| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord Moynihan moved Amendment No. 14:
- Page 5, line 32, after "on" insert "such"
The noble Lord said: I do not wish to detain the Committee for long, but I want to speak briefly to Amendments Nos. 14 and 15. They are technical provisions designed to ensure that the terms and conditions are those considered appropriate by the successor company to the Tote. Clause 8(5) provides for the successor company to authorise other bodies to conduct pool betting along similar lines to the Tote's current practice. For example, at present the Tote can authorise pool betting operations at point-to-point meetings. It makes sense for that to continue.
The amendments aim to clarify exactly whose terms and conditions will be necessary for the granting of the authorisation in future. I hope that the Government
will see fit to accept these technical amendments, so that the successor company to the Tote is freed up and empowered to set its own terms and conditions through the legislation. The Tote first raised the matter with me some time ago, but I note that it has not been included in its latest briefings. However, as always, the Minister's views on the subject would be most welcome. I beg to move.
Lord McIntosh of Haringey: I can be quite reassuring on the amendments, as I am not clear what benefits would arise from them. We are entirely satisfied that, under Clause 8(5), only the successor company may authorise others to carry on pool betting. It is equally clear that, under Clause 8(6), the successor company, in giving such authorisation, may impose such terms and conditions as it deems necessary, including those listed in subsection (6)(a) to (c). That is not an exhaustive list.
Amendments Nos. 14 and 15 are unnecessary drafting changes. I hope that the Committee will accept that Clause 8(6), when read with subsection (5), is sufficiently clear. I understand that agreement on the matter has been reached between my legal advisers and those of the Tote.
Lord Moynihan: I am most grateful. I will take the opportunity following Committee to reflect and make the comparison that the Minister has asked us to make. However, on the basis that that will clarify the position, and unless other Members of the Committee wish to speak, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Moynihan moved Amendment No. 16:
- Page 5, line 39, leave out from "if" to ", and" in line 40 and insert "a material term or condition of the licence has been materially breached and that breach has not been remedied within 28 days of written notice having been given by the Gaming Board to the successor company notifying it that, if it does not remedy the breach, the Gaming Board may make an order revoking the exclusive licence"
The noble Lord said: In moving the amendment, I shall speak also to Amendments Nos. 17 and 18. I intend to concentrate on the group at rather greater length than the one that we have just considered, because Amendment No. 16 is important and would moderate the proposed powers of the Gaming Board to revoke the successor body's exclusive licence. It is an amendment sought by the Tote, and I am grateful that it has drawn it to the attention of the Committee. It may help if I give some background to the amendment and the subsection to which it refers, which is Clause 8(7).
The Tote's present exclusive licence to run pool betting on horseracing was granted in perpetuity under the terms of the original 1928 Act, which created the Tote as a statutory and self-regulatory body. As the Committee will be aware, the Bill allows the Secretary of State, on an appointed day, to dissolve the present statutory body, vesting the businesses of the Tote into a new company owned by the Secretary of State,
whereupon the licence ceases and is to be replaced by a new one issued and regulated by the Gaming Board for an exclusive period of seven years.There is a long history to the exclusive licence, which should not be dispensed with lightly. As drafted, the Bill gives the Gaming Board the ability to revoke the successor body's exclusive licence if it thinks—"thinks" is very important in the context—that,
- "a term or condition of the licence has been breached".
A similar amendment was debated in another place. At that time, the Minister for Sport and Tourism said:
- "The Government believe that the Gaming Board will have to act reasonably".
- "it is likely that the licence would be revoked only when it was clear that a serious and unjustifiable breach had occurred or was occurring . . . Any such decision would have to satisfy all the usual requirements of public law and would be subject to judicial review".
- "that should give the exclusive licence holder sufficient reassurance that the Gaming Board would not act arbitrarily in this matter".—[Official Report, Commons Standing Committee D, 20/1/04; col. 53.]
The best way to prevent that from happening is by ensuring absolute clarity, well before the legislation reaches the statute book. That is what I hope to achieve with this amendment. I was compelled to make the same point last week in Grand Committee, and I do not hesitate to repeat these words of caution. In this case, it is clear that the Tote does not consider the opportunity for judicial review to be sufficient reassurance.
I feel sure that many Members of the Committee will share that view, not least because it is clear from the original drafting of the Bill that only one exclusive licence will be issued. It is simply unsatisfactory for the Government to give an unelected quango—the Gaming Commission—the ability to revoke and exclusive licence solely because it thinks that a term or condition of the licence has been breached. At the very least, the word "think" must be deleted.
I am sure that Members of the Committee with far more legal expertise than I will correct me if I am wrong, but it seems to me possible for judicial review
to find that the Gaming Commission was right to think that a term or condition of the licence had been breached, although subsequent investigation might show that that was not the case. What would happen in the six months or so while the successor body waited for the outcome of a judicial review? Surely, that uncertainty cannot be helpful for the racing industry as a whole.Can the Minister tell the Committee what will happen if the Gaming Board were to revoke the licence and a subsequent judicial review six months down the line found that the licence should not have been revoked? Would it be possible for the licence to be reinstated in such circumstances? I cannot see how it could be in the manner in which the legislation is drafted. My understanding of the Bill—I will look to the Minister to respond on this point—is that once the licence has been revoked, it cannot be reissued. I would be grateful if the Minister could clarify that point.
It is for that reason that sufficient checks and balances in the power of the Gaming Board must be put in place. The wording of subsection (7)(a) provides the Gaming Board with draconian powers. It is simply not acceptable for the Government to say that these are countered by the ability to take decisions to judicial review—as they argued in another place.
The terms of a judicial review should be limited by the primary legislation. It is therefore essential that we make sure the legislation is fit for purpose. It also seems eminently sensible that there should be an opportunity for the successor company to make good a breach in the terms of the licence.
Finally, I want to highlight one further point which Amendment No. 16 seeks to address. Given the severity of the penalty—that is, the removal of the exclusive licence—any breach which would trigger this penalty should at least be deemed to be material. The amendment is thus drafted to include the insertion of the word "material" to describe the breach of any terms or conditions of the licence.
In conclusion, subsection (7)(a) appears to be a casualty of over-hasty drafting. In too many cases legislation drafted in haste gives ample scope for repentance at leisure. I hope that the Government will avoid this pitfall and accept the amendment.
Coupled with this, I have also taken the opportunity to address the important issue of putting in place a parliamentary check on the ability of the Secretary of State to revoke the exclusive licence when the successor body is owned by the Crown. As the Bill is currently drafted in subsection (7)(b), the Secretary of State can instruct the Gaming Board to remove the exclusive licence from the successor body when it is owned by the Crown. I should be grateful if the Minister can explain the purpose of Clause 8(7)(b) and exactly why the Secretary of State needs the power to remove the exclusive licence over and above the powers of the Gaming Board.
Given that subsection (7)(b) can apply only when the successor body is owned by the Crown—which, in the Minister's own words, should be for as little as a few hours—it is surprising that the Government have
decided that they need this power. It would appear that the underlying rationale for this additional power is more political than practical. For example, it would apply in the event that the Government change their mind about the desirability of granting the successor body the seven-year licence. If this is indeed the case, it is important that any political decision to remove the seven-year exclusive licence is subject to parliamentary approval. The amendment would put in place the requirement for that approval.In the whole of this context there are opportunities for us to consider the procedures by which the Gaming Board can revoke the exclusive licence. I touch upon that because it is relevant to the amendment standing in my name. I have come forward with a clear technical amendment, originally suggested by the Tote, which sets out the procedures by which the Gaming Board can revoke the exclusive licence. It is designed to complement our earlier amendment requiring that the Gaming Board gives notice to the successor company before the removal of its exclusive licence.
I note that in another place, the Minister for Sport and Tourism said that there might be cases where an immediate revocation of the exclusive licence would be required for the protection of the pool-betting public. He stated:
- "On the other hand, it is likely that the licence would be revoked only when it was clear that a serious and unjustifiable breach had occurred or was occurring. In such cases, there might need to be an immediate revocation of the licence for the protection of the pool-betting public".—[Official Report, Commons Standing Committee D, 20/1/04; col. 53.]
I should be grateful if the Minister would expand on his colleague's comments to give an example of the kind of breach envisaged.
We need to be very clear on what the powers of the Gaming Board to demand an immediate revocation of the licence would mean in practice. It should not mean that the successor company would no longer run a pool betting operation at all. Rather the market would open to other competitors. It is very unlikely—indeed, I would argue, hardly possible—that the bookmakers or other companies would be able to set up pool betting operations overnight. It would take time to set up such a new operation.
So, even if the exclusive licence was revoked overnight, thereby bringing to an end 76 years of tradition, the successor company would still be able to run pool betting and it is likely that its monopoly would continue for a period of time before other competitors entered the market. Given the harsh nature of the Gaming Board's powers under subsection (7), the proposals from the Tote seem eminently sensible. I hope that the Minister will be able to convince the Committee that this amendment and several others are unnecessary. I am sure that the Tote looks forward to a similar reassurance. I beg to move.
4.15 p.m.
Lord Lipsey: The shadow trust, which I chair, supports the amendments that the Tote has put forward to the Committee. Let me briefly explain why.
The theme of today's debate on the Bill has been, "It is seven years. It is nothing but seven years. It is the whole of seven years". That is what the Minister has rested on and what the Bill has rested on. So when there was a question of whether it started before or after, the Minister reassuringly said, "We intend it to be from the appointed day".
However, we find in the Bill that it is not seven years come what may; it is seven years unless one morning the Gaming Board decides to stand up and say, "It is not seven years after all. Indeed, it stops tomorrow morning". There is a very unsatisfactory logical contradiction in that which the amendments are designed to tackle.
The noble Lord, Lord Moynihan, pointed out that the Minister in another place defended the provision on the grounds that there could be judicial review. However, I was surprised to hear the noble Lord refer to it taking six months; he has obviously had different experiences with the legal profession than I have. It is more six months knocking on 18 months, one might say. What happens if, five and a half years into the exclusive licence that is supposed to last seven years, the Gaming Board gets a rush of blood to its head and throws out the exclusive licence? After seven years, we cannot go on having an exclusive licence anyway. In that case, the seven years sacrosanct in the Bill, because that was the deal, would not be seven years at all but five and a half years, with no protection against it.
The final anorak point that I make is that we have to negotiate the deal. When the deal is negotiated, there will then follow the usual process of due diligence. That will be applied because those who will fund the deal—it will essentially be funded by debt on the Tote's balance sheet—may have to look with extreme clarity at whether the proposals in front of them are watertight. If I were one of those lending the money, I would say, "Hang on, you told me that I was lending on seven years but it turns out that it might be five years, three years or one year, depending on whether the Gaming Board does the right thing or not. I don't think I like that deal". An immense amount of time will be taken that, at the very best, could be more profitably spent. However, if the Gaming Board is fussy and the Minister unyielding, that could make it harder and slower to complete the deal, and we are all eager that we get that done as soon as possible.
I ask the Minister, if not to consider the full letter of the amendments, at least to indicate that he is sympathetic to the problems posed by the noble Lord, Lord Moynihan, and me, and that he and the Government will in some way be willing to come back in future and address them.
Next Section
Back to Table of Contents
Lords Hansard Home Page