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Lord Moynihan moved Amendment No. 31:

Page 9, line 15, leave out "it or the Secretary of State thinks" and insert "is"

The noble Lord said: Amendment No. 31 has been grouped with Amendment No. 32 for the benefit of the Committee. The purpose of Amendment No. 31 is to limit the actions that the Tote can take before it is nationalised to what is "necessary". In many respects this is a technical amendment, the purpose of which is to put in place a check on the actions of the Tote before it is nationalised and to ensure that, as far as possible, it remains true to its aims until it is nationalised.

I believe that the wording of subsection (1) of this clause may be too broad. The Tote has agreed to be nationalised as a way of ensuring its subsequent privatisation, and for no other reason. Thus it follows that the Tote will want to do all it can to help facilitate such a sale. That begs the question of why primary legislation is necessary for the Tote to prepare for its own sale in the first place. I recognise that certain actions will need to be undertaken to ensure a smooth and seamless transition, but as always there should be sensible checks and balances in place. I do not think it sensible either for the Tote or the Secretary of State to be given carte blanche. It would be helpful if the Minister could explain why the Government feel that they need this clause and why the wording is so wide-ranging.

I am also concerned that Clause 11(2)(b) gives the Secretary of State power over the Tote before it is nationalised. Returning to the point I have just touched upon, I see no reason why this power should be granted to the Secretary of State. As we come to the end of our consideration of Part 1, it is important not to forget that the Tote is prepared to be nationalised on what I take to be the explicit understanding that it is subsequently privatised. If that is the case, the Tote will do whatever it feels is necessary to bring about that

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nationalisation. If there is any dispute about how best to bring about the nationalisation, I cannot believe that it would be best sorted out by resorting to primary legislation.

If the Secretary of State cannot convince the Tote to do something which is in its own best interests, it is likely that it would not be in the best interests either of the Tote or, indeed, of racing. I hope that noble Lords will agree that, given the knowledge and expertise available on the Tote board, the Tote is better placed than the Secretary of State to decide what is best for itself and for racing. Therefore I ask the Minister kindly to inform the Committee of any circumstance in which he envisages that the Secretary of State might have to use her powers as outlined in subsection (2)(b).

Also, we heard earlier that the Bill makes provision for the sale of the Tote. As we know, there is no deadline for such a sale. If he has not already done so, can the Minister clarify today, as opposed to repeating what a Minister said in another place, whether the Tote will be nationalised as soon as the Bill receives Royal Assent, or whether the Government will wait until a deal has been brokered with the Racing Trust or, under the Bill as drafted, any other buyer? If the Government are unable to sell the successor company to a racing trust, there may well be a delay before the Tote is nationalised.

The Explanatory Note on Clause 11 states:

"This clause enables the Tote or the Secretary of State to do anything necessary to facilitate the sale of the Tote".

I am not certain that that is necessarily in the best interests of racing, although I look forward to hearing the Minister's opinion and hope to be convinced by his assurances.

It may be opportune to use this amendment to reiterate the position of Her Majesty's Opposition on Part 1. As a result of close consideration of the statements made by the Minister during the first sitting of the Committee and today, the Committee will recall that scrutiny of the Bill demonstrated that there was no current advice from the European Commission regarding the proposed state aid to the shadow Racing Trust, while there is no reference in the Bill to a requirement that the Tote be privatised; nor any limit on the time for which the Tote can remain a nationalised industry; nor reference to a shadow Racing Trust; nor mention of a price or pricing formula to be used in privatising the Tote.

Indeed, attempts to set parameters for the privatisation of the Tote were rebuffed when the Minister rejected an amendment in the name of the noble Lord, Lord Lipsey, supported, as it was, across all political parties participating in Committee. Accordingly, we give notice to the Government that we on these Benches consider that the Tote's future may be best preserved in its current form, rather than by being thrown on the mercy of the Treasury to sell to whomever it wishes at whatever price without a statutory commitment to ensure that racing benefits from the privatisation, which is what we seek.

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We very much hope that we will not need to recommend that approach, but we fear that we will. If we do, we will return to the House later with a clear commitment to privatise the Tote and to ensure that racing remains the beneficiary. I beg to move.

5.30 p.m.

Lord McIntosh of Haringey: The noble Lord, Lord Moynihan, certainly broadened out the argument on what is a pair of rather limited amendments. I do not want to go over what I said on the first day of Committee, other than to confirm it. The changes will be implemented only once we are ready to finalise the sale. That is the response that he seeks. Oddly enough, the amendments are based on a misunderstanding—it is not simply a question of whether they are necessary.

Amendment No. 31 would deprive the Secretary of State of the power to help the Tote in confirming its powers to undertake preparations for the sale, where there could be some doubt as to the Tote's powers or what actions are necessary for the sale. The intention of Clause 11(l) is to provide the Tote with sufficient vires to prepare for its own sale and demise as a public body—actions which are not, of course, in the Tote's powers and functions as described in the 1963 Act.

Clause 11 also provides for the Secretary of State to have a role in preparations for the sale where there might be some doubt about the Tote's power to undertake preparatory actions. In those circumstances, the Secretary of State could inform the Tote that she believed that it could undertake particular actions and that would be enough to give it vires, even if the Tote board had doubts. The clause is intended to help the Tote, not to interfere with its actions.

Amendment No. 32 would remove the Government's power to direct the Tote to make preparations. I think that the noble Lord, Lord Moynihan, will acknowledge that all governments, now and in the past, have always had a positive relationship with the Tote. There has never been any interference by government in the operation of the Tote business, and this Government do not want to interfere now. The review of the Tote was driven forward by the chairman, Peter Jones, and the Government have fully respected the expertise of the Tote's board and leadership.

The powers that we propose in Clause 11(2) are precautionary. The Government expect to continue their effective working relationship with the Tote and to proceed whenever possible by consensus. But it would be irresponsible not to take powers in the Bill that may, in extreme and unlikely circumstances, be necessary to protect the interests of the taxpayer and the public.

Clause 11 will therefore ensure that all the required preparatory work done in connection with the sale can be undertaken. It is important for the smooth passage of the sale as soon as possible. It would be irresponsible to accept the amendments.

Baroness Noakes: Can the Minister help the Committee to understand what those extreme

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circumstances might be? My noble friend suggested that they were in effect to enable the Government to sell the Tote other than to the Racing Trust. Such extreme circumstances are a cause of concern. Do the Government have any other extreme circumstances in mind?

Lord McIntosh of Haringey: No. I answered that question several times during the first day of Committee. Yes, in the end, if a sale to the Racing Trust falls through, there is a reserve power to sell the Tote on the open market. But that is not our intention; we would not do that to the disbenefit of racing.

I heard the noble Lord, Lord Moynihan, repeat his threat that he would prefer the Tote to stay as it is than for it to be sold other than to the Racing Trust. That is a dangerous position to take. I will gladly debate it with him at Report stage, but it is not appropriate for me to do so by repetition. That is not what is involved in the amendments. Extreme circumstances would arise if something went wrong with the relationship between the Government and the Tote. That has not happened, but it could go wrong due to changes of personality or personnel. All sorts of things could happen and we must provide for them in legislation.

Baroness Noakes: The Minister should understand that it is not only my noble friend Lord Moynihan who would rather have the Tote stay as it is if a sale to the Racing Trust fell through; probably the whole of racing would prefer that. So it is not an extreme position on the part of my Front Bench colleague.

Can I clarify that paragraph (b) of subsection (2) is there only to deal with the circumstance of the Government needing to direct the Tote for a sale other than to the Racing Trust? The Minister has not offered any other circumstance in which that power of direction would be needed. Is that power of direction there only to facilitate a sale other than to a racing trust?

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