Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Alan Campbell.]
Thank you for allowing us to have this debate, Mr. Conway. First, I congratulate my hon. Friend the Minister on his new ministerial role and thank him for taking time out to come to the Chamber this morning. People might ask why we are having this debate, because bookies do not have a very good reputation with a lot of people. In fact, they are described as pickpockets who pay people the courtesy of allowing them to use their own hands. That is very unfair, because bookmakers bring a lot to racing, particularly through race track pitches. The last time I spoke in a debate like this, it was the week of Cheltenham and I gave out a tip for a horse, which came nowhere. What I did not realise was that half the staff who work in the Palace had bet on that horse, and some have not spoken to me since then.
I want to draw the Minister’s attention to a situation that is of grave concern to all bookmakers operating in the trackside betting industry. Under the Gambling Act 2005, hundreds of bookmakers throughout the United Kingdom stand to lose thousands of pounds in accrued business assets, because the Racecourse Association has decided that, as of 2012, it will no longer acknowledge a bookmaker’s list position. A bookmaker’s list position determines their choice of pitch, or pitches, on a race course. The higher up the list position a bookmaker is, the greater the choice of pitches on any given day. As one would imagine, the position of a pitch on the race course has a substantial effect on the revenue that a bookmaker can hope to make from the day’s racing.
Before 1998, such allocations were made on the system of inherited seniority, which enabled the priority of pitch allocations to remain within a given family of bookmakers. That outmoded practice was abolished in 1998, as it was rightly felt that it restricted access to new blood within the industry. Obviously, the concept of any system of inherited privilege should always be challenged in a just and fair society—I am sure that Members of the other place will wholeheartedly agree with that.
From 1998, the rules were changed so that a bookmaker’s list position, which at the beginning of that year was still based on the outmoded system of seniority, could be traded. Their greatest asset—the order in which they chose their trackside pitch position—could therefore be sold. That allowed bookmakers to realise the financial worth of years, and often generations, of hard work in the industry. To put that into a financial context, an official of the soon-to-be-defunct National Joint Pitch Council—the body that oversees the allocation of pitches— recently estimated the total value of bookmakers’ positions to be in excess of £100 million, a not inconsiderable sum of money.
The change in the rules has allowed established bookmakers to expand their businesses and others to enter the industry. As was predicted in 1998, fresh blood is entering the system and it has worked effectively. The RCA is no doubt aware of the worth of the pitches. Although it is right to say that it owns the physical pitch, it has previously had no say in which bookmaker occupies which pitch. If the RCA were to control the allocation of pitches, the accrued worth of years of hard work from bookmakers would transfer to it in the blink of an eye.
Many bookmakers have invested thousands, and in some cases millions, of pounds in their list positions. I do not believe that, when the 2005 Act was first proposed, the Government intended to deprive so many individuals of their commercial equity. An article from The Guardian, published on 21 June, mentioned a man named Barry Johnson who had spent £1.25 million to buy 34 pitches in the south and midlands. If we continue to take the present position, that investment, made months ago, would disappear come 2012.
If the RCA proceeds as it intends, from 2012, all pitch positions will be rented out on any given day to the highest bidder. That will leave independent bookmakers, regardless of their previous list position, to compete with the larger corporate betting companies that will, no doubt, take advantage of the new system. In practice, we could face a monopoly whereby the big three or four bookmakers would determine the prices not only on the high street but on the track as well.
Such a monopoly is not acceptable. To put it simply, many independent bookmakers will have no option but to leave the industry, as worsening pitch positions lead to a loss of revenue. Not only that, but their previous asset, their pitch position, will have zero value. That will render their investment, personal or financial, completely worthless. There is a great danger that our independent bookmakers will be priced out of the market by the larger, corporate betting companies, many of whom would, no doubt, pay whatever cost for the most prestigious positions on a race course. That would have a devastating effect on not only the independent bookmaking industry, but the image of horse racing in general.
For those who purchased their list positions after 1998 from established bookmakers, the position is arguably even more unjust. They have purchased their list position at considerable expense and they are being told, despite assurances in good faith when the purchase took place that their list position was for life, that those assets will be rendered worthless as of 2012.
Modernisation should not result in the loss of millions of pounds worth of accrued assets for independent bookmakers. When a business has been established and built by a family, either to pass on from generation to generation or as an asset to sell at a later date, surely it is only fair that that family can trade that asset itself. The RCA has made no provision for, or even mentioned, any form of compensation for the bookmakers whose assets will be worthless.
Horse racing remains one of the United Kingdom’s best-loved sports and events, such as the grand national, are enjoyed the world over. Our independent bookmakers are an essential part of the industry. They bring a lot of fun and competition to the race track. We in both Houses should do everything in our power to ensure that they can continue in their chosen profession.
I believe the RCA’s decision to ignore long-established and regulated list positions from 2012 is not in the spirit of the 2005 Act as intended. When the Act was first proposed, much emphasis was placed on the regulation of casinos. Certain consequences for other sectors of the gambling industry, particularly trackside bookmakers, were perhaps not fully considered.
I therefore urge my hon. Friend the Minister to revisit this important issue with the view to retaining the current system of list positions for trackside bookmakers. I fear we are in danger of doing a grave injustice to many individuals who have worked so hard in building up their livelihoods, and I encourage the Government—in particular, my hon. Friend—to address the issue with the utmost urgency.
I congratulate my hon. Friend the Member for Livingston (Mr. Devine) on securing this important debate and the Minister on his appointment. I thank him for giving his time to an issue that affects the livelihoods of so many. I wish to join my hon. Friend the Member for Livingston in bringing it to the attention of the House, as I believe that it will have serious repercussions for thousands of people involved in the bookmaking industry.
A bookmaker’s position on a race course has a significant impact on the value of his business. The closer a pitch is to the finishing line, the greater the revenue is likely to be. The bookmaking community has always worked hard to regulate itself to enable the fairest possible system of pitch allocations on race courses. To allocate highly valuable pitches in the fairest manner possible, trackside positions are based on the pick list system, which, as we have heard, replaced the previous seniority-based system in 1998. Under that system, the longer a bookmaker had been operating, the greater their seniority and the better their trackside position.
Seniority could be handed down only from father to son, which adversely affected some of my constituents. That was why that method was felt to be outdated in the modern horse racing industry in the late 1990s. The pick system, which replaced seniority, enabled bookmakers to trade their positions on any given pick list with any other individual or business. In other words, their seniority could be sold.
Many of the bookmakers that make up our trackside bookmaking industry are family-run businesses that have built up their credibility and reputation over generations—in some cases, over more than 100 years of hard work. Their positions in the pick list reflect that. Due to the close-knit community of bookmakers, each one in an area is aware of and respects the positions of the others.
Unfortunately, as in many other family-run businesses that have been established for generations, the younger generation may not wish to continue in the industry. Many long-standing family bookmakers that had operated under the previous system took the opportunity of the new rules to expand their businesses further by purchasing positions on the new pick lists as other bookmakers left the industry. Since the most recent rule changes were introduced in 1998, bookmakers have ensured that each allocation is distributed fairly on any given racing day. The pick system has been respected, acknowledged and adhered to by every bookmaker in the United Kingdom.
Whenever there is a change in the law, as was the case with the abolition of seniority, it is right for the House to do all that it can to protect the assets of those affected. Such forethought was applied in 1998, when the initial positions on the pick list were allocated based on a bookmaker’s seniority. As most hon. Members present know, and as the Minister may be aware, there were some disputes about that allocation, but that is not the subject of the debate.
While the change in the law has resulted in much-needed new blood entering the bookmaking industry, it was seen as a natural evolution of the previous system. In fact, most bookmakers welcomed it. Their support was guaranteed because we as a Government had ensured that the value of their accrued assets was protected. In 1998 the Government acknowledged that it would be unfair for accrued seniority simply to vanish and evaporate when a bookmaker wished to cease trading. The Government-appointed Horserace Betting Levy Board allowed the trading of list positions, which meant that a bookmaker’s greatest asset—the position of his pitch on a race course—could be sold. The worth of a pitch position can often run into tens of thousands of pounds or in some cases, as we have heard, more than £1 million. A business that had been established for many years was therefore able to benefit from its accrued seniority by selling its list position. That system has worked successfully for almost 10 years and all the bookmakers work to the rule and respect it.
As we have heard, and as I have been told by several bookmakers in my constituency, the Racecourse Association will cease to recognise list positions from 2012 as a consequence of the coming into force of the 2005 Act later this year. That interpretation of the Act will cause many in the industry to lose assets that often constitute a lifetime’s work. Indeed, they have already done so simply because of the announcement.
Many bookmakers are family-run businesses and a list position can be handed down from generation to generation. The livelihood of children, grandchildren and great-grandchildren of bookmakers has suddenly evaporated, which I am sure was not the intention behind the 2005 Act. Many in the industry see the Racecourse Association’s interpretation of the new rule and refusal to acknowledge pitch positions from 2012 as nothing less than industrial theft. I would hesitate to use such terms, but that is none the less a useful indication of the depth of feeling, as is the number of hon. and right hon. Members here today.
Perhaps a good analogy would be that the situation is the equivalent of owning the freehold on a home, only to be informed that not only has the freehold been rescinded, there are now only five years left on the lease. Any such property would be greatly reduced in value, if not made worthless. The situation has come about because the Horserace Betting Levy Board will no longer take any responsibility for the issuing of certificates of approval for bookmakers. Under the Betting, Gaming and Lotteries Act 1963, the price of admission to a race course for a bookmaker has been limited to five times the price of public admission to prevent race courses from charging unrealistic figures for the better-placed pitches.
Under the new Act there is no provision for a set amount to be paid by bookmakers to secure a pitch. That has allowed race courses to state their intentions to determine in commercial negotiations with betting operators the terms by which they will stand in relevant areas and where they will stand relative to one another. The result is that following the five-year “grace period” allowed for in the Act, from 1 September 2012 race courses will not recognise lists or transfers of picks between betting operators, and the current system of a pick list based on bookmakers’ seniority will be set aside in favour of one awarding placements to the highest bidder. Many family-run businesses will find themselves unable to compete with the larger bookmakers, which are very large organisations. Despite the positions of the family-run businesses on the pick lists, they will find themselves further and further down the track, with the correlating substantial loss of earnings and of the true flavour of the track.
For those who have bought their list positions from established bookmakers for considerable sums, the situation is even more distressing. Those who bought them at auctions held by the National Joint Pitch Council were given a clear indication that the placements would be secure for their lifetimes.
I am sorry to interrupt my hon. Friend’s speech, but this is a crucial point. What is the evidence that the NJPC told people that their pitches were for life?
The basis of the auctions that were held from the beginning of the 10-year period was that they were, in effect, selling freeholds. The people who bought pitch positions were not given any indication that they were buying them for 15 years. That is the basis of my argument. I appreciate the Minister’s point, but I challenge him to ask anyone who bought a pitch position in an auction whether they believed that they were buying it for a set term, or any term. If they were buying them for a 15-year term, not informing them of that at the time is tantamount to fraud.
The clear indication is that the bookmakers who are currently in good positions on a race course through their seniority, or through having paid for their pick placement from someone in such a position, could find their assets worthless. As I have said, they believed that they were buying their pitches in perpetuity. The 2005 Act makes no provision for protection of people in either scenario.
I wish to highlight the case of my constituent Adrian Pariser of Pembroke crescent, Hove, who trades as an on-course bookmaker under the name of Sam Harris. Mr. Pariser has an extensive family history in the bookmaking industry. He recently contacted my office to express his grave concerns regarding the soon to be implemented Act. He had problems at the introduction of the period and successfully challenged the position that he was given. I have already outlined how his concerns are echoed by many in the bookmaking industry. My constituents Don and Gary Morill are in a similar position. They have been in dispute over their original pitch positions for the past 10 years. They now feel that they have been hit by a double whammy—please forgive my unparliamentary language, Mr. Conway—as the value of even their disputed pitch will be taken away.
With pitch allocations switching to the Racecourse Association, the subsequent worth of the pitches will also transfer to the association. To put it simply, the association stands to make millions of pounds at the expense of the accrued assets of the very people who, arguably, are their most regular and long-standing customers. Ironically, the NJPC has been selling picks and gaining 6 per cent. commission on the auction sale, as I informed the Minister, plus a transport allocation of £150 a sale. Those sales continued up to and into this year. However, Caroline Davis, the Racecourse Association representative on the NJPC, said in an article in the Racing Post on Tuesday, 3 April, that the legislation that paves the way for change has been around for two years. During those two years, the NJPC has continued to auction pitches based on pick seniority, taking the commission and transfer fee.
I would also like to draw the attention of hon. Members to comments made in a letter written by John Stevenson, the chairman of the National Association of Bookmakers. Hon. Members may be aware that I have been critical of Mr. Stevenson in this very Chamber in the past. However, no one can doubt his depth of knowledge. In a draft letter to MPs, Mr. Stevenson estimated that the current value of pitches based on the pick lists is in excess of £100 million. Following implementation of the Act, those pitches would have no marketable value whatever. Mr. Stevenson’s conclusion is that the failure of the Act to redistribute the authority to provide bookmakers with a certificate of approval will allow a race course to confiscate bookmakers’ positions as of 1 September 2012. He also concludes that that could not have been the original intention of the Act. I am sure that most people in this Chamber would agree with that.
With the Act coming into force later this year, it is of vital importance that any potential avenues for genuine misunderstanding or even potential corruption be considered and addressed. I would therefore be grateful if the Minister, who is new to his post, could investigate the situation as a matter of urgency, and make it a high priority to identify what measures can be put in place to ensure that the agreed procedures for establishing placements for bookmakers can be continued.
The principle at stake is one of fairness for businesses that have for many years abided by current regulations and recognised the system of seniority. With the value of the pitches running to millions of pounds, it should not be the case that years of hard work by families or commercially-run businesses could be rendered virtually worthless. The intentions of the Racecourse Association will surely discourage many from entering the industry, contrary to the rationale behind the new rules that were introduced 10 years ago. If the Racecourse Association needs to raise greater revenue from bookmakers, there are alternatives that many consider to be more appropriate and fair; for example, a variation of the commission on sale position.
The outcome of the current predicament will have far-reaching consequences not just for the bookmaking community but for the general public. The traditional bookmaker is as much a part of the racing experience as the horses and jockeys. Spectacles such as Ascot and the Grand National are part of our national calendar. They bring in many thousands of tourists, and are watched and admired the world over through television and satellite coverage, which also brings much-needed revenue. As the Act will change the rules that govern how the bookmaking industry operates, it is especially important that confidence in the industry is retained, not just by the public but by those who work in it.
I support the broad outline of the Act. With the advent of modern technologies, the gambling industry has undergone many changes. It is only right that the Government acknowledge those changes and introduce legislation that best reflects the need to adjust and adapt so that this great sport, the sport of kings, may continue to operate throughout the 21st century. However, with the allocation of list positions no longer being recognised after 2012, many bookmakers in the industry are concerned that too much control of trackside betting and the associated assets will be in the hands of one body—the Racecourse Association. There is great worry that such unprecedented control would provide the association with a greater degree of commercial control over trackside betting than would be desirable in a free industry.
The consequence of the Gambling Act 2005 is that Britain’s 59 race courses will be able to take over ownership of sought-after sites in 2012 and then rent them back to the people who originally bought them in good faith. No distinction or preference will be made on the basis of the bookmaker’s previous list position, which, in some cases, was acquired through a century of work and trust-building in the industry. Obviously, the allocation of pitches will be awarded on a commercial basis to those who are prepared to pay the greater rent.
Perhaps I am being absurdly pessimistic, but I can envisage the end of the family bookmaker as a result of the Act. Bookmakers, many of whom are individual businessmen, will vie for their trackside position against huge, enormous betting companies that obviously have huge, enormous resources. Having paid for their list position once and been promised that it would be for life, they will find themselves once again at the mercy of big business.
It is fair to say that many of the well-established but smaller bookmakers will be unable to compete. If they were to be lost, an essential component of our horse racing industry would be lost for ever. It is the duty of this House to do everything in our power to ensure that that does not happen. The loss of recognised list positions would be grossly unfair to those who spent so long building up their businesses. It would be unfair to their children, parents, grandchildren and grandparents—to whole generations of bookmakers. Furthermore, it would leave them with no long-term financial security. A highlight of previous legislation was that it gave bookmakers something to hand on to their children.
I therefore strongly urge the Minister in his new position to consider the specific intent of the Racecourse Association, and to consider whether legislation should be amended so that list positions remain in the ownership of the bookmakers. The issue is causing a great deal of stress and anxiety to many in the bookmaking industry who want nothing more than to continue to work in the profession that they admire and respect. We have but a short time before the Act comes into force, so I would appreciate the Minister’s review of the issue.
2012 looks set to be a golden year for British sport, but it is important that it should be a golden year for all British sport, not just the Olympic sports. It is important that we do everything that we can to protect the livelihood and reputation of those who have given their life to the industry.
I congratulate the hon. Member for Livingston (Mr. Devine) on securing this debate and thank him for doing so. He and the hon. Member for Hove (Ms Barlow) clearly laid out the case, so I do not intend to repeat it. As the hon. Gentleman might expect, the only place where I disagreed with him was at the beginning of his speech. The family bookmakers who are faced with the consequence of the 1998 reforms might now be in mind of the Duke of Wellington who, when faced with the Great Reform Act of 1832, said:
“Reform, reform—aren’t things bad enough already?”
We now have to deal with the consequences of changes made in the past 10 years. It is self-evident that we are faced with a substantial injustice, which, as pointed out, is in total estimated to be worth £100 million. Representations have been made to me about this issue, particularly by a classic family-bookmaking firm, Russell White and his son, John. Russell inherited the business from his father, so to my knowledge, at least three generations of people in the business have used the reforms to secure pitches. The value of those pitches is now estimated at £300,000; that is the size of the asset of which they will be deprived. If they seek to trade it now, under current valuations, they have already been deprived of a significant percentage of that amount.
The Minister intervened on the hon. Member for Hove to ask for evidence that the pitches were sold for life. If I were a lawyer defending his position in front of the European Court of Human Rights, I would not want to take his brief. As I have said, it is self-evident that there is a right to property and people have a right to enjoy their property, and it is plain that people are being deprived of that through the operation of the Gambling Act 2005.
The plain motivation of the Racecourse Association to obtain ownership of £100 million in assets under the operation of the 2005 Act will unfairly and unjustly deprive a group of people of a very significant asset, and that must be addressed. The case has been made extremely clearly by the hon. Members for Livingston and for Hove, and I will not repeat it, but something must be done, and if the Government do not do it, family bookmakers will be forced to take the expensive option of taking their cases to the courts. On the evidence that I have seen, I believe that they will have a clear legal case, because they have been unfairly deprived of their property. We should not be in the business of driving bookmakers down that extremely expensive and hazardous route, where the beneficiaries will be a group of people who are nearly as well respected as bookmakers: a bunch of lawyers. I sincerely hope that the Government can find a solution to the issue.
Thank you, Mr. Conway, for giving me the opportunity to participate in this important debate. Before I start my contribution, it would be remiss of me not to pass on my congratulations to the new Minister, who is a fellow Yorkshireman. His predecessor, my right hon. Friend the Member for Sheffield, Central (Mr. Caborn), who was the longest-serving Minister for Sport ever, is also a Yorkshireman. He has an advantage over the current Minister: he is from south Yorkshire, rather than west Yorkshire, and as we all know, south Yorkshire is the best part of Yorkshire.
I will show that I agree with many of the comments made by hon. Members from all parties by quoting part of a letter from one of my constituents who is an on-course bookmaker. He is called Mr. Chris Johnson and he lives in Harlington, Doncaster, in my constituency. He has been an on-course bookmaker for a considerable time. I will not read the whole letter, but those parts that I think are most relevant, as it encapsulates the problem of the current impasse that we face. I have, of course, recently sent the letter to the Minister’s predecessor and have not yet received a response, although I only sent it around three or four weeks ago. The letter states:
“Dear Sir, I am a racecourse bookmaker whose livelihood will be confiscated on 1 September 2012 as a consequence of the Gambling Act, which comes into force on 1 September 2007.”
The letter then goes into the history of the establishment of the National Joint Pitch Council, and I will carry on from that point. He says that the establishment of the NJPC was
“heralded as an opportunity to introduce new blood into the ring and to give bookmakers the comfort of a stable career option at the end of which they would have a marketable asset with which to finance their retirement.”
“As a consequence bookmakers have invested substantial sums in buying into the ring and to date it is estimated that the value of bookmakers’ positions is in excess of £100 million. Many bookmakers have invested heavily into the ring, often financing these purchases out of savings or loans raised on the value of their houses.
During the drafting of the Gambling Bill it was decided by the DCMS that the levy board was to be abolished and hence it’s role in issuing ‘certificates of approval’, upon which bookmakers’ pitch tenure depends, disappeared and was not replaced by another mechanism. The Act provides for a period of 5 years, during which racecourses are restricted in the pitch fees they may charge, as has been the case since outlined in successive Acts, the latest being the Betting, Gaming and Lotteries Act, 1963.
However, as a consequence of the omission in the Gambling Act to replace the function of issuing ‘certificates of approval’, the RCA has interpreted this as allowing ‘the confiscation of bookmakers’ positions from 1 September 2012’… I believe that it could not have been the intention of Parliament for bookmakers to have their assets confiscated in this way.”
As hon. Members will know, the hon. Gentleman and I jointly chair the all-party group on racing. An issue that occurred to me while listening to the exchanges of hon. Members is that, when the measure was drafted, it was envisaged that the horserace betting levy would be abolished and therefore a commercial arrangement would need to be entered into between on-course bookmakers, race courses and the racing industry. As the levy will now continue, does the hon. Gentleman agree that we need to take account of that in the arrangements that will be put in place beyond 2012?
I thank the hon. Gentleman for his comments, with which I totally agree—to some extent he has read my thoughts.
If I may, I will continue to read from the letter:
“The levy board has now been reprieved but is reluctant to continue with it’s ‘certificate of approval’ role, and, as a consequence, there is a need for the tenure issue to be placed in alternative hands.
I am 49 years of age and have worked all my adult life as a racecourse bookmaker, acquiring my first bookmakers permit in 1979. Many of ‘my’ pitches were ‘earned’ under the previous system, (i.e. prior to the NJPC taking over the administration of racecourse bookmakers and their positions). To attain an allocated pitch in those days the bookmaker (in person) had to attend at least 75 per cent. of the scheduled fixtures for that racecourse. As I’m sure you can imagine trading on some of these days in the poorest position within the ring was almost unworkable, but to attain a permanent position the attendance requirement had to be fulfilled, thus I consider I well and truly earned my right to trade at each individual racecourse.
In 1998 the National Joint Pitch Council (NJPC) became the racecourse bookmaking industry administrative body, and along with many afore-mentioned changes within the ring, introduced the buying and selling of bookmakers positions. This allowed ‘new blood’ to become racecourse bookmakers and also allowed incumbent bookmakers like myself to improve their position within the ring by trading up. This I have done at several racecourses, investing well over £65,000 on positions at different racecourses, giving me a total valuation of my pitch portfolio of around £140,000, this prior to the RCA decision outlined earlier. Not only has this decision robbed me of any financial return/retirement package but it has knocked at least 30/40 per cent. off of the current pitch values because the purchaser knows he has only a 4 and a half year tenure to attain a return on his investment. As such, people who invested in pitches are left ‘high and dry’ because no-one wants to buy racecourse positions now (even at vastly reduced prices) and will have no asset to sell in 2012.
I am not a university educated man but this decision by the RCA cannot be a fair and equitable one. Your government introduced the social charter and extended rights for the individual and as such ought to view this outrageous decision by the RCA totally unjust.
As stated above, when pitch reform was introduced we were given assurances that this would give career bookmakers certainty and security and provide them with assets to finance retirement. It would now appear that these assurances have been swept away by something that would not appear to have been intended by Parliament, which would appear to be a case of ‘the law of unintended consequences’.”
I think that that epitomises the current problem. They are the words of an actual bookmaker.
I should like to stress the difference between an on-course and an off-course bookmaker. The point has been made already that many on-course bookmakers are small, family businesses; often they are not the rails bookmakers that can be found at race courses—the “big four”, as they are called, or the other big on-course bookmakers. Many of them are very small, family businesses, and they all have a certain amount of character to them and add to the atmosphere on the race course.
I remember an on-course bookmaker from Great Houghton, which is a village next to mine, near Barnsley, in my constituency. He was known as “Smiler” Pearson, and he was a typical on-course bookmaker; he had a flat cap, as could be imagined, given that he came from Barnsley. His lips were usually white from the chalk dust. I am going back to the days when bookmakers had to chalk up the odds, to the days before marker pens, so his lips were always white. He earned the nickname, “Smiler”, because, as could be imagined, he never smiled, like a lot of bookmakers. As they rob people and take their money, they never smile, even though they have just taken someone’s last shekel. Those sorts of characters are endangered by the current situation.
It goes without saying that we need to reach a consensus, which is why it is very important that discussions continue between the on-course bookmakers association and the RCA. Indeed, the Northern Bookmakers Association, which has been in touch with me and is based in Ilkley in west Yorkshire—of course—is looking, as a compromise, for the reintroduction of the certificate of approval, either by the levy board, as it used to be, or by the new Gambling Commission. I should like to hear the Minister’s thoughts on that when he sums up.
I realise that this is an extremely difficult issue to resolve, and in many respects, I can understand the position of the RCA, which wants to maximise its product. We have 59 race courses in this country. Long may that continue! I think that the rest of the world admires the diversity of our race courses. We must ensure that every one of those 59 race courses continues to exist, rather than allow the closures that have occurred, certainly since the second world war, to continue.
I understand that the RCA wants to maximise its profits. Betting on race courses is under threat from wider sports betting across the industry. The race courses feel threatened by the current environment. I can understand that. Both I and the joint chairman of the all-party group on racing and bloodstock, the hon. Member for Ryedale (Mr. Greenway), were present last night at the centenary celebrations of the RCA. Obviously, it is 100 years old, and we hope that it will keep together and continue to do the good job that it does in representing race courses.
One thing springs to mind that I would like the Minister to consider, in the spirit of compromise. The legislation is new, but is there any possibility that the transition period could be reconsidered and changed to seven years and therefore extended not to 1 September 2012, but to 1 September 2014? That would require regulation and have to come back before the House, which could be a stumbling block, but in the spirit of compromise, I should like him to outline to us his thoughts on that point.
I have spoken for quite long enough now, Mr. Conway. I think that Members on both sides of the House will make the same points that have been made already. My main point is that on-course bookmakers add to the atmosphere of race courses, and I want there to be as many of them as possible on every race course in this country, because they add to the flavour of a day at the races.
I shall be brief, Mr. Conway.
The on-course bookmaker is a unique feature of the British horse racing scene, and we put him at risk at the peril of racing, in my view. People who go to our vastly improved race courses have a choice: they can bet with the bookie on the course, or with the Tote. As I think that some here know, I have been an adviser to the Tote for some time, and the last thing that it would want to see is the demise of the on-course bookmaker. The competition between them is a vibrant part of the racing scene. I do not believe for one minute that anyone running a race course in this country wants to see the demise of the on-course bookmaker either.
Let us unite in the view that we must retain on-course bookmakers and the ability to bet on the Tote, which is a feature that does not exist in other parts of the world. If one goes to France, one can bet on the pari-mutuels, but not on the on-course bookmakers, which, quite frankly, apart from the fact that my French is not good enough to keep up with the commentary, I find a pretty miserable experience, compared with going to York, Newbury or Ascot, for example. Let us be clear about our objective.
It cannot be said that nobody knew that this was about to happen. It was put out originally in the Budd report, six years ago, and in the Government’s response in 2003. The Joint Committee that looked at the Gambling Bill, which I chaired, took evidence from the National Joint Pitch Council—we received a written memorandum from it—and oral evidence from bookmakers. The issue under discussion was not the relevant one at the time; the issue was the betting exchanges and the fact that the levy board was to be abolished, and probably the levy as well. That was the question.
I do not think that anyone quite knew the implications of this change. We have heard this morning about the funds that some bookmakers have paid for their pitches. We have all known for a long time that the current system is anachronistic and that generally there is support, even among bookmakers, for change. My right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) has campaigned on behalf of bookmakers in his constituency about those problems. In a sense, there was a need for change, which now has to be introduced in a way that is fair and preserves the racing scene that I have just described.
We need to take account of the fact that, as I have said, the levy was to be abolished, but now is not. On-course bookmakers have seen their margins reduced because of betting exchanges, which are growing. Of course, the abolition of off-course betting tax, which has been hugely beneficial to racing and off-course bookmakers, whose profits have grown, has put even more pressure on on-course bookmakers. There was a time when using an on-course bookmaker was the way to place a bet without paying tax, but that is the case no longer.
We must recognise those pressures, find a system for regulating this new market, provide security and continuity for those with pitches, achieve fairness, and ensure that pitches remain attractive. I listened to the hon. Members for Hove (Ms Barlow) and for Livingston (Mr. Devine), the latter of whom is to be congratulated on securing this debate. However, we must bear in mind also the need to ensure on-course attendance by those bookmakers, because, quite frankly—far be it for me to decry any one of Yorkshire’s nine race courses—a rainy day at Catterick on new year’s eve is a pretty miserable experience. I have been there many times on new year’s eve, and it usually rains and there are not normally many people about.
If we want those on-course bookmakers to remain, we must listen to their arguments. Ensuring their attendance is critical. We now have more than 1,500 fixtures on race courses—that is a hell of a lot of on-course bookmaker hours, and we need to ensure that they continue.
I agree with the hon. Member for Barnsley, East and Mexborough (Jeff Ennis) that we need to achieve consensus. With regard to changes in the Gambling Act 2005, I would be surprised if the Minister’s response was that the Government would reopen the primary legislation, because, with all the other issues outstanding, it would be a can of worms. However, we need to achieve consensus. We have five years to sit down and discuss a way through these issues. I am sure that I speak also for the hon. Member for Barnsley, East and Mexborough when I say that the all-party racing and bloodstock group is ready, willing and able to sit down and be a conduit through which those discussions can take place.
I enter this debate as a complete ingénu. I know absolutely nothing about racing. I have never been to a race course and have never placed a bet. I recognise that my hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis) knows a great deal more about this subject than I do, although I note that of the two Yorkshire Members—my hon. Friend and the hon. Member for Ryedale (Mr. Greenway)—who have contributed so far, one suggested that Yorkshire is a nirvana and the other that it is a damp and miserable place on new year’s eve.
A constituent of mine, Martin Davies, came to my constituency surgery a few weeks ago. He is an on-course bookmaker and has invested a considerable amount of his own money, and his own future, in building up a business on the basis of buying pitches. I want to make a very simple speech really. I believe that people bought pitches in good faith from the National Joint Pitch Council, believing that they were doing so in perpetuity—not, I would say, for life, but in perpetuity, which is quite an important distinction, because they believed that they were buying them and would then be able to sell them to another person, who might die a long time after them, but that is completely irrelevant. People believed that they were buying something and that that was their property—an asset that they had bought.
I greatly welcome the fact that my hon. Friend the Minister has this new portfolio. I am sure that he will bring great wisdom to it, but I hope that he will take some time in arriving at a decision on this issue. From his earlier intervention, it seems that his argument will be that people did not reasonably believe what I have set out and that they should have understood somehow or other that they were not buying pitches in perpetuity.
I am grateful to the Minister for that intervention, because it seems to me that it was entirely reasonable of people to enter into that expectation. The previous system was hereditary, so one could only assume that any subsequent system was likely to be for more than just a few years. Moreover, the new system was being sold to them as a fairer system, not a less fair system. The injustice of what seems likely to happen in 2012 is so manifest that any reasonable person would consider that anyone expecting that they were buying pitches in perpetuity held that expectation on a reasonable basis.
On top of that, nobody has yet shown me any evidence that the NJPC made it clear that there would be a final date when all the pitches fell into abeyance. At no point was it made clear to people that they were buying only a temporary lease. Indeed, I would say that although it was clearly a form of leasehold, it was that form of leasehold that is commonly known as virtual freehold in British law. I believe that that is what people were reasonably buying.
Consequently, there are two elements of failure in the system. First, I believe that the Racecourse Association, through an element of legislative jiggery-pokery, has in effect engaged in a process not of petty larceny, but of grand theft. That is, to be honest, what will be happening in 2012 if the abandoning of pitches is allowed to go forward. Secondly, Parliament has not fully done its job. Many areas of many Bills may be passed without our fully understanding the their implications and consequences but, as the hon. Member for Ryedale made clear, what we are discussing now was never the issue when the Gambling Bill was going through Parliament. Perhaps we should have known that this issue would come along. It is therefore incumbent on Parliament to put the problem right.
I say to my hon. Friend the Member for Barnsley, East and Mexborough that he is far too nice—in many regards perhaps, but particularly in suggesting that a mere extension to seven years would be enough to appease people. If we were talking about 25 or 35 years, we might be in the right ball park, but people have invested dramatic amounts of their money and their livelihood in buying pitches, and for the slate simply to be wiped clean because of a piece of legislation that no one fully understood would be completely and utterly wrong. A mere extension to seven years would be wholly inadequate.
I congratulate my hon. Friend the Member for Livingston (Mr. Devine) on securing the debate. It is a pleasure to follow my hon. Friend the Member for Rhondda (Chris Bryant), because my knowledge of this issue is probably inferior even to his own. I am not a gambler and have no specialist knowledge of the turf or turf accountancy, although I do remember, in the dim and distant past of my childhood, a favourite uncle skulking in back alleyways before his business became a little more legitimate. My knowledge, such as it is, was gleaned many years ago at my father’s knee as I watched interminable hours of racing on the BBC’s “Grandstand” while he followed the fortunes of the handful of horses on which he had bet a few shillings in those halcyon, pre-decimal days of black and white television. Such were his limitations as a punter that he was one of the few people who actually backed Foinavon in the 1967 grand national, as opposed to the many millions who claimed subsequently to have done so.
However, despite the fact that it might be said that I do not know a stirrup from a silver ring, I can recognise an injustice when I see one. Only yesterday, a constituent of mine who is an on-course bookmaker wrote to me about his concerns and the impact of what is happening not only on him and his family, but potentially on other businesses that he runs. That inspired me to speak for a few minutes today. I will not name him, because I have not had time to obtain his permission to do so, but his story is similar to many others that have been related today.
My constituent says in his letter:
“As a Racecourse Bookmaker I have recently been told that my investments are to be taken from me.
The RCA…have written to my trade associations informing them that under the 2005 Gambling Act they have been given the power to confiscate”—
that is the word he uses—
“all bookmakers’ pitches (seniority positions) from September 2012.
In 1998, when the NJPC encouraged me and all the other race course bookmakers to buy pitches with ‘the comfort of a stable career and the certainty of their investments’, I duly did just that and borrowed heavily to buy my pitches.
Since then I have worked very hard at gaining the respect and trust of customers, colleagues and officials and I have traded profitably every year. I have done absolutely everything that has been asked of me and now I am potentially going to lose everything without even any compensation. This cannot be just and I do not believe…a fair-minded Government would…allow such a travesty to occur.”
On my constituent’s behalf, I would like to put three questions that he put in his letter. Are the RCA statements correct? If so, was that really the Government’s intention? If not—this is the point made by all hon. Members—what plans are in place to rectify the position? My constituent continues:
“Many of my colleagues have had meetings with MPs”,
and the message has always been that that was not what the Government intended.
“If so, then no matter how small the size of the affected group…something must be done to put right such a wrong.
The strain of the events is already causing me major problems and I fear for the future.”
He goes on to explain that he runs a major manufacturing company—it is in the constituency of my hon. Friend the Minister, although he is a constituent of mine—and because of the way in which the investment has been made, he fears that there may be impacts on the company, which employs 100 people.
I can therefore only echo all the points that have been made by my more knowledgeable colleagues, including my passionate and hon. Friend the Member for Rhondda, and hope that the Minister will give my constituent and other people in the same position some comfort in his response today.
I did not intend to speak today, but I want to make two points. Before doing so, I congratulate the hon. Member for Livingston (Mr. Devine) on obtaining the debate and the Minister, who is an old football partner of mine, on his new position. I feel a lot more confident now that he is here and I hope that that will be borne out.
I am no lover of the NJPC, which has been a shambles since the day it was set up. It has been badly run and it is partly to blame for what has happened. It should have seen what was coming, but it failed to do so. Its whole purpose is to represent the bookmakers, but it has failed to do so.
I want to raise two points that have not been mentioned. One is that race course owners embarked on the process that we are discussing some time ago, and that should have been spotted. Some were placing pitches well away from the main stand as a way of devaluing their ability to trade; indeed, on one or two occasions, pitches were placed by the car park. The attempts by the RCA and race course owners to devalue what pitch owners are doing is therefore historical, and the Minister must look at that. As the hon. Member for Rhondda (Chris Bryant) said, pitch owners have purchased a position. Their problem, however, is that it is more like a flying freehold because there is nothing underneath it. All that they have purchased is the right to trade in a position, but the race courses can place that position anywhere they like, which devalues it. That must be borne in mind.
My other point is that seeking the highest bidder opens the industry up to corruption. There is a huge amount of money swashing around in eastern Europe, and people want to launder lots of it. There are lots of stories suggesting that it is possible to launder money through British race courses. I warn the Minister right now that we will be on the edge of a really serious process of corruption if we do not watch it. One of the guardians of the industry is the little bookmaker who, by his very size, is not open to such corruption. It is worth carefully looking at the issue, because the race courses may not be bothered with it.
To conclude, I simply line up with everybody else in saying that the sad thing is that the people who should have been represented have not been. We are talking about the small people—the small business men—and if there is one thing that any Government should do, it is to stand on the side of the small people.
I welcome the Minister to his new post and I am sure that we all look forward to his response. So far, the debate has been very one-sided, and I will stay on the same side as everyone else.
I congratulate the hon. Member for Livingston (Mr. Devine) on introducing the debate. I also congratulate the hon. Members for Hove (Ms Barlow), for Reigate (Mr. Blunt), for Barnsley, East and Mexborough (Jeff Ennis), for Ryedale (Mr. Greenway), for Rhondda (Chris Bryant) and for Pudsey (Mr. Truswell), as well as the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith).
The hon. Member for Livingston began by reminding us of what happened in 1998, when the list position arrangements were changed to allow trading in seniority positions. He welcomed that, although the right hon. Member for Chingford and Woodford Green has expressed serious concerns about it in earlier debates, including, most recently, on 14 March. As to which of the two is right, all that I can say is that the various constituents who have come to see me rather favour the view taken by the right hon. Gentleman.
However, we have moved on and we are now debating a separate issue, which has been well rehearsed in the debate. We are discussing the nature of the trading and whether people could reasonably believe that what was being traded was something that they held in perpetuity. The Minister rightly intervened on the hon. Member for Hove to ask whether people could reasonably have expected that to be the case—a point also raised by the hon. Member for Rhondda—and it is worth looking at that question. I will therefore concentrate largely on that issue in my brief contribution and I hope that that will help the debate.
As we know, the change in arrangements was introduced in December 1998. It is worth referring to clause 5 of the sales catalogue that was issued at that time, which says:
“The Buyer will be deemed to have knowledge of all matters which he could reasonably have been expected to find out given his knowledge as an Authorised Bookmaker and the exercise of due diligence.”
I would argue strongly to the Minister that responsible authorised bookmakers did do their due diligence test, but that they certainly could not have been expected to know what would happen following the introduction of the new legislation and its erroneous interpretation by the RCA.
It is also important to note that the extensive conditions detailed in the catalogue consistently emphasise that the buyer is buying a title, which can be transferred only under the NJPC arrangements. Under company law, a title constitutes an asset given to the holder of that title. People therefore believed that they were buying a title, which is an asset, in perpetuity. They were further led to assume that that was the case because all the relevant documentation referred to an opportunity to buy into a prosperous new era. They therefore assumed that they had got something that would be of financial benefit to them.
Underpinning every statement in the documentation was the idea of establishing a profession with stability and longevity. The issue of obtaining a title was made very clear by the NJPC, which set out four principles in its documentation. Those principles included the establishment of relativity, the affirmation of procedure, the determination of location and security of title. That is absolutely clear, but that security of title is now under threat, which is having a huge financial impact on on-course bookmakers and particularly, as the hon. Member for Barnsley, East and Mexborough rightly said, on the colourful, smaller family-owned businesses, which are now in serious difficulty.
Why has all this happened? Why are people under threat? I do not understand why they are under threat. I have not only read the Gambling Act 2005—I served on the Committee that considered it and I have looked back at the debates about it—but obtained the draft regulations relating to the relevant sections—sections 167, 168 and 355(1). The only relevant issue raised in the regulations relates to the five times rule, which paragraph 1(8) of part 2 makes clear will go after 31 August 2012. I do not understand, however, why that gives the RCA the right to make all the other decisions that it has made.
I therefore have a few quick questions for the Minister. First, is he aware that his Department has been informed of such concerns and worries over the past three years? Is he aware that a letter was sent to his Department as a recently as eight weeks ago, but that there has still been no reply?
Secondly, is what the RCA is doing in the spirit of the Act or does it run contrary to it? Is the Minister aware that the federation will have no choice but to go to the European Court of Human Rights, as the hon. Member for Reigate said? It will do that under the first protocol to the European convention on human rights, which relates to property rights.
Thirdly, was the working group that was set up in the Minister’s Department to ensure the smooth running of the Act given any remit to look at the issue before us? Although concerns were raised, I think that the Minister will discover that it was given no such remit. Perhaps he can explain why.
Finally, if the Minister has the opportunity, will he address an issue that has not been touched on so far? Bookmakers from other European countries, and particularly from Ireland and Australia, are involved in the issues before us, which means that there could also be EU involvement.
The hon. Member for Ryedale summed things up when he said that we need a fair solution. I served on the Committee that considered the legislation, and the present situation was not intended. We therefore look to the Minister not necessarily to find a compromise—indeed, we should not be talking about compromise because the proposal was not right in the first place—but at least to acknowledge that there is a significant issue of compensation to be addressed.
I, too, extend my congratulations to the Minister, and it will be a pleasure to face him on occasions such as this.
Like the hon. Member for Rhondda (Chris Bryant), I do not have huge experience of race courses or betting, but the hon. Members for Hove (Ms Barlow) and for Livingston (Mr. Devine) eloquently described what is quite a complex situation, and everybody who was unclear about the situation will now understand it fully.
There is no doubting the strength of feeling among the small independent bookmakers. We heard from my hon. Friends the Members for Reigate (Mr. Blunt) and for Ryedale (Mr. Greenway), my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) and the hon. Members for Rhondda (Chris Bryant), for Pudsey (Mr. Truswell) and for Barnsley, East and Mexborough (Jeff Ennis). The hon. Member for Barnsley, East and Mexborough read out a letter that eloquently and articulately describes the real concern and heartache that small bookmakers feel. In a debate that is quite technical, it is important to capture that; what is happening is about real heartache, and the feeling of a group of people that they have, to date, been betrayed by the Government. I do not say that that was necessarily the Government’s intention, but without a doubt that is what they feel.
We have a system that, with a few exceptions, appears to work well, although my right hon. Friend the Member for Chingford and Woodford Green talked about concerns about corruption. I know that he has raised several times, and continues to raise, issues about the National Joint Pitch Council. No one likes change, and change is on the horizon, but there is concern that the change that is happening will not only strip small bookmakers of their £100 million of assets, but—this is something that engages many of us here today—allow competition from the large bookmakers to swamp those small family businesses that are so important in many of our constituencies.
A period of considerable uncertainty looms, and although I was not a Member of the House when the Gambling Act 2005 was passed, it feels as if the issue of on-course betting was not well considered at the time. It rather got lost in the controversy that surrounded casinos. It is very easy to dismiss concerns about change as simple unwillingness to change. I believe that, as we have heard from hon. Members this morning, the debate is about considerably more than that. The Minister asked for evidence—I know he came back to that point in a later intervention—but whatever the evidence, the perception and the reality is that the small bookmakers felt that they owned something, and they now feel that someone is about to take away what belonged to them.
The matter could go to court. Everyone could spend a great deal of time in court, including the Government. The small bookmakers could spend their last pennies on it, and whatever the outcome no one would be very satisfied at the end. Alternatively, the Minister could agree today to reconsider the situation, and leave the people in the Public Gallery—it is always good to see people listening to debates—with some reassurance that he will examine the issue with an open mind. The current situation is of exactly the type that gives all levels of government—I am not talking about the present Government or making party political points—a very bad name, when they wade in without understanding the issues on the ground and bring forward legislation, while the small players at the front get forgotten. That is particularly relevant in the context of an Act that has courted, and continues to court, controversy.
I know that the Minister would like quite a lot of time to respond, and I think that all hon. Members present for the debate, together with, as I have said, the people in the Public Gallery, are anxious to hear what he has to say, so I shall not take up much more time. Fundamentally I want the Minister’s assurance that he will reconsider, and look for a solution. I agree that we are not necessarily looking for a compromise, but want a solution. When debate on this matter is finally wrapped up and the Minister has considered it, people will need to feel that he has taken their concerns into account, and that they will not be stripped of something that they understandably feel belongs to them.
Thank you, Mr. Conway; I welcome you to the proceedings this morning. I thank right hon. and hon. Members of all parties for their words of welcome to me in my new ministerial role, and I am delighted that my hon. Friend the Member for Livingston (Mr. Devine) was able to secure the debate.
It would be foolish of me to underestimate or to fail to understand the high level of interest in on-course betting and the emotion that the issue generates, not least because of the passionate speeches made here today by hon. Members, but also because of the many letters that my Department has received. I have read through the previous debates, and I understand many of the issues that need to be considered. My predecessor, my right hon. Friend the Member for Sheffield, Central (Mr. Caborn), wrote to hon. Members about some of the matters that were raised in the previous debate. This is my first opportunity to offer my thanks to my right hon. Friend for his work as Minister for Sport. He will be a hard act to follow.
My hon. Friend the Member for Livingston, like his predecessor in the constituency, the late Robin Cook, has a great love for and appreciation of British horse racing. I share his enthusiasm for that great sport and for the heritage, tradition and characters that go with it. I have shared racing day experiences with many hon. Members who are present today. I agree that a key part of the experience of live horse racing is to be able to place a bet with a bookmaker on the race course. It is exactly because we want to preserve that experience and encourage more people to enjoy live racing that we have maintained in the Gambling Act 2005 the right of bookmakers to be allowed into betting rings on race courses to take bets.
Before I address my hon. Friend’s specific points, it might be helpful if I set out some of the background to the issue. The Horserace Betting Levy Board is a non-departmental public body that operates in accordance with the Betting, Gaming and Lotteries Act 1963, as amended. The board’s main functions are to collect payments from bookmakers and use them for the three statutory purposes that relate to the improvement of horse racing set out in the 1963 Act. Since 1972, the board has also had the responsibility for issuing certificates of approval to race courses. Race courses can be issued with a certificate of approval only if they provide a place on-course for bookmakers to carry on their business.
At the time in question, the National Association of Bookmakers had responsibility for the administration of betting rings, under agreement with the Racecourse Association. As has been mentioned, in 1997, after seven years of disputes, that agreement was terminated by the RCA. That is a fundamental point with respect to the relationships that have existed all the way through. To ensure that betting rings were properly administered after the termination of that agreement, the levy board instigated a review.
Following an extensive consultation, the review recommended that a new administrative body should be established to be responsible for the administration and conduct of on-course betting rings. That new body was of course the National Joint Pitch Council. That brings me back to the point of my intervention on my hon. Friend the Member for Hove (Ms Barlow), which was to arrive at an understanding of what the NJPC’s role had been. I am informed that it never gave anyone the lifelong entitlement to a pitch. There were always qualifications, particularly as the new legislation came in: people had to study the intention of the new legislation.
The NJPC is not a public body. It is a company limited by guarantee. The Department has no direct influence over its decisions. Its board includes a number of bookmaker representatives. Its functions are essentially administrative, relating to the conduct of bookmakers on race courses through the national pitch rules. Among other things, those rules cover the allocation of pitches to on-course bookmakers. It is a condition of the levy board’s certificates of approval that race courses observe the national pitch rules that the board has endorsed.
In late 1998, the NJPC also set up a system for the auctioning of pitch list positions. That was implemented at the request of the levy board to ensure greater freedom, transparency and accessibility in the on-course market. As we have heard, it replaced the old “dead men’s shoes” system, whereby almost the only way to secure a pitch position was through inheritance. The auction system was a mechanism for one bookmaker to sell a pitch list position to another. Agreement was reached with the levy board and the NJPC on those auctions.
My hon. Friend the Member for Livingston is right to say that under the Gambling Act 2005, the certificate of approval system will be replaced. From 1 September 2007, the new premises licences will be issued by local licensing authorities, which will have a duty to take into account the three objectives of the Gambling Act: keeping gambling free of crime; keeping gambling fair and open; and protecting children and vulnerable people.
The new system of licensing will be clearer, more transparent and more consistent than ever. It will focus on the regulation of premises, including race courses, rather than on their administration, and allow race courses and bookmakers to develop a mature, commercial relationship for the first time. That is entirely appropriate, because it is good for racing and for bookies, and it is in line with this Government’s aim of minimising bureaucratic burdens and allowing successful industries to run themselves.
It is not right to suggest, as some have done, that the Gambling Act itself does away with pitch lists. Although the certificate of approval system provided a certain authority to support the pitch list system, the lists themselves have never been recognised in statute. They do not—and never have—confer ownership of land to any of the pitch-list place holders, and it remains open for race courses and bookmakers to retain the existing system, or similar arrangements, if they so wish.
I freely recognise that the RCA’s announcement that it will cease to recognise the lists from September 2012 has caused great consternation among bookmakers, as has been said today.
I am grateful to my hon. Friend for that intervention—so quickly something rises and then is shot down. The spirit of what my hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis) is trying to achieve is the feel that I get from the tenure of the debate. We are alive to the concerns that exist.
Anyone who has followed the development of the Gambling Act will know that it has been characterised by frequent and thorough consultation, as has been said. We raised the issue of the administration of on-course betting in a consultation in 2000, and again last year. We received representations from bookmakers and race courses, and we examined them all closely. I know from letters that we have received from constituents that many are worried about the future of their bookmaking businesses post-1 September.
It is worth saying straight away that the Gambling Act itself does not threaten bookmakers’ businesses or livelihoods in the way that has been described. Let me explain why. As I have already mentioned, the mandatory and default conditions attached to premises licences continue to require race courses to provide a place on course for bookmakers to carry on their business.
It is worth reflecting on the position paper issued by my Department in 2003 on the licensing of betting premises, to which the hon. Member for Ryedale (Mr. Greenway) referred. It set out the Department’s views very clearly. Paragraph 2.6 said that
“it would seem odd that racecourses should not be able to ask for market prices from on-course bookmakers for using areas of their land on which bookmakers are conducting a business.”
The paper went on to suggest that bookmakers would need a transitional period during which to recoup the value of their pitches and place their businesses on a profitable footing before the fully commercial system was introduced. We have honoured that proposal by providing a transitional period in the mandatory and default conditions: the five times rule will continue until 2012. For its part, the RCA has confirmed its current intention to honour the existing pitch list system for the same period.
I understand that the NJPC continued to run auctions for pitch list positions up to February this year. That was the NJPC’s own decision. I note, however, that in auctions since 2005, a clear warning has been given to potential buyers that they should familiarise themselves with the new arrangements set out in the Gambling Act before deciding whether to bid for positions. That is why I asked my hon. Friend the Member for Hove about that point. I am not unsympathetic to some of the things that she said, and I wanted to hear her view.
As the hon. Member for Bath (Mr. Foster) has said, we have facilitated an industry working group to look at the wider administrative issues that relate to on-course betting. There are copies of the group’s terms of reference and membership in the Libraries of both Houses. On the question that he asked me, I should make it clear that the working group, which is drawn from representatives of betting and racing, took a decision not to include consideration of this issue in its terms of reference.
I realise that the definitive nature of the RCA’s announcement has caused some alarm, and, in the spirit of continuing consultation and co-operation, I want to propose two areas for further action. First, I want the conclusions of the working group on the regulation and administration of on-course betting to be put out to consultation. Although, as I have said, the working group is not charged with examining the allocation of pitches, it is developing important proposals about an administrative framework to ensure the continuing smooth operation of on-course bookmaking, in the interests of the punter. I should like the proposals to be published and thus open to consultation for all interested parties as soon as possible. I make it plain now that I should also like them to enshrine principles of integrity, propriety and proper accountability.
Secondly, I want the race courses’ representatives and on-course bookmakers to sit down together to consider how the existing pitch lists and the new commercial arrangements after 2012 can co-exist. It is only right for a mature and modern industry to come to a sensible and workable conclusion of its own making. I say that not only as the new Sports Minister, but as a former Competition Minister in the former Department of Trade and Industry. We have tried to make industry become responsible for its own decisions and its own future.
There is clearly a divergence of viewpoint between what the RCA wants to achieve and what the on-course bookmakers want to achieve. I am grateful to the hon. Member for Ryedale for offering the all-party group on racing and bloodstock to facilitate those discussions. It is only by the bodies that I mentioned coming together that we can get an agreement. People have got the right to go to law, and nobody can take that away from these individuals.
I remember the Minister taking the Consumer Credit Bill through Parliament. He was keen to make the same point then: it is always best if the industry can manage its own affairs well. However, he always said that it was necessary for Government to reserve the right to legislate if necessary. Will he do the same in this case?
I am grateful to my hon. Friend for that intervention. He is right that that was the style of operation in that regard. The complexity in this case involves the change from the certificates to the licensing regime that we put in place, and it would make legislation more difficult. I am prepared to say that this situation needs to be resolved—it cannot and should not be left unresolved. Meetings should take place, and we will facilitate them. I am happy to meet hon. Members to discuss this further, although I am sending the message out loud and clear that it should be the RCA and the on-course bookmakers who reach an adequate conclusion, because that is the right way forward.
As I have said, I shall continue to monitor the situation. Hopefully, we can get the interests of the racegoer and racing put to the forefront, because, as I have found in my short time in this job, many other issues in racing will need to be addressed. Racing is clearly an integral part of our culture and society, and I will look to the horse racing authorities to play their part; a number of disputes seem to be taking place on several issues and we now need to bottom them out. I am prepared to play my part in that, in consultation with hon. Members. Although the reassurances that I have given today will not meet all the requirements of the on-course bookmakers, I hope that they show the intention: this was not about the Gambling Act; it is about the ability of the industry to sort itself out—I hope that that is what will take place.