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Lord McIntosh of Haringey: I appreciate that there a number of people in this country who feel about racing the way that Bill Shankley felt about football—that it is more important than simply a matter of life or death. There may even be people in the Committee who feel that way. Certainly people are putting forward that point of view with considerable clarity and incisiveness.
Alas, we have a deal here—the only one that is on the table. It is not only a question of dealing with the Office of Fair Trading: we are dealing with issues of state aid and competition which go wider than the views taken by the Office of Fair Trading at any one time. On the one hand, we have to establish something that is not so permanent as to offend against, I say to the party opposite, the efficient operation of capitalism. It cannot be a permanent solution; ultimately, we will have to get back to a competitive market. On the other hand, we cannot have a period so short that it will not work. So the deal that we have is seven years and no extension.
My noble friend Lord Lipsey said in January that if we cannot sort things out in seven years then we do not deserve to be in business. He has said virtually the same thing now, and he is right. I am afraid there is no give on this. We cannot go back on something that has been accepted, I thought, with a considerable degree of
relief. We can go forward and protect support for racing and pool betting in its present form for a period of seven years, but we cannot allow that protection to continue.
Lord Moynihan: One of our purposes is to put proposals to the Government to learn whether there are strong reasons why the "only deal on the table", in the words of the Minister, should remain the only deal. While I welcome the period of seven years as a step forward in another place, I have not heard any arguments from the Minister which persuade me that there would not be a significant benefit in allowing a future Secretary of State to consider issues such as those set out in Clause 9(1)(c)(i), (ii) and (iii), including the best interests of the punters, horseracing and social welfare. All those matters should be considered at the time an exclusive licence is renewed.
Indeed, that is the precise intention of noble Lords in tabling their various amendments. I have not heard an argument about why there would not be merit in seven years' time in giving some flexibility and freedom to consider such issues to a successor Secretary of State—or even the existing Secretary of State should she still be in post, which is highly unlikely.
If possible, can the Minister explain why this is the only deal on the table and why there is no merit in the cross-party views that have been expressed to allow a future Secretary of State to take into account all the relevant factors when considering a renewal of the exclusive licence for pool betting?
Lord McIntosh of Haringey: The noble Lord refers to cross-party views. It is on a cross-party basis that we are members of the single market. As members of that single market, we have to respect the need to adhere to the rules of the single market concerning the freedom to provide services of any body able to do so. For this purpose, an exception has been made to that rule. It has been negotiated that the freedom to provide services shall be postponed for a period of seven years. That was quite an achievement in negotiation, but it cannot continue forever.
Lord Moynihan: Can I press the Minister a little further? Has he discussed with the Commission whether or not there would be a possibility of removing the prohibition on renewing the exclusive licence for pool betting? Has he sat down with the Commission and asked, within the context of the negotiations over state aid to which he referred, whether the period could have been eight years, three years or 10 years? Has the Commission made it absolutely clear that, to quote the Minister, "within the rules of the single market", there is no flexibility as to the measure on the face of the Bill?
Lord McIntosh of Haringey: One could debate with the Commission any variation we like, but the fact is that we have reached a deal that has been agreed as a success for the successor company, the Racing Trust.
Any further extension is not available to us. I shall not go into the detail of the negotiations on any of these particular issues.
Viscount Falkland: For the information of the Committee, in the context of the European Union, what are the plans for any other European Union countries such as France—whose Pari Mutuel system has also operated since around 1928—Germany or Italy? Have similar views been expressed by important bodies that the tote monopolies in those countries are anti-competitive?
Lord McIntosh of Haringey: I do not know. I do not think that is relevant either to this amendment or to our policy making. I am saying that we have a deal here which is acceptable not because it has been forced on us but because we think it is right. We have considered all the possibilities and we have negotiated our position at length. We negotiated between two opposites which, if we had not been successful in our negotiations, could have killed the whole project. In addition, I hope that it will be recognised that our deal, that of a seven-year, non-renewable licence, gives certainty to the successor company, the Racing Trust. What is being proposed would take away that certainty, which would be undesirable in its own right.
4 p.m.
Lord Moynihan: I am sorry that I need to do this, but in scrutinising the clause and the Minister's response, I would be grateful if he could help the Committee a little further. It is absolutely clear that in certain European countries—the noble Viscount, Lord Falkland, was correct to cite the Pari Mutuel—the situation, certainly in France, is one of a national monopoly. That national monopoly is accepted by the Commission, otherwise it would have taken action by now. In his response to the amendments, although I may have been misguided in my interpretation of his remarks, the Minister gave the impression that this was the only deal on the table because, in negotiation with the Commission, there was simply no room for manoeuvre. Whether for reasons of state aid or the nature of the negotiations, there was no room for manoeuvre.
I hope that the Minister, in replying to me, understands that we have a problem in trying to address why the Commission, so far as concerns the United Kingdom, should not allow the renewal of an exclusive licence for pool betting to be on the face of this legislation while at the same time being perfectly content for a monopoly position to continue in France. I may be missing something and if that is so, I apologise to the Minister. However, if he could clarify this particular point, then when we come to future stages of consideration on this Bill, we will know at least what flexibility we have and what room for manoeuvre. If the Commission has taken a specific position on this, one that is clear, set out in writing and beyond which we cannot go, then obviously we would have to take that into account. Clarification on this would be most helpful to the Committee.
Lord McIntosh of Haringey: I am afraid it is obvious that I am not making myself clear. I am not saying that the deal we have has been dictated by anyone, by the European Commission, the Office of Fair Trading or anyone else. The Government believe in competition because we believe in the single market and because we know that rules exist which, if they are breached, create at the very least a risk of challenge. Thus, within government, we have reached this compromise. I am saying that, having reached this compromise which I understand is acceptable to the shadow Racing Trust, it is not in anyone's interest to run the risk of challenge not only from competition authorities, but from anyone not so sympathetic to the cause to which this Committee is devoted. It is our decision. It is the decision we have reached and anything which goes beyond it puts at risk what has been achieved.
Lord Moynihan: I am grateful to the Minister for that clarification. He has moved a long way since his opening response. We are now absolutely clear that this is a position which has been taken by the Government and that they are not constrained by European law or any advice received from the Commission. I think it a great pity that the Government have not allowed themselves the flexibility to remove the prohibition on renewing the exclusive licence for pool betting at some stage beyond the seven-year period when they could take into account the success or otherwise of the operation of the shadow Racing Trust—how much money it has been able to return to racing and how well it has done its job. They would need to consider carefully the issues to which we shall return set out in Clause 9(1)(c)(i), (ii) and (iii). It would have been far preferable to provide, on the face of this legislation, flexibility for the government of the day to take all those factors into consideration before coming to a decision on the renewal of a licence rather than simply to prohibit it now.
However, we have had a good debate on this subject and I am sure that we shall return to it at a later stage. Again, I am grateful to the Minister for his comments. With those indications of our intention to return to this matter, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
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