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Lord Moynihan moved Amendment No. 39:
- Page 11, line 22, at end insert—
The noble Lord said: As drafted, Clause 16(4) seeks to provide the Secretary of State with powers to overrule the Levy Board in designing the transfer scheme for its assets. It may be that the Levy Board and the Government are unable to agree how those assets should be transferred. That possibility exists and I can understand why the Secretary of State would want to have such powers. However, in this case it is important that the House has the opportunity to consider any such decision.
The ECHR considerations are outlined on page 11 of the Explanatory Notes to the Bill, where it states:
I suggest that if the Secretary of State wished to overrule the wishes of the Levy Board, it could be described as a victim. It seems sensible that the Government should protect themselves by ensuring that the Secretary of State's actions "in the public interest" are supported by Parliament. This might be particularly important if the Secretary of State materially benefits from the transfer scheme, which is something that would seriously engage ECHR considerations.
The Committee may be aware of previous parliamentary Answers from the Minister for Sport and Tourism. On 23 February this year, in a Written Answer to the MP for Bath, Mr Foster, he said:
I assume that such a transfer relates to a new independent charitable trust at no cost.
The Minister may recall that he provided me with a Written Answer in which he stated that the Government hoped to be able to transfer for no
In other words, the Government are again asking the Committee to provide them with powers to abolish the Levy Board and transfer its assets, including the National Stud, without an assurance about what they will do with those assets. Will the Minister give the Committee a cast iron commitment that the Government will not retain the proceeds from the sale of the National Stud?
During our previous sitting we discussed at great length whether the Government would sell the nationalised Tote to the highest bidder if the Racing Trust were unable to buy it. I hope this will not be a repeat of that. There is nothing to prevent the Government going down this road. If that is the case, it is unacceptable.
The Minister may argue that there is a check already in place under subsection (6), but the sale of the National Stud to another stud operator for a profit could fall under the improvement to breeds of horses—I may be wrong—and I would be grateful if the Minister could clarify the position. I hope the Minister will ensure that there is a check in place on the Government's ability to overrule the Levy Board in drawing up a transfer scheme. I beg to move.
Lord McIntosh of Haringey: Again I have the unenviable duty of responding to the amendment and not to the speech, which are rather different things. Clause 16 establishes the procedures that will have to be followed when the time comes to transfer the Levy Board's assets. A lot can happen between now and the time of the Levy Board's closure and we have to keep our options open. Therefore Clause 16 does not stipulate to whom or when the assets will be transferred.
As I have already said, the most significant assets are the Horseracing Forensic Laboratory and the Capital Fund. Our intention is to transfer those assets to the British Horseracing Board, but we need to maintain the flexibility to do what is appropriate in the circumstances prevailing at the time. As is clear from subsection (6), we intend that the British Horseracing Board should use the assets for the same purposes as they are used now. With all the assets, we will adhere to the principle that they are required to benefit racing and should continue to do so for the future.
Our intention is clear. The British Horseracing Board, as the governing body for racing, is currently best placed to administer these assets for the good of the sport as a whole, but if that position changes we will reassess the situation.
As to the amendment itself, I should point out that the Levy Board does not need parliamentary approval now to dispose of its assets. I do not see any need to
Lord Moynihan: I am grateful to the Minister. I said before that we have brought forward a series of probing amendments on Part 2. The Minister has been very clear in his response. I have a great concern about the principle of maintaining flexibility in Part 2, but nothing like as great a concern as I had with regard to Part 1. The Minister's response has been comprehensive and helpful. In that context, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Moynihan moved Amendment No. 39A:
The noble Lord said: We are making good progress and I am sure that the Minister will be equally helpful with Amendment No. 39A, which is designed to ensure that the Government do not use the abolition of the Levy Board to benefit from the transfer of its assets. We have already briefly touched upon the Written Answer from the Minister for Sport in another place, where he admitted that the Government might sell the National Stud and had not yet decided on the use of the proceeds from such a sale.
This is intended to be a simple amendment to ensure that the legislation prevents the assets of the Levy Board finding their way into Treasury pockets. It would, at the same time, be helpful if the Minister could make a statement on what will happen to the £50 million or so Capital Fund which is presently operated by the Levy Board and to which he referred in passing.
Let me give some of the background of the fund. During the past year, the Levy Board approved by way of loans some £10.9 million towards capital projects at racecourses and capital grants of £24.3 million for use in racecourse improvement schemes. Interest-free loans were made available to 12 racecourses in respect of a number of projects involving the improvement of racecourse facilities. The most significant of these were the replacement, refurbishment or extension of grandstands at Chepstow, Sandown Park and York, with smaller schemes at Bath, Brighton, Market Rasen and Uttoxeter.
I feel sure that the Minister will recognise that we seek to ensure that there is no possibility of this money leaving racing. I fully appreciate where he is coming from on this issue—I have heard his commitment to that end—but I am concerned. I have read the response from his noble friend the Minister for Sport in another place and I hope that the Minister will understand my concern.
It is understood that in 2000, from memory, the Levy Board intended that the Capital Fund would be transferred to the British Horseracing Board and that the BHB would then transfer it to a trust under the joint direction of the BHB and the Racecourse Association. Is the Minister able to provide an update—and, it is to be hoped, a categorical assurance—on what will happen to the fund?
I raise this issue in particular because, as I said, at an earlier stage in the Commons the Minister for Sport, Richard Caborn, implied that due to the uncertainty arising from the OFT investigation and the possibility for restructuring the governance of the sport and its commercial activities, it would not be wise to tie the Government's hands by removing flexibility with the amendment.
It is for these reasons that I look to the Minister to clarify the position of the Government today and, I hope, give the assurances that we seek. I beg to move.
Lord McIntosh of Haringey: I have already given many of the assurances that the noble Lord, Lord Moynihan, seeks, but I shall gladly give them again.
It is not our intention to sell the assets of the Levy Board. We intend to transfer them, without consideration, under the terms of the scheme to the appropriate transferee. It is certainly not the case that the Government would deliberately arrange matters so as to benefit from a sale of assets. They were developed for the good of racing and we want to see them continue to be used for the good of racing. We are proposing, subject to everything that I have said already, to transfer the bulk of the assets, including the Horseracing Forensic Laboratory and the Capital Fund, to the BHB, which is in the best position to fulfil the objective. We saw no reason to make this explicit on the face of the Bill because no one has ever suggested that we are trying to make a profit out of it.
As to Amendment No. 39B, paragraph 4 of Schedule 3 is there as a necessary precautionary measure. It would allow the Secretary of State, with the Treasury's consent, to sweep up any rights or liabilities that have somehow been missed by the transfer scheme or in the case that there was no transferee who wished to take on these liabilities. A further example is that the power might be used to settle any potential legal claim that might exist. Paragraph 4 ensures that in these circumstances the Secretary of State has sufficient vires to take on such rights or liabilities.
We cannot predict in the legislation how the transfer schemes will operate in practice or what circumstances will require at the time. It is therefore sensible—indeed, necessary—that the Secretary of State should have this power. I repeat, we are not intending to use this clause for the Government in some way to profit from the dissolution of the Levy Board.
Lord Moynihan: I am once again grateful to the Minister. I hope he will understand that the reason I am tabling these probing amendments is to place on record the intention of the Government, which he has made explicitly clear. For that I am very grateful. I also recognise that, in the context of Amendment No. 39B, which I have not addressed, these rights and liabilities are brought about by agreement. I thank the Minister for focusing on the rationale behind that and for his very clear statements, which are a good deal more lucid than those made by the Minister for Sport in another place. It will be helpful for racing to have the opportunity to reflect upon the statements he has made. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 3 [Horserace Betting Levy Board: Transfer of Property]:
[Amendment No. 39B not moved.]
Schedule 4 [Abolition of the Horserace Betting Levy System: Consequential Amendments]:
"( ) A transfer scheme under subsection (4) shall not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament."
"The power of the Secretary of State under clause 16 to direct the Levy Board to transfer its property and rights under a transfer scheme would engage Article 1 of the First Protocol only if the Levy Board were to be regarded as a 'victim' for purposes of the Convention".
I would argue that it is doubtful that the Levy Board is a victim but, if it is,
"the transfer of such property and rights can be justified in the public interest".
"We will continue to assess the progress being made by the new Board of the Stud, with the support of the Levy Board, towards the point at which such a transfer could appropriately take place, with the proviso that closure of the Stud and sale of the assets remains the fall-back option".—[Official Report, Commons, 23/2/04; col. 38W.]
"No conclusions have been reached about the use of proceeds in the event that a sale becomes necessary".—[Official Report, 22/3/04; col. WA 83.]
Page 11, line 22, at end insert—
"( ) Neither the Secretary of State nor the Treasury may materially benefit from the sale of any specified property, right and liabilities of the Levy Board arising from the transfer scheme."
6.45 p.m.
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