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Lord Lipsey: My Lords, I am most grateful to the noble Viscount, Lord Falkland, for his kind and supportive remarks and his supportive behaviour throughout this legislation. During August we went in very great detail through the relevant benefits to racing of an open market sale and a sale to racing. I do not want to go into the figures for obvious reasons, but I can confirm that on any conceivable scenario it is far better for racing to buy the Tote than it is for an open market sale to take place and half the proceeds to be given to racing. I give the House that assurance. I went into the matter with an open mind, but I now have a closed mind on the basis of the detailed paperwork that we have done.

I must remind the House that I am chairman of the shadow Racing Trust, the precursor body of the Racing Trust to which the Government plan to sell the Tote. I have taken advice from the House authorities which confirms that that interest does not disqualify me from taking full part in the proceedings on the Bill. Therefore I will give the House my best advice on the position as it stands. I am afraid that that will take rather longer than I would like because of the complexity.

As will be clear from my speech, I hope that there are not any votes this afternoon. Should a vote take place, your Lordships will understand that in view of my rather sensitive position I shall not go into the Lobbies on either side.

Through the proceedings of the Bill there has been a standoff about the proposed new clause standing in the names of the noble Lords, Lord Moynihan and Lord Luke, and myself. We supporters have said that it is desirable that, were the Government to decide to abandon their manifesto pledge to sell the Tote to a racing trust and instead decide to flog it off to the highest bidder—I do not think there is much probability of that—they should first put that policy to both Houses of Parliament for approval. Ministers have put forward a number of arguments why they do not want to do so, most notably because they think that if they were to they would be negotiating with the trust with a pistol held to their heads. That was the position in July—stand-off.

When last the House debated the matter we decided to proceed as follows. Discussions would take place over the summer. As the noble Lord, Lord McIntosh, explained, there could not be negotiations because government expenditure conventions prevent full-scale negotiations taking place until after a Bill has received Royal Assent, but there would be discussions about the valuation bases and so on which are the necessary prelude to negotiations. The Government agreed that they would talk only to the Racing Trust. The hope was that by the time we got to Third Reading
 
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today it would be so obvious that we were within spitting distance of a deal that the amendment was redundant.

Those discussions have been taking place between the Government's appointed valuers, PWC, and the Racing Trust's, Rothschilds. They have been up and down. This time last week I would have had to say to the House that they were more down than up. It had seemed to our advisers that PWC had been taking a very aggressive attitude towards the valuation of the Tote. I can give many examples, but one will suffice.

According to the PWC valuation model, the Tote will be making more money out of its pool betting after seven years—which is when its exclusive licence will elapse—than it is now. If we believed that assumption, we would say, "Get rid of the exclusive licence now". We would not have gone through the long process of fighting to keep the exclusive licence for seven years. That is but one example of a very large number where it seemed to us that PWC were being aggressive about valuation.

However, over the past week discussions have taken a turn for the better. There still is a gap—a not insubstantial gap—between PWC and Rothschilds, but it seems to be narrower than had been feared. It begins to look—all possible fingers crossed—that if the process continues it might be that a price will emerge which is acceptable and affordable to racing. I, anyway, am optimistic.

Where does that leave the amendment? I still believe that the arguments that have caused racing to push amendments along this line all summer are correct. I do not give much credence to Ministers' counter arguments. They argue that they have a pistol to their heads. Is that right? If the Racing Trust offered a ludicrously small amount or could not finance a deal and it fell apart, Ministers would come back to both Houses of Parliament and say, "We cannot do a deal with the Racing Trust". They have a majority of 160-odd down the Corridor—not much bother—and normally this House does not seek to overrule the Commons. They would have to put their case to both Houses and, to be honest, I think they would carry it; they generally do. If their reasons were bad they would not deserve to carry it. So I do not find their arguments very convincing.

Unfortunately, although I have argued the case at length with Ministers, they do not seem to agree with me. They seem determined to resist the amendment, and they will.

So it is right that the House balances the argument for the amendment with the cost of pursuing it today. First, if the amendment is carried, the Bill will have to go back to the Commons, and I am quite sure that the Commons will send it back to us. It will not go there until after the conference season opens, and this will in turn delay Royal Assent. We are on a very tight timetable if we are to achieve the target date of completing the Bill by the end of the year. Further delays at this stage would be very undesirable.
 
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And to what effect? Let us suppose the Commons overturn an amendment of this House and the Bill comes back here. We would then face a difficult choice. We can either do what we usually do—huff and puff a bit and then agree with the Commons—in which case we have not achieved much for the extra delay; or we can stand firm and risk the loss of the whole Bill.

I am aware that there is a question mark hanging over the whole legislative programme at the moment—namely, the Hunting Bill and the possible loss of Bills as a result of the Government's decision to go ahead with that Bill. I shall not give my views on that decision on this occasion. The thought of losing the Bill in the brouhaha over hunting is appalling.

Even without the safeguard proposed in the amendment—to which, after all, I have put my name, so I think it makes some sense—there are very strong safeguards that stop Ministers making up their mind to go off and flog the Tote to the highest bidder. Their word is one. It could hardly have been put more strongly by the Minister in another place, Mr Caborn, and my noble friend the Minister here.

To do that they would have to welsh on a clear and unambiguous manifesto pledge. It has happened, but I do not think that it would happen readily again. They would have to eat their repeated words. They would attract the ferocious wrath of the Transport and General Workers Union, which represents the workers at the Tote—and in view of the discussions at Brighton this week I am not entirely sure that they would want that. And there would be some people—even in new Labour—who do not think that the first priority of the Government is handing the Tote over cheap to City fat cats.

Racing's friends in both Houses of Parliament would be aghast. The same people that the Government are slapping in the face with the Hunting Bill would feel slapped again by such treachery to another country sport—racing. We would then go into the general election as the party that had strengthened the hold over the country's punters of the big three bookmakers—Hill, Ladbrokes and Coral—who would end up owning it. I am only an amateur politician, but if I was a professional politician down the end of the Corridor I would not fancy doing that at all.

So, even without the amendment to the Bill—as I say, I hope Ministers will accept it—it is profoundly unattractive for the Government to go down any alternative route.

It is, of course, a matter for the noble Lord, Lord Moynihan, whether he decides, in the light of these conflicting considerations, to press his amendment. However, if I were in his shoes—and knowing what a robust, steadfast supporter of a sale to racing he has been throughout, and I pay tribute and thank him for that—I would want first to listen closely to the Minister's reply today. I hope he will say that he will accept the amendment, but failing that, let us hear what he has to say.
 
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Will the Minister repeat in no uncertain terms that the Government's clear policy and intention is to sell to a racing trust and none other? Will he confirm that valuation discussions are continuing, will continue for some time and can be expected to narrow the gap between the PWC valuation and Rothschilds? Will he confirm that the striking of a valuation is not the end of the story but the first chapter only; that there will then have to be discussions between Ministers and the trust, which I have the honour of chairing, that take into account inter alia the Government's explicit political commitment and racing's capacity to finance a deal, as well as factors such as Brussels state aid considerations?

The onus is with the Minister. He has a task on his hands to persuade the House that the Government still are determined to fulfil their manifesto commitment and that, having willed that end, they are willing to embrace the means to the end through a flexibility in negotiations. If he can do so, then, perhaps with a slightly sad sigh, we should be prepared to wave a fond farewell to the new clause, which has helped to concentrate Ministers' minds during the summer process quite considerably. If not, then the House must vote accordingly.

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