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Lord Soulsby of Swaffham Prior: I have great pleasure in supporting these two amendments tabled by my noble friend. The first would deal with the funding of protection and promotion of equine rare breeds. That is an area of our national heritage that should be supported and not lost sight of. As my noble friend mentioned, without the amendment, the Bill does not specify what shall be funded. Neither does it give any guarantee that funding will be safeguarded in either the short or long term.

We in the United Kingdom have more native breeds of horses than any other country in the world. Some of our famous breeds—the Suffolk Punch, the Shire, the Clydesdale and the Cleveland Bay—are in decline. Support from the existing Levy Board to the tune of £130,000 a year is an important source of funding to keep the interest going. Unfortunately, the interest is in the older end of the farming population, who sometimes keep those horses almost as companion animals, rather than as workhorses. Anyone who has been connected with these heavy horses—in my young days as a veterinary surgeon, I did a lot of work with them—will know that they are marvellous creatures.

I hope that the Minister will attend to that lacuna in the Bill through the amendment. I should of course declare that I am a veterinary surgeon and it is possible that I should not be speaking to the fact that my colleagues should be present at a horseracing ground. However, I am sure that your Lordships will recognise the importance of having an animal medical expert at racing grounds. There is often more to be done than appears in the news or on television. Having done it myself, some time ago, I know that those people are extraordinarily busy attending to all things. Someone with expert knowledge should be there.

Both amendments are logical, and I hope that the Minister will respond positively to them.

Lord McIntosh of Haringey: I am grateful for the way in which the amendment has been spoken to and I hope that I can give a good deal of reassurance about it.

Clause 15 provides for the abolition of the Levy Board and the levy scheme. That is at the heart of our plans for reform. That is not in question when we consider the amendments. It will enable us to implement a longstanding policy of withdrawing from statutory involvement in the administration and financing of horseracing. We have had a great deal of consultation and debate on the matter with the betting and racing industries, so we will not continue with a statutory scheme of the sort that we had before.

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However, Clause 16(6) contains full protection for the existing work of the Levy Board. It ensures that,

"any property or rights transferred will be used or exercised for the purpose of—

(a) the improvement of breeds of horses,

(b) the advancement or encouragement of veterinary science or veterinary education, or

(c) the improvement of horseracing".

Those are exactly the same words as the existing requirements on the Levy Board, and we see no need to be more prescriptive in the Bill than we have been satisfactorily for many years. But I assure the Committee that we are in discussion with the BHB about areas in which we would like funding to be maintained. Rare breeds—I am not sure whether it is all rare breeds or rare native breeds—the attendance of veterinary scientists and the issue of long-term contracts are certainly among those areas.

The noble Lord, Lord Moynihan has raised other matters that need to be considered. Let me assure the Committee that nothing will be lost and that the comments that have been made today will be taken very seriously.

Lord Moynihan: I am grateful to the Minister for that response. On Clause 16(6)(a), (b) and (c), we are concerned that the Government should be restricted from using the abolition of the Levy Board to benefit from the transfer of those assets. However, that will be covered in Amendment No. 39 later and it would be inappropriate to raise that now, especially in the spirit of the Minister's supportive comments on the amendments. We will return to that later. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 35 and 36 not moved.]

On Question, Whether Clause 15 shall stand part of the Bill?

Lord Moynihan: The purpose of giving notice of my intention to oppose the Question that Clause 15 stand part of the Bill is to encourage the Government to provide an update on discussions with the OFT and horseracing about the Rule 14 investigation. I agree with the Minister's opening comment. The Opposition, as well as the Government, accept that in today's world, the levy is anachronistic, especially in respect of the Government's role in determining how much the bookmakers should pay to racing in the event of an impasse in the bookmakers' committee.

However—and this goes to the heart of our consideration of Part 2—this is a period of great uncertainty for the racing industry, with decisions of the Office of Fair Trading and the European Court of Justice outstanding. Those decisions could have a fundamental impact on racing. That uncertainty has not been helped by the collapse of the "At the Races" television deal and the need to set up a new television service. There is widespread concern, particularly outside the House, that the OFT may not have a proper understanding of racing and the inter-dependence of its many elements. The original Rule 14

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notice of April last year would, if carried through, lead to the loss of significant income to racing and the closure of many smaller courses.

Robert Hughes said in his chairman's statement from the board's annual report and accounts for the year ended 31 March last year:

"Timing, as the great comedian Jack Benny once said, is everything. It is, therefore, somewhat unfortunate that, just at the moment when civil servants are preparing the draft legislation for the abolition of the Levy Board and the sale of the Tote, the whole future structure and governance of the industry should be thrown into doubt by the intervention of the Office of Fair Trading. The Levy Board, mindful of the Government's legislative timetable, has committed itself to ensure that there is a smooth transition from the statutory Levy to a full blown commercial system for funding racing. This continues to be our aim and will be doubly important whilst the implications of the OFT's findings are worked through by all the parties concerned. I, and my fellow directors, are intent on playing whatever part we can to help resolve the many issues which now face the industry. The Levy Board's only concern is that both the racing and bookmaking industries should continue to thrive and develop, so that they can continue to make a full and positive contribution to our national life and economy".

There is great uncertainty at the moment—the Minister is nodding in assent. The European Court of Justice is considering a reference by the Court of Appeal following a robust High Court judgment in support of the British Horseracing Board's database rights. I understand that that judgment is not expected until the autumn, when it will go back to the Court of Appeal, so the issue may not be resolved until late this year. Those investigations are undoubtedly complex, and it is unclear how they will report. What is clear is that they could have a significant impact on the amount of money that the bookmakers return to racing. In some respects I believe that this Committee, and indeed the House, may have looked differently at Part 2 had it not come concurrently with this huge uncertainty regarding the decisions of the OFT and the European Court of Justice. But we are where we are. In these circumstances we need as much clarity as possible from the Minister about how he sees the future of racing unfolding, particularly the aspects to which I have referred.

We welcome the one-year extension of the levy until September 2006. In parentheses, I would be interested to know how that squares with the Minister's undertaking on the first day of Committee as to tying the hands of future governments. I look forward with interest to hearing, when the Minister reflects on what he said about tying the hands of future governments when we last met, how he sees that square with the extension of the levy until September 2006 and the unfolding of the legislation thereafter.

As we debate this provision to abolish the levy, can the Minister update us on how discussions between racing and the OFT are progressing? I refer in particular to an article published in the Times as recently as 16 March, the first day of Cheltenham, entitled:

"Secret deal to save racecourses".

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It referred to the negotiations between racing and the Office of Fair Trading:

"A breakthrough in negotiations was confirmed yesterday by Whitehall sources".

It continues:

"Senior figures in racing and at Westminster declined to discuss the details of the deal because they do not wish to jeopardise the settlement. But the mood among pro-racing ministers and MPs is upbeat".

The Minister has certainly confirmed his pro-racing colours. In that context, I would be grateful if as part of the Committee's consideration of the future of the levy he could clarify as much as possible the status of discussions, his perspective on how they will unfold and thus how racing will be secure in the future.

Against that background, I give notice of my intention to oppose the Question that Clause 15 stand part of the Bill but do not intend to add anything further at present.

6 p.m.

Lord McIntosh of Haringey: Let me say straightaway that those are entirely legitimate concerns. I shall start with what I hope is common ground; if it is not, we are in serious trouble. Although the levy has served a very useful purpose for more than 40 years, it is no longer appropriate to have a statutory scheme and we must move towards commercial arrangements. We do not have any comparable system for any other sport on which bookmakers take bets, and we know that it can be replaced by a fully commercial system. That will be based on the sale of racing's picture and data rights to the bookmaking industry and, indeed, anyone else who wants to use them.

We then have problems. Although contracts to achieve that are already in place, we accept that the OFT inquiry has cast a shadow over those contracts. The implementation of the Competition Act is, of course, the responsibility of the OFT and the Competition Commission. As the noble Lord, Lord Moynihan, rightly says, we have said that we will retain the Levy Board until September 2006. By that stage, the final results of the OFT inquiry will be known, any appeals should have been resolved, and, if necessary, new contracts should be in place. I have no doubt that those revenue streams, and others available to racing, will ensure that it thrives and continues to be an important nationwide sport.

I do not have any up-to-the-minute update on the situation with the OFT, but I undertake to write to the noble Lord and anyone else concerned immediately before Report with the position as we know it at that time. That should help him with any action that he wishes to take on Report. It is more appropriate for me to do that than to attempt anything now.

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