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Lord Moynihan moved Amendment No. 39C:
- Page 35, leave out lines 43 and 44.
The noble Lord said: Again, this is a probing amendment. It is designed to satisfy my interest in why the Secretary of State should still retain power over the setting of the fees for approval of racecourses. There may be a very good and simple reason for this—I may have missed it—but, on reading the Bill, it struck me as rather strange that, given that I thought we were all agreed that the Government's role in racing should be scaled back, this remained on the face of the Bill. I thought the cutting back of the Government's involvement was the whole purpose of Part 2 of the Bill.
I may have missed the specific reason for this when I was reflecting on the amendment and I should be very grateful if the Minister will explain why the Secretary of State should still set the fees for the approval of racecourses by the Gaming Board. Why cannot this responsibility be passed down for the Gaming Board to decide? It does not help that the Explanatory Notes to the Bill do not seem to cover Schedule 4.
One of the reasons I am worried about giving the Secretary of State the power to set the licence fees is because of recent experiences with the Licensing Bill. The Government have consistently delayed issuing guidance to local authorities. However, the Minister may be able to give a simple explanation to the Committee. I beg to move.
Lord McIntosh of Haringey: It is certainly the case that the Levy Board does not charge racecourses for their certificates of approval, but the board exists to benefit racing and it has opted to take this approach as part of its service to the sport. That is its privilege.
The Gaming Board is a completely different body and its successor body, the gambling commission, will in due course also be a completely different body. It will take on a new regulatory burden in addition to its current responsibilities. It seems to the Government wholly appropriate that the Gaming Board should be able to charge racecourses for the necessary regulation of betting activities carried out at racecourses for the protection of the public. This will put racing exactly on a par with all other forms of gaming and, when the gambling commission is formed, all other forms of gambling.
In case anyone should think that the Treasury is making off with the fees, the Gaming Board will receive a notional amount from the department's vote to cover the cost of regulation. The fees charged will cover those costs and they will go back into the Consolidated Fund or appropriated in aid of the department's vote. That is what happens with other regulatory functions exercised by the Gaming Board, which of course was set up by the Gaming Act 1968.
It is an important service, one comparable to other regulatory services provided by the Gaming Board and is the means by which bookmakers are able to stand at courses. It cannot be unreasonable for the Gaming Board to charge for it.
Lord Moynihan: I am very grateful. I thought I may have missed something. When the Minister has the opportunity to read Hansard he will see that my interpretation was that the Secretary of State would set the fees rather than the Gaming Board. It has now been made extremely clear to me by the Minister that my objective is already satisfied on the face of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 39D not moved.]
Lord Moynihan moved Amendment No. 40:
- Page 12, line 26, at end insert—
The noble Lord said: I am happy to speak to this amendment, which is very similar to that tabled by my noble friend Lord Soulsby of Swaffham Prior. However, I am grateful to the Chairman of Committees for clarifying my error.
In explaining the reasons behind these amendments, perhaps it is best to quote from page 28 of the Government's own regulatory impact assessment:
While everyone recognises that the levy is an anachronism in today's market, its abolition will, first, reduce the moneys going to racing from the bookmakers because they will have to pay VAT and, secondly, increase tax revenue to the Exchequer. It seems a tad unfair to describe this as a stealth tax, but nevertheless racing and the bookmakers who help to support racing will have to pay an estimated £16 million in extra tax.
While of course I am concerned about the financial situation of bookmakers and the value their business brings to the UK economy, what is of greater concern is the effect of these measures on horseracing. It is likely that the new tax liability of £16 million will mean that bookmakers reduce their payments to racing by that sum. The purpose of my amendment, therefore, is to encourage the Treasury to recognise that this £16 million a year windfall is money that would otherwise have gone to racing and to consider its position accordingly.
I am all too well aware that this House should be reluctant to interfere with tax matters since the other place has precedence in the area. Nevertheless, I am also aware that there may be problems with European laws about VAT and that there is a danger that this amendment may not be permitted. If that should be the case, then I look forward with interest to learn the Minister's own standpoint, irrespective of European law. I say that because it is important to draw this increased taxation to the attention of noble Lords. I hope that the Minister will surprise us with a positive response.
I am also very pleased to note that my noble friend Lord Soulsby of Swaffham Prior supports this amendment. I anticipate—rather later in the day than I had originally imagined—that my noble friend would deal with the greyhound racing aspects of this matter covered in the grouped amendment. I beg to move.
Lord McIntosh of Haringey: There is very little that I can say because the noble Lord, Lord Moynihan, knows the position. This is not particularly a matter of the relationship between the House of Lords and the House of Commons. We are perfectly free to express our views, but we are slapped down when they go back to the Commons. Here, however, the noble Lord has really answered his own amendment.
Amendment No. 40 proposes a zero rate. However, we have longstanding agreements with our European partners that we do not introduce any new zero rates and we do not seek to extend those that already exist. There have been and are exceptions under Article 8, or Article H, of the Sixth Directive, but they have been very well publicised and our negotiations in most cases have been unsuccessful. That is for the simple reason that once we open that Pandora's box, we are likely to lose more than we gain, something which we are not keen to do.
I turn to Amendment No. 41. Payments made through the existing statutory levy scheme are outside the scope of VAT, as the noble Lord, Lord Moynihan, rightly pointed out. They are not commercial
Under the fundamental principles that govern the VAT system, it would not be appropriate to treat a commercial consideration for the exploitation of data rights as if it were a statutory levy. VAT is chargeable on supplies of data rights, as it is for the vast majority of goods and services purchased commercially in the United Kingdom.
I am afraid that the same difficulty arises with Amendment No. 40A, with the additional problem that it proposes an exemption for greyhound racing. This is a horserace betting Bill and it cannot be used to introduce provisions relating to greyhound racing.
Lord Soulsby of Swaffham Prior: I should like to speak to Amendment No. 40A. I am glad that my noble friend Lord Moynihan has dealt with the issue of value added tax. I am no expert on those matters.
I have tabled the amendment to support the very worthy enterprises associated with racing. While I take the Minister's comments that this is a horseracing Bill, a very substantial proportion of the income of bookmakers is derived not from horseracing but from greyhound racing. Through the Bookmakers Afternoon Greyhound Service—BAGS—system, substantial funds are generated through races associated with greyhounds.
Amendment No. 40A seeks, among others things,
Through the Horserace Betting Levy Board, a conscious effort is made to deal with the improvement of racehorses and to address the fate of horses when their racing life is over. Some 4,000 horses per year leave the tracks and go into retirement of one form or another. The vast majority are well cared for, but some rely on charitable intervention from the charity, Retraining of Racehorses, which receives support of £50,000 per year.
I have added a paragraph relating to,
Mr Tom Kelly, the chief executive of BAGS, stated in a recent article in the Greyhound that:
I think that the "obvious" which has been overlooked here is that some accommodation should be made for greyhounds following their useful track life. Given that so much money is generated in the betting area by bookmakers, it is realistic and only fair that an improvement to this aspect of greyhound racing should be accommodated. Greyhounds should be supported following their retirement from the racing track.
Lord McIntosh of Haringey: It occurs to me that I have been unjustly dismissive of that part of the thinking behind the amendment spoken to by the noble Lord, Lord Soulsby. It was necessary for me to repeat that this is not a subject in which we can opt for a zero rating of VAT, just as it was necessary to make the point that greyhound racing is not covered by this Bill. The noble Lord was good enough to recognise that.
However, the welfare of greyhounds is a serious issue and deserves close attention. Not only my department, but Defra too is very much concerned with this matter. Officials are holding discussions with representatives of the betting and greyhound racing industries, looking at ways to provide extra funds for what is undoubtedly a worthwhile cause; that is, the future life of greyhounds when they finish racing. I acknowledge the work of the noble Lord, Lord Soulsby, in this area and I am grateful to him for raising the issue, even though I have to say that it is formally outside the scope of the Bill.
"( ) The Treasury shall make regulations providing that the payments from bookmakers for purposes conducive to any or more of the following—
(a) the improvement of breeds of horses,
(b) the advancement or encouragement of veterinary science or veterinary education, or
(c) the improvement of horse racing,
shall be subject to a zero rate of Value Added Tax."
"The abolition of the statutory levy will have benefits for the Government. Commercial payments will generate VAT receipts. The 42nd levy scheme is projected to yield approximately £94 million. Were these payments made commercially, there would be a VAT charge of £16.4 million".
"the improvement of breeds of horses",
an issue which was dealt with earlier. It covers also,
"the advancement or encouragement of veterinary science",
which could apply both to racehorses and greyhounds; and,
"the improvement of horse racing".
"the improvement of greyhound racing",
because both horses and greyhounds are racing animals. Greyhounds form the primary alternative to horses but, to my knowledge, no effort is made to help with retired greyhounds after they have spent two or three years on the racetrack. Indeed, there is great dissension among greyhound authorities about how to deal with the welfare of animals following their racing career.
"It is common sense that the provision of good facilities for the dogs, good veterinary care and good post-racing care is both desirable and a matter that should be high on the sport's list of priorities. But sometimes, when an issue becomes as politicised as this one, the obvious can be overlooked".
7 p.m.
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