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Mental Health: Select Committee

The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.

Moved, That the Lord Mayhew of Twysden be appointed a member of the Select Committee in the place of the Baroness Fookes.—(The Chairman of Committees.)

On Question, Motion agreed to.

Horserace Betting and Olympic Lottery Bill

Read a third time.

Lord Moynihan moved Amendment No. 1:


"SALE OF THE SUCCESSOR COMPANY TO THE RACING TRUST
Any sale of the successor company to a body other than the Racing Trust shall not take place unless the sale has been approved by a resolution of each House of Parliament."

The noble Lord said: My Lords, there are many friends of racing in this House who are only too well aware of the valuable contribution that the Tote makes to horseracing at every racecourse throughout the country. It is vital that that support—some £10 million each year—is safeguarded.

However, notwithstanding the Tote's long and noble tradition of supporting racing, we on these Benches agree that the time has come to modernise its structures, thus enabling it to compete more effectively in the market place. I pay tribute to the work of my noble friend Lord Astor who introduced a Private Member's Bill which sought to achieve that very goal in 2000.

It is for those reasons that we fully support the Government's stated intention that the Tote should be sold to the Racing Trust. Such a sale secures our twin aims of safeguarding the Tote's multi-million pound annual contribution to racing while also allowing it to compete commercially.

Yet there is a cloud on the horizon. Noble Lords may have read about rumours that the Treasury feels that it could perhaps raise more money if the Tote was sold to venture capital firms and is therefore having
 
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second thoughts about a sale to the Racing Trust. For example, I refer noble Lords to the article in the business section of the Observer on 1 August this year, which states:

While I would not normally pay much attention to such rumours, nor indeed do I believe all that I read in the papers, the indicative amendment introduced and then withdrawn by the Government on Report supported that view in the event that a sale to the Racing Trust was withdrawn and abandoned.

Throughout these proceedings, the Government have steadfastly refused to put their intention to sell the Tote to the Racing Trust on the face of the Bill, despite an explicit manifesto commitment. Indeed, the Minister has been very careful with his words and has failed to give any guarantees about the purchaser of the Tote.

Let us be very clear: the Bill before us today gives Ministers carte blanche over the Tote. All it actually does is nationalise the Tote at zero cost to the Exchequer. The Government would then be free to sell the Tote to whomever they wanted, whenever they wanted and at whatever price they wanted. There is nothing in the Bill to stop the Treasury nationalising the Tote and subsequently selling it to the highest bidder, thereby jeopardising the Tote's contribution to racing.

Our amendment is designed to act as a check on the Government and to help them ensure that they honour their 2001 manifesto commitment to,

Our amendment is not designed to be complicated or contentious.

We on these Benches have supported Part 1 of the Bill solely on the basis of a sale to the Racing Trust. If that is not possible—and given that there may be good reasons why such a sale is not possible—we believe that it is incumbent on the Government to return to Parliament to seek its approval to sell the Tote to another bidder.

Noble Lords may be aware that the sale of the Tote to racing is the subject of ongoing discussions between the European Commission and the Department for Culture, Media and Sport. I am grateful for the Minister's letter dated 20 August confirming that the Commission had a number of queries about the Government's proposals. Although the Minister was unable to provide any details on the nature of those discussions in his letter, it would be helpful to learn today if an agreement has been reached, at least in principle, with the Commission.

I am confident that many noble Lords would share my frustration if the sale of the Tote to the Racing Trust were undermined by an adverse state-aid ruling from Brussels. When we last discussed the sale of the Tote at Report stage, the Minister was told—I hope in no uncertain terms—that unless all the preparatory
 
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work had been done to reach an agreement in principle with the Racing Trust, Her Majesty's Opposition could not support Part 1 of the Bill as it stood. Unfortunately, that has yet to happen.

The Minister kindly sent a letter on 12 August to say that while government accounting rules permit planning and preparatory work to be undertaken prior to Royal Assent, the department took the view that it could,

The letter goes on to say, in the finest Civil Service jargon:

As noble Lords may appreciate, we on these Benches need something more concrete than,

of a sale to the Racing Trust. It is not even clear that the Government have managed to achieve that at the moment. My understanding of the situation is that it remains fluid and far from certain as to whether the Tote will be offered to the Racing Trust at a price that it can afford.

Certainty and clarity on this Labour Party manifesto commitment are required on the face of Part 1 of this legislation today. Certainty and clarity are required in the form of a clear indication that the Government intend to sell to the Racing Trust. We on these Benches believe that there is still far too much uncertainty over the Government's policy to sell the Tote to the Racing Trust. As such, we are unable to support the Bill without the required safeguard contained within my amendment.

I should reiterate that this is not a controversial amendment. The wording and intent have evolved throughout the passage of the Bill to include the concerns of noble Lords and the Minister—indeed, noble Lords from all sides of the House. The principle of the amendment supports the Government's stated policy to sell the Tote to the Racing Trust. Further to that, it secures a vital safeguard to the Bill in the event that a sale to the Racing Trust is not possible. There are precedents for such a safeguard and it would do nothing but strengthen the Bill before us today. I beg to move.

Viscount Falkland: My Lords, we on these Benches understand that the transfer of the Tote from whatever it was—through the nationalisation process to the private sector—is a complex and unusual matter. It is very necessary. The reasons for it being in the Labour Party manifesto are well understood. It is long overdue that the Tote should be out of the purlieus of government in the way that it has been. The Government and those who have run the Tote have served the interests of all those involved—the punters and racing—very well.
 
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I absolutely understand the thinking behind the amendment tabled by the noble Lord, Lord Moynihan. In Committee, I again agreed with much of what he said. Time has now moved on. The programme has not exactly kept to that which was foreseen. We are at a disadvantage in your Lordships' House today because we have had the Summer Recess. Negotiations have taken place in terms of finding the proper consideration that would be paid by the Racing Trust if this deal is the deal that finally moves the Tote into the private sector. We understand—all noble Lords will understand—that the Treasury has a public service remit. It deals with public funds and will need to take careful note of the value of what is being sold or transferred and not give any favours to anyone in so doing other than to the nation that it serves. I put that in more clumsy words than the Minister did when we discussed the issue.

There is a difference between the noble Lord, Lord Moynihan, and the Minister, who explained carefully and clearly to us the difficulties that he was in by giving the undertaking required of him: should the deal fall through it would return to the starting blocks—if I may use that sporting analogy. We would not want to rehearse the reasons he gave now.

A deal of trust in the Minister is required by all interested parties. I am sure that he and those connected with the matter are sincere that the benefit should go to racing. That is what we all have been aiming at. I am sure that the best efforts have been made during the past weeks to make sure that the negotiations have gone in that direction. I hope that the Minister will be able to tell us, while we are deciding how we are to react to the amendment in the name of the noble Lord, Lord Moynihan, that things have moved forward apace and that the intention is to do what the Minister said that the Government intended to do. We are somewhat behind at this stage because the matter is complicated.

Perhaps the Minister can tell us how far apart the Treasury and the special advisers to the Racing Trust are. I imagine that there is a gap in terms of the appropriate consideration. There are all kinds of matters about which we know very little. All we know is that there has been a general expression of good will towards the trust. The noble Lord, Lord Lipsey, has been at great pains to explain to us both in your Lordships' House and privately how things are going. I know that he has had a difficult time, but I think that he is probably more optimistic now than he was some weeks ago. Perhaps he will rise to his feet to tell us something of that in a moment.

This is an extraordinary affair. We are dealing ultimately with public funds which are not to be sneezed at. People to whom I have talked both inside and outside racing tell me that the value on the open market would be in the nature—including the betting shops and the Tote pool operation—of not much less than £350 million. The noble Lord, Lord Moynihan, says that there is a rumour that there are those who
 
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would prefer that we got shot of all this and sold it to the highest bidder and let racing take its slice now, whatever that may be.

I have discussed the matter with the noble Lord, Lord Lipsey, and others, and he will probably be able to argue in the House today that that road would ultimately be unsatisfactory for racing and that the road of going to the Racing Trust, if the consideration can be agreed on, will be much more beneficial to racing in the short, medium and long term.

I assume that the Minister will tell us that he and his department are using their best endeavours to get the agreement between the special advisers and the Treasury settled in the near future so that it can go ahead. However, a number of minor issues need to be addressed. Although I have worked in business circles and in the City, I am not aware of what is appropriate in all the aspects of such a deal.

I hope that I am not treading on any toes, but for example, when we went to the annual general meeting of the Tote, the admirable chairman of the Tote, Mr Peter Jones, expressed the hope—it is on public record—that 5 per cent of the agreed price would be shared among the staff of the Tote. I found that an interesting concept, and perhaps that is normal among transfers of this magnitude. When I think about it, however, I do not know whether it is appropriate for a transfer of this kind. One has to say that in the climate in which City operations are now viewed by both the public and the press, a little clarification on the matter is needed.

I do not know whether the Minister will be able to say anything on that matter. I cannot think that the chairman of the Tote produced that figure in public without it having some authority. Noble Lords might be interested to know what exactly that means if we are going to sell something for £350 million with 5 per cent going to the staff. Does it embrace the directors of the company and all the staff down to the doorkeeper, the chauffeur and so on? Does the Minister recognise that? Is that figure normal in such transfers? If so, is it appropriate in this case?

It is one of the points that we need to know about. Your Lordships' House might be a good place for the air to be cleared on the matter. It might be an extremely good idea. The Tote is an admirable organisation that has served us well. The staff obviously deserve recognition, whether they be directors or just lowly members of that operation. It would be interesting to hear from the Minister what would be appropriate in this case.

Without saying anything about voting to the noble Lord, Lord Moynihan, if he intends to go through the Lobbies, we would prefer at this stage to trust the Minister—if he says what I hope he is going to say and we are reassured by the noble Lord, Lord Lipsey, that we do not have to follow the noble Lord into the Lobbies.

I hope that the rumour about the idea that it may be better to sell the Tote to the highest bidder—without going through the complications of the Racing
 
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Trust—can be scuppered in your Lordships' House this afternoon so that we can all retain our seats and not go into the Lobbies. I imagine that the noble Lord will not be pressing his amendment. I look forward to the speeches that follow.

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