these considerations, among other factors I consider relevant which I refer to below, in reaching a view about how much bookmakers should be required to contribute in order to enable the Horserace Betting Levy Board to give effect to the improvement of horseracing and its other statutory purposes.

The exercise of my responsibility to determine the 47(th) scheme has been made particularly difficult by new considerations introduced by both the British Horseracing Authority and the Bookmakers’ Committee. These include the effect of the growth of betting exchanges, the concept of a fair return to racing given the cultural and economic importance of the sport, the increase in the number of racing fixtures and in integrity costs, and the potential impact on bookmakers’ ability to pay the levy of Gambling Commission fees and subscriptions to the new Turf TV pictures provider.

I have been able to reach a view on some of these new considerations. First, I have concluded that it would not be appropriate to seek to impose the levy on the turnover of betting exchanges rather than on the commission charged on betting transactions. In reaching this conclusion, I was mindful of the Treasury’s conclusion, when assessing whether to impose Gross Profits Tax on betting exchanges turnover, that it was correct to apply GPT on commission only because the commission is the operator’s gross profit and the consumers’ net spend. The Treasury concluded that there was no real justification for changing exchanges’ tax base or tax rate, and I have taken the same view in relation to the levy. Furthermore I am satisfied that any move to broaden the scope of the levy scheme in this way would necessitate a full consultative process, which has not occurred.

Secondly, on the matter of a fair return to racing, I fully accept the cultural and economic value of racing to the life of the nation. However, I consider that this was implicit in the initial creation of a statutory levy scheme.

Thirdly, I have borne in mind the British Horseracing Authority’s claim that the needs of racing have grown, principally due to a sharp increase in the number of fixtures. However, I note that this increase has not resulted in any commensurate growth in betting on horseraces. I am therefore not persuaded that I should make any adjustment in the level of the levy on the basis of the increase in fixtures.

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Fourthly, on the matter of the betting industry’s desire to offset the cost of Gambling Commission fees from the levy, I have concluded that to accede to this would be in effect to pass the regulatory costs of the Commission on to customers in betting shops. This would clearly not be within the spirit of the Gambling Act and I therefore reject this application.

Finally, turning to the issue of Turf TV, I accept that an argument can be put forward that bookmakers’ subscriptions to the new service constitute a commercially based flow of money to racing, albeit only from certain bookmakers to certain racecourses. I therefore accept that it may have a material effect both on bookmakers’ ability to pay and on the needs of racing. However, it is apparent from the failure of the Bookmakers’ Committee and the levy board to agree, and from the OCP report, that bookmakers and the racing industry hold widely divergent views on the status of Turf TV and the impact that it should have on the level of the levy. In time its full economic impact on bookmakers, racecourses and on horse racing generally may become clearer. However, at this stage I consider that it would not be appropriate to take Turf TV into account in setting the level of the 47(th) levy.

Despite thorough consideration, I have not been wholly persuaded by the submissions of either the Bookmakers’ Committee or the British Horseracing Authority, nor have I been able to reconcile their starkly contrasting approaches. It is therefore my decision on this occasion to revert to the 46(th) levy scheme, being the last occasion on which all parties achieved consensus, and to direct that this be rolled over, with adjustments for inflation where appropriate, into 2008-09. This decision is provided for in Section l(3)(b) of the Horserace Betting Levy Act 1969, and in making it I have placed weight on the valuable advice of the independent members of the Horserace Betting Levy Board as a non-departmental public body of my Department.

Accordingly, for off-course betting through licensed betting offices or media platforms—cash, telephone or internet—showing a gross profit on British Horserace Betting Business (BHBB) of £85,700 or more per year, a flat percentage rate of 10 per cent. will apply. Abated charges will apply to any LBO or media platform with gross annual profits of less than £85,700. A minimum payment of £2,144 will apply. The levy for on-course betting will be charged at a flat fee of £188 plus a fixed ring charge of £4 for the silver or minor rings and £8 for all other rings for each racecourse attendance. On-course bookmakers who use and/or operate a betting exchange will also be liable to pay the levy at a rate of 10 per cent. on their gross profits derived from BHBB. The levy payable by bet brokers including betting exchanges will be charged on a basis equivalent to 10 per cent. of their gross profits, defined as commission on BHBB deducted from the winnings paid out to bettors and bet-takers. Spread betting business will be charged at 2 per cent. of gross profits, and bookmakers who conduct betting on point-to-point and/or harness racing and/or trotting events will pay a fixed levy contribution of £150.

The determination concluded, I wish to add that it is a matter of serious regret to the Government that we have again found ourselves in the position of having to make a determination when it would clearly have been more appropriate for the betting and racing industries to have agreed a suitable settlement between themselves.
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We have repeatedly encouraged the two industries to develop a modern relationship as business partners and move away from an adversarial approach. Representatives of both sides now need to proceed to detailed commercial negotiations without delay. To this end I am convening a meeting, under the auspices of the all-party racing and bloodstock industries group, to initiate discussions on a wide range of issues.

Foreign and Commonwealth Office

Explanatory Memorandum on the Lisbon Treaty

The Minister for Europe (Mr. Jim Murphy): The Explanatory Memorandum on the Lisbon Treaty stated that the treaty extended qualified majority voting (QMV) in a total of 50 articles.

It should have stated that there were 51 articles, including the move to QMV on the statute, seat and operational rules of the European Defence Agency (EDA). My right hon. Friend the Secretary of State for Defence set out this move to QMV in a written answer to the hon. Member for Woodspring (Dr. Fox) on 28 January, reprinted below. My right hon. Friend the Secretary of State for Defence has also provided oral and written evidence on the EDA to the Defence Select Committee.

We have provided the Vote Office with a corrigendum.

(Official Report, 28 January 2008, column 38W)

EU Defence Policy

Dr. Fox: To ask the Secretary of State for Defence in which areas of European Security and Defence Policy the Lisbon Treaty will introduce qualified majority voting; and if he will make a statement. [182335]

Des Browne: The Council will continue to act by unanimity among member states on all aspects of European Security and Defence Policy except for certain procedural items in respect of permanent structured co-operation and the European Defence Agency. The Council would act by qualified majority voting (QMV) when establishing permanent structured co-operation and when determining the list of participating member states, including when deciding on the participation of a member state that subsequently wishes to participate or suspending the participation of a member state which no longer fulfils the criteria or its commitments.

In the context of the European Defence Agency, although the treaty provides for the adoption of a decision on the Statute, seat and operational rules of the agency by QMV, these matters have already been decided upon under the joint action establishing the agency. We
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therefore do not anticipate any further need for decisions in this area.
The “passerelle” clause, which allows the European Council unanimously to decide to adopt a decision by QMV does not apply to decisions having military or defence implications.

Work and Pensions

Correction to Written Answer

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): I regret that the answer I gave to the hon. Member for South-West Bedfordshire (Andrew Selous) on 4 February 2008, Official Report, column 863W was incorrect, as it did not include a letter from Social Fund Commissioner, Sir Richard Tilt.

Letter from Sir Richard Tilt, dated 4 February 2008:

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