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Horse Racing

Volume 467: debated on Wednesday 21 November 2007

Motion made, and Question proposed, That the sitting be now adjourned.—[Steve McCabe.]

It is a pleasure to serve under your chairmanship, Mr. Atkinson. I am most grateful to have secured the debate, but I shall limit my comments, because I know that a number of right hon. and hon. Members feel very strongly about certain aspects of today’s racing scene and I want to give them, if possible, an opportunity to speak.

It is unfortunate, but in a way apposite, that the House is discussing this issue today—the day of the funeral of Sir Tristram Ricketts. Sir Tristram, who devoted his working life to the racing industry, was chief executive of the Horserace Betting Levy Board and a previous chief executive of the British Horseracing Board. Nobody, or few people, contributed more to our industry or worked harder on behalf of British racing. I know that some hon. Members have been unable to attend the debate because they will, quite rightly, be attending his funeral this afternoon.

I share hon. Members’ enthusiasm for this, first and foremost, great sport. However, racing is not just a sport but a thriving industry, encompassing bloodstock, race course businesses and, of course, betting. British horse racing is the envy of the world, but the whole industry needs to come together, perhaps as never before, if racing is to flourish. The overall news is positive. For the first time in 80 years, a new race course will open at Great Leighs. According to the British Horseracing Authority, the industry now employs 88,000 people. In 2007, there have been 9,000 races—it seems at times as though there are almost as many bodies representing different parts of racing as there are races. A total of £10 billion is bet annually at off-course bookmakers.

The following is not a party political point; I hope that the Minister will agree. I shall come to the party political points shortly, so I hope that he will not be too disappointed. What racing does not need is the dead hand of Government, but regrettably this Government’s procrastination and successive blunders mean that the Government are now more involved in racing than ever.

I am a Member of Parliament for a rural constituency—albeit sadly one without a race course, although Exeter and Newton Abbot are temptingly close across the estuary—where racing and associated businesses provide valuable local employment as well as much-loved recreation in the south-west. It is worth remembering that half the 59 race courses in this country are in rural areas and play at times a perhaps disproportionate role in the local economy.

With your permission, Mr. Atkinson, I shall debate two main issues this morning: the Tote and the future of the levy.

I just want to make a point before the hon. Gentleman moves off the issue of the local economy. He may be aware that Musselburgh race course is in my constituency, and it is a small and classy course. It creates employment and is great for the local economy in terms of tourism and the like. Does he agree that any reduction in the levy would destroy my local race course and British racing?

The hon. Lady has quite properly secured her press release for today. If she will bear with me and allow me to develop my thoughts on the levy, I think that I will answer her and she will not be disappointed.

Pitch positions—a very important issue—were covered comprehensively in recent Westminster Hall debates, two of which were instigated by my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), whom I am pleased to see with us this morning, and one by the hon. Member for Livingston (Mr. Devine), who is also present. The issue is now the subject of a hearing of the Select Committee on Culture, Media and Sport, so I will not rehearse the arguments this morning. However, I would like to ask a couple of questions relating to pitch positions.

Does the Minister now admit that before the Gambling Act 2005, list positions were guaranteed by certificates of approval as issued by the levy board? Does he agree that that Act enabled the Racecourse Association to make its announcement on 14 March this year to refuse to recognise on-course bookmakers’ list positions? Was that an intentional consequence of the legislation?

The Government’s nationalisation of the Tote was profoundly wrong, and what has happened since has been nothing short of a farce. The Government at the time—it is good to see the previous Minister for Sport, the right hon. Member for Sheffield, Central (Mr. Caborn), present as well—gave cast-iron assurances that racing would not lose out from the sale. Initially, Ministers promised that the Tote would be sold only to the Racing Trust for £50 million, but later they gave a pledge that, in the event of its being sold to another buyer, racing would receive half the proceeds from the sale. However, either by conspiracy or cock-up, it transpired that such a move would contravene EU state aid rules. I now understand that PricewaterhouseCoopers, which is advising the Government, has reviewed racing’s latest offer of £320 million for the Tote and advised that it risked again being blocked by Brussels. Is that the case? If so, what contingency plan does the Minister have in case the Tote is again not sold? How will the Government honour their manifesto commitment to benefit racing? What compromises have they tried to broker? The Government must now decide the future of the Tote, and an indication from the Minister this morning, setting out once and for all the endgame and a timetable, would benefit all.

When licensed betting operators were legalised in 1961, it was with the proviso that a mechanism should exist to recycle some of the proceeds to racing. The levy, it should be remembered, had two criteria: to meet racing’s needs and to take into account the bookmaking industry’s ability to pay. As hon. Members are aware, the European Court of Justice ruling on data rights in 2004 prevented an alternative revenue stream for racing from the sale of pre-race data to bookmakers, which might have offered a credible alternative to the levy.

The Government then commissioned Lord Donoughue’s future funding of racing review group, which concluded in 2005 that a commercial alternative to the levy would require the Government’s intervention to ensure that any sale of picture and pre-race data rights did not fall foul of competition law. Many of us believe that the levy, in its current form, is not the most desirable or even a desirable way of funding racing, but we are where we are.

The Minister must now make a determination for the 47th levy so that racing can plan for its future. He will be more than aware of the robust discussions going on between the bookmakers and the race courses about the levy. Does he share my view that Turf TV is a commercial decision divorced from the levy and does he believe that it would be wrong and not in the best interests of racing if his decision on the levy had the net effect of competition not flourishing? Hon Members will be aware that the major bookmakers believe that the introduction of Turf TV will lead to an increase in their costs. Does the Minister agree that the rationale used by the bookmakers for a £50 million reduction in the levy, from £85 million a year to £30 million a year, was based on the extra costs associated with receiving Turf TV?

I congratulate the hon. Gentleman on securing the debate and I agree with what he is saying. I am sure that he will agree that a reduction of that proportion in the levy will not only affect prize money in elite racing, to the detriment of the sport, but be very detrimental to medium-sized race courses, such as Wincanton in my constituency, and there will be a knock-on effect on training yards, which will not be able to stable the same number of horses in the future.

The hon. Gentleman makes a good point. Perhaps, if he is lucky enough to be called by the Chairman, he will speak further on it. The number of races has risen, and stakes and prizes are a serious issue. I do not think that a reduction of the nature that I mentioned would be in the best interests of racing, by which I mean race courses and bookmakers alike.

Has the hon. Gentleman calculated how many of the 57 race courses would close down in a period of five years if the levy became a commercial transaction?

The right hon. Gentleman brings much more experience to this debate than I. Maybe he has made that calculation; I have not. Suffice it to say that I think that a number of race courses would be left vulnerable if the levy were reduced in that way.

What conversations has the Minister had with the Advertising Standards Authority regarding the initial leaked findings, reported in the Financial Times on 6 November, disputing the basis of the bookmakers’ figure? Turf TV believes that its product should cost £4 million extra a year for all bookmakers, whereas Satellite Information Services believes that the cost is closer to £50 million. Does he have a view on that?

As I said, the Minister must now decide the level of the 47th levy. Does he not agree that the best thing for racing would be to leave the levy at the same rate? That would undoubtedly fail to please bookmakers and race courses alike, but it would be a credible position for the Government at this time. Once he has made the new determination, will he redouble his efforts to bring all interested parties in racing together to modernise the levy in order to ensure more equitably racing’s long-term future? It is an aspiration that should unite us all.

I congratulate my hon. Friend the hon. Member for East Devon (Mr. Swire) on securing this debate. I say “Friend” deliberately, because when I first came to this place, we served on a Committee together, and he was generous and kind. He has been very helpful in the short time that I have been here. On a personal basis, I think that he is a big loss to the Opposition Front Bench.

Absolutely. It is ruined now.

I want to deal with the poor put-upon pitch bookmakers, but first—recognising the subject of the debate and the fact that a court case is taking place on which we cannot comment—I shall refer to an article written by Barry Dennis, the well-known bookmaker from Channel 4. He pointed out in The Sun on 13 October that he had bet £20,000 with Betfair on a photo finish, the outcome of which he already knew. Within minutes he had earned nearly £2,000. The House needs seriously to look into such practices. Barry Dennis describes them in his article as fraud, and I do not think that that is an unfair description.

I speak in defence of on-course bookmakers, who happily relieved me of all my money at a recent meeting in Ayr. My good friend Frank Carroll managed to pick winners at 33:1, 25:1, 18:1 and 16:1, but sadly I did not listen to him. Bookmakers are important to the colour of horse racing. It is an enjoyable sport. My predecessor Robin Cook said that there were two thumps that he liked: one was the thump of a ballot box on the night of an election, and the other was the thump of horses’ hooves at a race meeting. He was well known as a friend of racing, not just in this place but throughout the United Kingdom.

On 14 March this year, the Racecourse Association announced that it would confiscate assets from on-course bookmakers to which the race courses had never before expressed a claim. It was a bolt out of the blue. It was commercial opportunism, and I shall explain why. Since 1958, through various regulatory regimes, it has always been understood by all interested parties that list positions were assets held in perpetuity subject to the existence of the race course in question. The letter of 14 March was the first that on-course bookmakers, the National Joint Pitch Council, the body responsible for the administration of list positions as of 1998, or the Horserace Betting Levy Board, the statutory board responsible for awarding certificates of approval—I agree with the hon. Member for East Devon that there are too many bodies in racing—had heard of the Racecourses Association’s intention to cease to recognise list positions.

The chairman of the NJPC said on 13 November in a Culture, Media and Sport Committee oral evidence session that he was stunned by the announcement, and the levy board representative declared that he was surprised. Neither body could understand the justification for the RCA’s announcement. It had been understood by all parties involved that list positions were held in perpetuity. Not only was it a shock for the bookmakers, but it threatened their livelihood, their retirement and their families. Before the RCA’s announcement, the NJPC valued list positions at £70 million. After the announcement, it valued them at £40 million and falling daily. Those assets, bought in good faith, will be rendered worthless by 2012.

Does not the hon. Gentleman find it strange, as do I and perhaps many sitting in this Chamber, that those pitch positions were traded from day one of the NJPC’s existence without the Racecourse Association commenting at any point that people were trading positions of which they had no ownership? The Government should make it clear that it was never their intention to allow the race courses to take away an absolute right that was being traded.

I agree totally. The right hon. Gentleman and I have both been involved in previous debates on the matter in this Chamber, and I think that our views are as one.

Why was the RCA’s announcement so surprising? In 1998, the outmoded system of transfer through inheritance, or dead man’s shoes as it was called, was replaced by a trading system. On-course bookmakers could finally buy and sell their assets. The post-1998 system was approved and adhered to by all parties involved, including the RCA, which was consulted at every stage of discussions and assented fully to the regime’s establishment. Indeed, the race courses benefited from the system, as substantial sums from the commission and sales of list positions were spent on race course improvement. Everybody benefited.

Interestingly, at the Select Committee’s oral evidence session on 13 November, the RCA said that it was the only party involved in the post-1998 trading system to believe that list positions bought by on-course bookmakers were not assets held in perpetuity.

Would not the hon. Gentleman strengthen his argument further by reminding the Chamber that in 1998 a certificate of approval required that list positions be acknowledged and accepted?

The hon. Gentleman makes a good point, which I may not have included in my speech. It adds to my argument, and I am grateful for it.

The NJPC, the levy board and, most importantly, bookmakers—both buyers and sellers—thought that list positions were held in perpetuity, but the RCA said that it did not. That cannot be so. At the time, race courses had to recognise list positions to receive a certificate of approval from the levy board. The RCA could not have predicted a change in that arrangement. Like all other parties involved, it must have based its decisions on the assumption that the regime established in 1998 would continue. The only change that it might have predicted relates to the five times rule—the rent—which is an entirely separate issue. That is an important point. Furthermore, as Tom Clarke, the chairman of the NJPC, said, the RCA did not mention a time limit or raise the issue of list position tenure until the 88th meeting between all the parties involved. I repeat that it was the 88th meeting before the issue was first raised.

At the meeting on Wednesday 7 November between the Federation of Racecourse Bookmakers and the RCA, held under the Minister’s auspices, the FRB asked the RCA to explain the timing of its decision. It asked why the RCA had waited until March 2007 to make the announcement given that, until then, the race courses had been perfectly happy with the status quo—the post-1998 system—and had never questioned the tenure of list positions. Something must have changed. In response to that question, one of the RCA representatives explicitly stated that the decision was made in March 2007, just after the new regulations came into force in February. If that is not an admission that the proposed theft—that is what it is—of bookmakers’ assets had been facilitated by the Gambling Act 2005, then I do not know what is.

It is clear that the Select Committee was thoroughly unimpressed at the Racecourse Association’s evidence. Although the other parties that gave evidence, including the NJPC and the levy board, understood that bookmakers held their list positions in perpetuity, the RCA said that it did not, despite having representatives on all statutory bodies. That does no credit to the race courses that are members of the RCA.

The RCA’s chief executive disingenuously referred continually to property rights with regard to list positions, despite knowing full well, because he had been told on a number of occasions, including in front of the Minister, that on-course bookmakers had never argued that list positions conferred a property right. It has been explained to the RCA on numerous occasions that list positions are assets held in perpetuity, subject to the existence of the race course in question. Furthermore, I remind the House that the dispute is over the status of list positions—bookmakers’ assets—and not the rent. It is important to make that point because of attempts to cloud the issue.

Issue 10 of the RCA’s update for racecourses states that the proposal to move the five times rule to commercial arrangements between racecourses and bookmakers was originally made by the Government in March 2003. That statement disingenuously failed to recognise that the position papers of the Department for Culture, Media and Sport had recommended movement to commercial arrangements only from the five times rule. The Government’s position on list positions, as stated in paragraph 2.6 of the DCMS paper, was that we had already seen the removal of the “dead man’s shoes” on horse race courses and a move to fully commercial sale arrangements for pitches. Again, highlighting that point shows that the argument is flawed.

The RCA is effectively advocating the move to fully commercial arrangements, with all the implications that it would involve for racing. I am sure that the House will agree that it is an interesting proposition, as it totally undermines its argument. We already have fully commercial sale arrangements—on-course bookmakers buy and sell their list positions. The only problem for the RCA is that the race courses are not directly involved in those transactions. They want to be involved. They want more money. That is what they mean by commercial arrangements. However, although wanting more money is acceptable, it does not justify theft.

The RCA is disingenuously attempting to use the umbrella term “commercial arrangements” to refer to both rent and assets when they are, and should, remain entirely distinct and separate. As the Select Committee pointed out again and again, it is extremely difficult to understand why the race courses could not recognise bookmakers’ list positions and at the same time undertake negotiations over the rent. That is what should have happened. On-course bookmakers have always been willing to negotiate over the rent. However, they also want their pitches back. Rent and assets are separate issues. We should not let the Racecourse Association muddy the water.

I call upon the race courses to disassociate themselves from the comments and actions of the chief executive of the RCA. I call on the RCA fully to recognise the list positions of on-course bookmakers. Failing that, the Government should bring in secondary legislation that invests the duty of preservation in a statutory body.

I congratulate my hon. Friend the Member for East Devon (Mr. Swire) on securing this debate. I have initiated a number of debates on horse racing, and I know that there is tremendous interest in the sport and thus in the debates. I therefore congratulate my hon. Friend on securing a 90-minute debate, which allows a few more hon. Members to make a contribution.

My hon. Friend mentioned that holding the debate today is appropriate but also slightly difficult, given that the funeral of Sir Tristram Ricketts is taking place this afternoon. I pay a brief but personal tribute to Sir Tristram, who was well known throughout the sport. He always had time for everyone; he always had a smile, a joke, a word of wisdom for people. He will be sadly missed not only by the sport but by his many friends. I hope to set off for the funeral immediately after the debate. I suspect that I will have to stand outside, as so many people will be there. Nevertheless, it is important to be there. In that respect, it is a sad day.

My hon. Friend was right to say how important horse racing is to the country and to rural communities. He was right also to say that it is a magnificent spectacle. There can be no doubt that it is the envy of the world. It is my great privilege to represent what I consider to be the greatest race course in the world. Cheltenham race course at Prestbury Park falls within my Tewkesbury constituency. Of course, racing is equally important to those who represent tracks such as those at Hereford and Worcester—and, Mr. Atkinson, the smaller tracks such as Hexham—as that is where horses start their racing careers. They do not start at Cheltenham, although those that are lucky may end up there.

A great process has to be gone through in order to reach the top. All race courses are important. Whatever happens, and whatever decisions are taken, I hope that we retain 59 race courses—and possibly one or two more.

Although I am fond of Cheltenham, even the hon. Gentleman would have to confess that Aintree in my constituency is probably the premier race course.

I agree with a lot of things that the right hon. Gentleman says, but I cannot quite agree with that comment. However, I may return to the point later. It says something about me that I know Members more by the race course that they represent than by their constituency.

Racing is a fantastic sport, and it is the envy of the world. Much of it is right and going in the right direction. The quality of the racing at Cheltenham this weekend was tremendous. However, there are problems. To highlight those problems is not an attempt to run the sport down; it is a refusal to be complacent about the future of the sport, which is probably what motivated my hon. Friend to hold this debate. It certainly motivated me to speak today. My comments are meant not to be negative but to act as something of a wake-up call to the industry’s problems.

One problem was mentioned by my hon. Friend. There are so many different parts to racing—the horses, the owners, the jockeys, the trainers, the stable staff, the race courses, the bookies and the bodies that control racing. In a sense, that is its weakness, because all those elements are indispensable. If one removed jockeys there would obviously be no racing, and if one removed trainers there would be no racing either. Each element is extremely important, yet the industry seems unable to come together and progress in the right direction.

There are a number of current disputes, one of which relates to the emergence of Turf TV. I do not say that Turf TV is a bad thing in itself, but the emergence of a second provider of pictures to betting shops is causing difficulties, and a dispute on that is the last thing that racing needs. I do not want duplication of costs, because it will have a knock-on effect. My hon. Friend the Member for East Devon was absolutely right to say that, technically and legally, the dispute is nothing to do with the levy, but in the real world money has to be considered, and the fact is that there is only one pot, so something will have to give. If only half of race courses are featured in bookies in future, less money will be bet on racing in those shops, which means that less money will pass through the levy system. That brings us back to the same point: less money for race courses, and difficulties for them.

We need to look at things in the round. We cannot say that the levy is irrelevant, even if that is legally and technically correct. When bookmakers come to the Minister and tell him that they want to pay £35 million instead of £90 million, he will have to take everything into account. I hope that he will not reduce the levy payments, because that would have a negative effect on race courses, but the trend for the levy is downward.

I am emphatically not asking the Minister to scrap the levy; I am saying to racing that it should look beyond the levy, because the levy has had its day. We have to reach commercial agreements and find commercially realistic ways of funding racing.

Does the hon. Gentleman agree that, although a longer-term solution is needed, we first need a resolution of the current negotiations and of the position on the levy?

The hon. Lady is right. The Minister will have to decide this year’s levy, and I hope that he will do so shortly and without there being too much acrimony over the decision. I am not saying that the levy should be scrapped next year, or even the year after that. I am not saying anything at all to the Minister on that point. My comments are directed instead at the racing industry, because it must not be complacent and assume that the levy will remain for ever, or that it will always remain at its present level. As I have said, the recent trend has been downward, so industry representatives should not come to us saying, “The levy is not enough, long live the levy,” because that argument will not be sustainable for too much longer.

I know that Lord Donoughue produced an important and impressive report whose interim conclusion was that there might be difficulties in finding commercial solutions and appropriate further arrangements. Nevertheless, those solutions must be found. I am not aware that football, cricket, tennis or any other sport in this country is financed by a tax, which is what the levy is. Nor am I aware that the Minister has power to intervene in football transfers or in Wimbledon prize money. That is not his role, and nor is it the role of any member of the Government. I want racing to change so that it grows in confidence and can create more income of its own, and there are ways in which it can do that.

One of the problems has been the European Union—that wonderful organisation that does British business so much good.

Indeed. The EU stepped in and stopped the sale of pictures and data en bloc, but the same EU laws exist for other sports, so I do not think that racing can say, “There you are, Europe would not let us do it.” We must look beyond that, and one possibility is singular selling, which replaces sale as a whole with individual sales.

We have all been at race courses in the rain and found ourselves unable to get a decent cup of tea or a decent meal in proper facilities. That is not true of all race courses. It is not true of Cheltenham, for instance, but it happens at an awful lot of other race courses, and they could gain much more income if they marketed themselves better and provided better facilities. I have heard the complaint that some young people will not go to a certain race course on a wet Monday afternoon. Why should they? They will go to race courses where there are proper facilities, and providing such facilities would give other race courses the opportunity to raise more money themselves.

I agree with my hon. Friend. However, does he agree with me that it is now much more expensive for race courses to lay on a day’s racing? They have all the pressures deriving from the regulatory burdens that apply to all industry, including the working time directive. They do not have the critical mass that other sports have, so the situation is tougher for them. In cases where a race course is failing to provide any sort of decent service to the public, I agree with my hon. Friend’s comments, but the vast majority are trying their best and having a tough time of it.

My hon. Friend makes a good point. We have all been at race courses where the racing has been held up because a second ambulance was not available. I am not saying that a second ambulance is unnecessary, but that is a small example of the health and safety difficulties. The extent of other regulations is a difficulty too, as are add-on costs. Nevertheless, some race courses could do more for themselves, and I think that they will have to.

While the levy has been in place there has always been an excuse not to look beyond it, and to avoid self-help. I agree that the levy should be continued for the foreseeable future, but the industry should try to generate more income for itself and possibly become less reliant on the bookmakers. The share of bookmakers’ takings in betting offices is falling; I think that it is now about 50 per cent., but for greyhound racing it probably used to be 100 per cent. when betting shops were first licensed. The levy removes the incentive on bookmakers to promote racing, because they pay a levy on racing whereas they do not pay any levy on football bets. I say to the Minister that he should carry on with the levy but consider how racing can look beyond the levy and help itself. In 1998, I introduced a ten-minute Bill to try to deregulate race courses so that they could do more on non-race days, and that idea should be revisited, because race courses constitute a huge asset that is rarely used outside of racing days.

I turn to the situation on the Tote. I make no criticism of the current Minister, who was not in his job at the time of the recent legislation. His predecessor, the right hon. Member for Sheffield, Central (Mr. Caborn), has unfortunately left his seat, but I make no criticism of him either. When the Gambling Bill was being passed, an unusual aspect of it was that it did not include any stated purpose on the Tote. One purpose of the Bill was to transfer the Tote to a racing trust, and a shadow trust was set up which was chaired by Lord Lipsey, so the intention to transfer existed. Amazingly, however, that purpose was not stated in the Bill. Notwithstanding that, the Bill mentioned nationalisation, because the Government did not own the Tote so, before they could transfer it, they had to deal with the ownership position. However, the Bill did not deal with transfer to the trust. A number of us pointed out at the time that that was potentially difficult, and that has proved correct.

My hon. Friend the Member for East Devon is right that the figure for the transfer discussed at the time was £50 million. I argued that that was too much, because the Government did not own the Tote and no Government had put any money into it. The taxpayer was not owed anything, so I did not see why the Government should take any money out of the Tote—or rather, not out of the Tote but out of racing, as there was nowhere else for it to come from. We now find that the transfer figure is something like £400 million. If £50 million was unjust, £400 million is obscene. My speech is not party political, but the Government need to provide some answers on that.

At the time of the Bill’s passage, our friends in Europe got involved yet again. The same old European Union said, “No, you cannot transfer it for that amount of money”—whatever figure applied at the time—“because that would be state aid.” I really cannot see why that should be the case. How many civil servants did the Government employ? Did none of them see that coming when the 2005 Act was being drafted? I shall be kind and not blame the Government, but I think that Parliament has failed the Tote.

I believe also, however, that the increasing strength of the Treasury over the last 10 years has played its part in this. Yes, we can blame Europe—if there is an opportunity to blame Europe, I shall be there—but the man who was Chancellor for 10 years was so strong and powerful that he became Prime Minister, as we all know, and now £400 million is being quoted. No Government would willingly throw that away.

The hon. Gentleman keeps talking about the sums of money, but has not yet addressed—I hope that he will in a second—where that money will go. He will recall that although it is not mentioned in the Gambling Act 2005, the then Minister, the right hon. Member for Sheffield, Central (Mr. Caborn), gave a clear undertaking in Committee that a 50:50 split would enable 50 per cent. of the sale to go back into racing. Does he share the view that it would be very helpful if the Minister could confirm that on the record today?

Yes, I hope that the Minister will confirm that. However, I am still concerned about the £400 million. Although the hon. Gentleman makes a very good point, my speech is more concerned with what will happen to the Tote. However, he is right and makes a very important point.

As I understand it, the consortium being put together is not coming up with the money that the Government—either because the Treasury needs it or because the European Union would object if it was any less—require. If that is the case, will the Minister give the Tote time for reflection? I am well aware that it has been years since the then Home Secretary, now Secretary of State for Justice and Lord Chancellor, came to the Tote annual general meeting and pledged that it would be handed over to the Racing Trust. I am not asking the Minister to delay it for a few more years—far from it! However, if we have gone so long and so far down the road, can the Tote not be given perhaps just two or three months in which to reflect on the situation and perhaps consider other options? I say that for this reason: the Tote was set up in 1927 in order to benefit racing. I fear that if it is put on sale on the open market, it might cease to exist. That is unthinkable. Would the Cheltenham gold cup still exist? Would the Tote’s financial contribution to racing still exist? That goes for many other things, too.

We have talked about the financing of racing and we recognise the pressures. The last thing that we need is for the amount that the Tote puts into racing to disappear simply because Parliament has botched the sale. If an agreement cannot be reached during the current negotiations, will the Minister please allow a period of reflection, so that we can look at what is going on, have discussions and decide on the way forward? Given that it has taken years to get to this point, I do not think that another three months or so is asking too much.

The hon. Member for Livingston (Mr. Devine) talked at length about the pitch dispute. I do not want to get into that too much, other than to say that racing does not need yet another dispute, and I hope that it can be resolved. However, I must say that it cannot be a case of dead man’s shoes—we must move on from that. I have every sympathy for the bookmakers who felt that they had bought the right to a pitch, but legally I do not think that they had. We must move forward commercially. I hope, however, that that can be done sensitively and with some recognition that people felt that they had bought a right to a living. However, the jobs for life, the dead man’s shoes and the seniority that existed in the past are from a bygone age, and we must move on.

I thank you for your time, Mr. Atkinson. I apologise for having gone on for perhaps a little too long, but I think that there are some very important points to be discussed. However, I shall finish by echoing the words of my hon. Friend the Member for East Devon: racing is a fantastic sport and an absolutely wonderful spectacle. And long may it continue to be so.

I congratulate the hon. Member for East Devon (Mr. Swire) on securing this very important debate. I agree with him that Turf TV has immense implications throughout the industry. I would like to return, however, to the matter mentioned by my hon. Friend the Member for Livingston (Mr. Devine) although his exposition of the problems of pitch bookmakers was so full that there is very little that I can add. However, I feel that I must add my weight to his cause, particularly in the interests of constituents of mine such as the Morrill family and Adrian Pariser.

Surely the current situation that many in the trackside betting industry find themselves in was never intended when the Gambling Act 2005 was first proposed, and it is important to look at the specific matter of trackside list positions and their future allocation. Obviously, the gambling industry as a whole has undergone immense change over the past few years. I disagree with the hon. Member for Tewkesbury (Mr. Robertson) because I think that it is completely different from the inherited system that has damaged the livelihoods of constituents of mine and of the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) who has done so much to highlight the problems in recent years.

Throughout the many changes, however, the horse racing industry has shown a willingness to reform. Outmoded practices, such as the notion of an inherited seniority being handed down from parent to child have now given way to the trading of assets in a free and open market. The opening of trade in pick-list positions has led to much-needed fresh blood and new investment in the racing industry, but that fresh blood itself is feeling let down and abandoned by the industry, because those people are now being told that the pick positions, in which they invested so much money, are no longer theirs. Most in the industry would agree that changes made in recent years to modernise it have been of immense benefit to all parties concerned, until now perhaps.

The RCA will continue to argue, of course, that because it owns the physical asset, it is up to it to determine, by whatever means it sees fit, who trades there. However, we must say also that the pick position is merely the order in which a bookmaker can choose their position of trade on the race course, and not an actual physical pitch position. That distinction is obviously important to the RCA, but I suggest that the argument is deliberately two-dimensional in its thinking. An asset does not need to be physical. For example, a CD manufacturer does not own the music that it presses on to plastic. Already, we have agreed on, and spent many hours debating in this place, the concept of intellectual property. I argue also that there is such a thing as moral property, which is what the bookmaker owns.

The RCA clearly recognises the accrued value of a bookmaker’s position on a pick-list, otherwise why would it be attempting to wrestle the control of the pick-list away from the bookmakers? Although it has always been acknowledged, ever since the 2001 gambling review report, that negotiations would take place on admissions charges for bookmakers to race courses, as my hon. Friend the Member for Livingston has mentioned, the tenure of list positions was never in question until March this year, despite numerous—88—meetings on the subject. It has always been understood by the buyer, seller and administrator that list positions were to be held in perpetuity.

The decision of the RCA to lay claim to the commercial benefits to be gained by the auction of valuable pitch positions has, as we have heard, stunned the National Joint Pitch Council, which set it up in the first place. It is quite disingenuous for the RCA to argue back in 2001, and then in 2003, that the Government advocated a change in the arrangement for pitch allocations and a move to commercial arrangements. It is a short-term smash and grab. I believe that the Government had no such intention, and that that is an interpretation of the 2005 Act, which serves only to increase the commercial gain of the RCA, at the expense of the very people and businesses without which there would be no trackside betting industry—in other words, the very people and business that, together with the trainers and jockeys, give the entire industry its flavour and value.

Indeed, the Government’s recommendations went only as far as a change to the five-time rule. That refers to the rent of the pitch, not to the asset itself—the moral property. There is no reason why commercial arrangements by the RCA about the rent cannot take place while recognising the bookmakers’ list positions, as it has always done. The RCA, again disingenuously, is attempting to use the umbrella term “commercial arrangements” to refer to both the rent and the assets, when, in fact, they are, always have been, and should remain entirely distinct and separate.

We are talking essentially about the livelihoods of hundreds of people in our gaming sector, but particularly about the family bookmakers, as we heard during the Select Committee on Culture, Media and Sport sittings, which many Members present attended. The family bookmakers have spent generations in the industry, and my constituents who trade under the name, Taffy, have been hit by a triple whammy: first, over the father-child rule, secondly over pitch allocations and sales, about which I cannot go into detail because of actions taken by the right hon. Member for Chingford and Woodford Green, and finally, over losing the last thing that they possess—their pitch position. The family have been hit three times within one generation, but the measure will affect small rather than large bookmakers. Large bookmakers will also be damaged, but they have large assets, and we are discussing small, family firms.

Trackside bookmakers are asking for nothing more than clarity about the assets that they have accrued either through generations of hard work or by commercial acquisition. Let us not forget that some bookmakers in the south-east have spent more than £1 million buying something that they believed they would hold in perpetuity. We want those assets to continue to be recognised as the industry standard, as all concerned have always understood them to be—that is until suddenly last March when the bombshell was dropped on the bookmakers.

For the RCA to use the period of transition between the passing of the Gambling Act 2005 and its implementation as a means to wrest control of the assets of hundreds of trackside bookmakers is a blatant misinterpretation of the Act as it was intended. We have it in our power to set out in clear guidelines for both the RCA and the bookmakers precisely which areas are open to reform under the new legislation, and which areas are not. We, as legislators, have a responsibility to take any misinterpretation of legislation on board and clarify it, not leave it entirely up to the industry. Until the guidance is made clear, the trackside betting industry will remain at an effective standstill. Until we clearly define the parameters of the 2005 Act, many in the industry will not know whether their most important commercial asset, which involves the future of their children and their business, is to be rendered entirely worthless. The situation is entirely unacceptable.

I agree wholeheartedly with the hon. Lady. As somebody who sits on the Culture, Media and Sport Committee, I recognise the position that she outlines, but if the RCA decides to press on and the Government will not intervene, does she at least agree that the bookmakers concerned should be compensated for the loss of their assets? If she agrees, does she think that the compensation should come from the race courses or from the Government?

I agree that should the RCA continue in that way—and I sincerely hope that it will not because it is not a moral route—it should compensate the bookmakers to an amount equivalent not to their current value, but to their value before the bombshell was dropped on them.

I am mindful of what my hon. Friend the Member for Shipley (Philip Davies) says, but the money for the pitches never went to the race courses in the first place; it went up and down families, or they bought from friends or associates. The National Joint Pitch Council is more responsible than the race courses, is it not?

I am going into the details not about responsibility, but about what the RCA plans to do. We must look to the future rather than to the past. However, the RCA is taking the assets. Whatever the responsibility in the past, the RCA will benefit; it is taking a commercial property away from families who have owned it for generations. Therefore, the RCA is entirely responsible. We should all do everything in our power to ensure that the commercial trading of pick-list positions remains where it has always been—not taken in a short-term smash-and-grab raid. It should stay in the hands of the bookmakers themselves.

Order. Two Members wish to catch my eye, and I propose to call the winding-up speeches at half-past 10. Will they bear that in mind?

Thank you, Mr. Atkinson, I shall therefore be brief. I shall reflect on the state of the Tote, but first perhaps I should declare an interest. My wife was a working member of the Tote at its headquarters in Wigan, so I had a peculiar insight into the process.

It is time that the Government brought forward their plans for the Tote, because they opened up the process. My colleagues on the Culture, Media and Sport Committee and I have, over the past two years, consistently asked for an update, but we have consistently received the reply, “It’s all right, it’s just about to happen. Don’t you worry,” mainly from the Minister’s predecessor, the right hon. Member for Sheffield, Central (Mr. Caborn)—almost like a bad joke during an after-dinner speech. The replies have continued, but nothing else has.

I remember that way back there was support for the sale of the Tote because of the Government’s assurance that it would be given to racing. However, while we are in a position of paralysis, it is important to consider the advice in 1996 given by the Home Office, when it was under my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), when it reflected on the problems that any change in the Tote’s status would produce. The first point was that the Tote was not large enough for public flotation, and it would be exposed to competitors that would pull it apart. We know that that is still a real fear. Sale by competitive tender, the advice continued, could not be ruled out, but would raise difficulties because of the need to guarantee that the Tote continued to support racing to the extent it had hitherto, which is exactly the case today.

Finally, the advice stated that the option of vesting in a racing body would require examination of whether the grant of an exclusive licence to operate pool betting on horse racing would be appropriate, and that such a licence would have to ensure that the Tote’s profits were applied in the best interests of racing and with the minimum disruption to the Tote and race courses. However, that raised difficult competition issues. If we had only listened 11 years ago to that advice, we would not be in this position.

Anyone who has ever gone to the European Commission or to many other European Union organisations will have had a working relationship with the directorate-general for competition. In my previous job, I had to have a working relationship with that directorate-general, with the Commission and with UKRep—the United Kingdom Permanent Representation to the European Union—which is of course there to battle for Whitehall’s interest in such cases.


It is clear that the team from the Department for Culture, Media and Sport, which the Government put to task in UKRep, was wholly inadequate. The Treasury team has competition expertise; the DCMS team in UKRep was worse than amateur. That is the situation today. Even my wife, who is much brighter and more qualified than me, pointed that out to a board director and to the former Minister, but she was told, “Don’t worry your pretty little head.” I can remember that, and I am sure that the ex-Minister is now worrying his pretty little head.

We must analyse the utter incompetence that has delivered such uncertainty to the marketplace. What will happen to all those workers in Wigan, to the future contributions of the Tote and to that excellent body itself? As a Conservative, I believe that if it ain’t broke, don’t fix it, but we are in a wholly self-created mess with the Tote, and we should not forget the relevant manifesto commitment.

Where do we go now? Looking back at the options that have been on the table, I believe that Viscount Astor’s proposals in 1999, or slightly later, could certainly give us one way out by mimicking a national lottery-style licensing of the operation. We must consider whether to take up that idea or retain the status quo. However, it is time for the Government to produce answers on the Tote.

I congratulate the hon. Member for East Devon (Mr. Swire) on securing the debate, and all right hon. and hon. Members who have contributed to what has been a stimulating discussion. I also join many of those who paid tribute to Tristram Ricketts. He will be sadly missed by racing. Were he with us today, he would remind us how important racing is to the economy, that almost 20,000 people are employed directly by it and that if we take all the satellite industries, including betting, into account, the figure rises to almost 100,000 people. He would also, no doubt, remind us of the study by Deloitte last year, which demonstrated that its contribution to the economy overall is nearly £3 billion, and of the nearly £300 million that is paid annually in taxation into the Treasury’s coffers. More importantly, he would point out how popular racing is with the people of this country. It is the second most popular sport to football, with some 6 million people attending race courses last year alone. Of course, he would remind us that we are the envy of the world because we undoubtedly have the best racing. Eight of the 12 top races are held in this country and even today the nation stops for some of those races—for example, the grand national.

Racing is critical. However, we are talking about the future and, in that respect, it is important to recognise that we have a new regulatory body. I am delighted by the work that has been done in such a short time by the British Horseracing Authority, which is working on some innovative ideas for the timetabling of racing that will be of enormous benefit to the betting industry: if there are more races, there is more opportunity for it to make profits. That should be borne in mind in some of our future debates.

The BHA has also been building on work that has been done, including work to improve the security and integrity of the sport. We should not forget the huge costs borne by the racing industry in terms of guaranteeing the integrity of racing. Some £24 million a year is spent in that particular endeavour. However, many other activities are engaged in, including—importantly, but so far not referred to—education and training and the welfare of jockeys, as the hon. Member for Hove (Ms Barlow) mentioned.

We have to bear in mind that racing has huge costs, and it is important to take that into account when considering issues such as the levy or the future of the Tote. If we want a bright future for a sport that is already successful, we have to ensure that it has the resources coming into it to enable it to develop and grow and to deal with issues including securing the integrity of the sport and increasing prize money, as well as other things that hon. Members mentioned. That is why I am disappointed that the proposal to roll the levy forward for another 12 months—to give another opportunity for debate about streamlining and modernisation to take place—has not been possible and that the bookmakers have forced it to determination.

We are now in a situation whereby the Secretary of State, for the first time since the 41st scheme back in 2002-03, has to decide how to proceed. I urge him and the Minister to make that determination as quickly as possible. The current scheme runs out on 31 March 2008. Everybody knows that in planning the future of a significant business, time is needed to get the financial planning right. An early determination, enabling us to know what sum is coming in through the levy, is crucial. It is critical that we get a quick determination by the Secretary of State.

Does the hon. Gentleman agree that a reduction in the levy would hit Scotland disproportionately hard? Most of the horses are trained in the south of England, which involves transport costs to Scotland, particularly to the race course in Perth in my constituency which is the most northerly in the UK. If there is a reduction levy, there will be a reduction in prize money, which might be a massive disincentive for horse trainers and owners to come to race courses like the one in Perth.

The hon. Gentleman makes a valuable point that I was not aware of. I am grateful to him for drawing it to my attention. No doubt, had he had more time, he would have said how wonderful the race courses in his constituency are, as other right hon. and hon. Members have done. I put on the record how wonderful Bath race course is, lest that be forgotten.

The hon. Gentleman is right. That is why my second plea to the Minister, in respect of his advising the Secretary of State on the determination, is that something is done to ensure that we have a fair settlement. The Minister will be well aware that a determination under the 41st scheme suggested a figure of somewhere between £90 million and £110 million coming in. If that were rolled forward in respect of inflation alone, it would be brought up to some £130 million, which is what is needed.

I hope that the Minister will not listen to the siren voices talking about the woes befalling the betting industry because of the row between Satellite Information Services and Turf TV. As the hon. Member for East Devon so rightly said, that is a separate commercial argument that must be sorted out on that basis and should not, in any way, influence the Secretary of State’s decision. Like many others, I am enormously worried that the legal battles going on between those two companies could end up costing some £5 million, which will be taken away from racing. That is to be regretted.

In making the determination, I hope that the Minister will look carefully at betting exchanges—a new phenomenon—which are not making a fair contribution to racing because of how they are taxed under the current regime. The most important thing of all is time. A quick determination is critical.

The money issue also raises the problem with the Tote. A quick determination on that is equally important. I hear what the hon. Member for Tewkesbury (Mr. Robertson) says about the need for a bit more time—he suggests three months—but if there is very much more time, there is unlikely to be a Tote worth selling, because a large number of people are now leaving it, it is having difficulty recruiting new people and some of its senior staff are leaving. It is critical that there is a relatively quick outcome. I accept his point about getting the deal right, but it must be done fairly quickly.

The matter needs deciding pretty quickly. My point is that if the Tote is sold on the open market, the jobs that hon. Members have mentioned, including some 500 jobs in Wigan, could all go. All I am saying is that we need a three-month period just for reflection.

If the Tote goes to the open market and one of the major firms buys it, the hon. Gentleman is right: there could be a huge loss of jobs, particularly in the north. I hope that a deal can be found under which it is sold as was originally intended—he and I served on the Committee dealing with the Horserace Betting and Olympic Lottery Bill—and goes to a racing consortium so that it is kept within racing. That is what we were promised and what we understood we were signing up to. As I mentioned in an intervention, if it is at all possible I want the Minister to give a commitment that at least 50 per cent. of money from the sale of the Tote will go into racing.

On the list pitches, I agree with the contributions of the hon. Members for Livingston (Mr. Devine) and for Hove. Everybody to whom I have talked is convinced that that was a separate issue, with the rent on one hand and the asset on the other. There was no understanding that the asset was being given up or that the five times rule was going, with people saying, “Yes, that was understood. It’s time to prepare for it.” There was no understanding that the asset was going. I welcome the Minister’s trying to knock heads together to find a solution. I know that the Culture, Media and Sport Committee is also considering this issue. I hope that he can give us some information as to what progress is being made. It is critical that we get a solution to that dilemma as well.

Racing is critically important to this country. It is loved by millions and it has a bright future. However, a number of vital issues have to be resolved. The Minister has got a big job on his plate, because a lot of the decisions fall to him. I wish him the best of luck, but I hope that he will take racing’s interests into serious consideration in making his determination.

It is a pleasure to follow the hon. Member for Bath (Mr. Foster), who, as always, spoke with expertise on the matter. I congratulate my hon. Friend the Member for East Devon (Mr. Swire) on securing this timely debate, which has been interesting and stimulating. I join him in paying tribute to Sir Tristram Ricketts, who played such an active role over four decades in the very subject that we are talking about.

My hon. Friend summed up with clarity the challenges facing the industry. I am grateful for the deluge of material that many of the organisations and parties whose representatives are sitting at the back of the room have sent my way in the past few days. Of course, it is not I who is in a position to resolve the issues but the Government, who have not gained a reputation for decisive action. I am reminded of Shakespeare’s famous horse quotation from “Richard III”, of which everyone will be aware. At the battle of Bosworth, Richard III wants to continue the battle and is willing to trade his kingdom for a horse. In contrast, today we have a Minister who wants to avoid the battle completely and runs away from anything to do with horses. The consequences of that have allowed the British horse racing industry to enter a protracted period of confusion. I am, of course, being entirely disingenuous to the current Minister, who has worked hard to get on top of his brief and been approachable and friendly, but it is his watch now and he needs to make amends for the errors of his predecessors.

The Tote has been with us in one form or another since 1928, when it was the Horserace Totaliser Board, to give it its full name. It operates as a bookmaker and offers pool betting on horses. It has been the Government’s intention to sell the Tote for some time; we first got a inkling that it might happen way back in May 1999. It was an election pledge in June 2001 and in May 2005, and I am sure that it would have been an election pledge in November 2007 had we had an election. I wonder what the odds are against its appearing again in a manifesto in June 2009 or whenever the election is.

There have been more than seven years of briefing versus counter-briefing, bids agreed then scuppered, prices confirmed then rebuffed, and Government announcements and then retractions. As we have heard, the Opposition fully support the sale of the Tote, but in a timely fashion, as reiterated by my hon. Friend the Member for Lancaster and Wyre (Mr. Wallace). I asked the Minister in a parliamentary question only two months ago whether the Tote would be sold in the next three months. His reply was that the Government were in advanced stages of discussions. Two months on, will he update us? What are those advanced stages, what value is the Tote now set at, who is leading the consortium to buy it and how much of the money will go back into racing? I understand that Lord Davies of Oldham said in the other place in July that the cost of trying to sort out the sale of the Tote had already climbed to £2 million. Will the Minister confirm exactly what the cost to the taxpayer is? I am sure that it is in our interests to find out.

The horse racing levy is the agreed annual amount paid by bookmakers to race courses, and it goes towards such things as prize money, the grass roots of the sport, veterinary skills and so forth. It is valued between £85 million and £90 million. As was stated in Lord Donoughue’s study for the Department for Culture, Media and Sport, which has been referred to several times, all sides agree that the levy should eventually be phased out and replaced with a commercial alternative. Unfortunately, by the deadline of 31 October, racing and the bookmakers had failed to reach an agreement on the 2008-09 levy, meaning that determination now falls to the Secretary of State.

The sticking point, as we have heard, is commercial television rights. Traditionally, horse race footage has been beamed into betting shops by SIS, which is predominantly owned by a number of the large bookmakers, including William Hill and Ladbrokes. Turf TV, a new race course broadcaster, has been established and signed up to by about half the race courses. That means that bookmakers must now have two contracts, with SIS and with Turf TV, if they are to show the full complement of racing on offer in the UK.

The two sides of the argument have been well rehearsed: one either supports the levy and says that it should be reduced to compensate for the funds earned by Turf TV, or says that it should remain and that broadcasting rights are separate from any discussions about the levy itself. Sadly, Lord Donoughue could not find a solution, but it was established that all parties agreed to the long-term aim of abolishing the levy and replacing it with a commercial alternative. I was pleased to hear from the British Horseracing Authority in meetings yesterday that it agreed to a wider modernisation review of the levy.

My hon. Friend the Member for Tewkesbury (Mr. Robertson) reiterated the points about the duplication of costs. Does the Minister agree that, with a long-term commercial solution required, running two broadcasting systems needs to be reviewed if funding to support the racing industry is to be maximised while bookmakers are offered an attractive deal? Alternatively, does he believe that horse racing can receive the critical financial support that it needs with the broadcasting monopoly broken up? I look forward to his response, as I understand that he is already starting talks with an independent organisation to mediate between the groups. What are his views on the short-term requirement to sort out the levy for this year and the long-term challenge of resolving and removing it?

The final act in the Government’s three-ring circus of equine confusion, if I may call it that, is the issue of bookmakers’ course pitches at race meetings. For many years, bookmakers had assumed that their pitches on race courses were theirs to use or sell on. Their value hinged on the so-called list system, reflecting the greater choice of pitches for people higher up the list. Location is critical, as it is linked directly to the amount of revenue that a bookmaker might receive. Charges to bookmakers were limited to five times the entry fee of the course, which changed in 2003 following a position paper from the Department. The change modernised the charges but there was no agreement on changes to list positions, which had been traded for some value for many years. Along came the Gambling Act 2005, which removed the responsibility for track betting licences from the Horserace Betting Levy Board and gave it to local authorities, with no longer any mention of list positions. That was the fundamental flaw in the 2005 Act.

The Racecourse Association was quick to announce that, by 2012, bookmakers’ list positions would no longer be recognised. There seems to be no official documentation showing that pitch ownership was ever to be in perpetuity, but conversely I understand that there is also no official documentation showing that it was not. That is a complete legislative nightmare. How on earth did we get there? It certainly seems that the sport of kings is being managed by a Ministry of court jesters.

What action is the Minister taking, and what time scale is he adopting? What parties and intermediaries are being involved? Does he believe, for example, that race courses should take a small percentage of bookmakers’ profits provided that there is a fairer charge, linked to earnings, so relinquishing the need to interfere with the list? Will he be using section 151(2) of the 2005 Act, which allows the Secretary of State directly to influence the form and contents of premises licences?

We have heard a number of eloquent speeches, and everyone has joined in supporting the industry. We can rightly be proud of horse racing in the UK, and certainly of its role in the economy. It is a multi-billion pound industry with more than 9,000 races a year, including eight of the top, world-class races. However, that position is not guaranteed. We need better co-operation within the industry and stronger leadership from the Government. I hope that the Minister will not duck his responsibility to help to resolve the concerns that we have debated, which affect the horse racing industry.

It is a pleasure to serve under your chairmanship, Mr. Atkinson. We were formerly two Whips together and worked closely in the dark arts of the Whips Office.

I welcome this important debate, secured by the hon. Member for East Devon (Mr. Swire). I add my support to his views on Sir Tristram Ricketts. Today is a sad day, as racing has lost somebody who had such a sharp mind. I met him on only a couple of occasions, but he had a great love for racing and wanted to ensure that it succeeded. He will be sadly missed and I pass on my condolences to his family.

The debate and the spirit in which hon. Members have contributed to it have been important. I was particularly pleased by the contributions by my hon. Friends the Members for Livingston (Mr. Devine) and for Hove (Ms Barlow), and by the hon. Members for Tewkesbury (Mr. Robertson) and for Lancaster and Wyre (Mr. Wallace). We need to consider how we can move forward together. We heard some thoughtful comments about the impact on racing and its future.

Like the hon. Member for Bath (Mr. Foster), we should start by celebrating horse racing and its impact on the economy. Horse racing is healthy and buoyant, and is second only to football in British sport in terms of attendance at fixtures and revenue earned. Total race course attendance in 2006 was just under 6 million, the total having been on a significant upward trend since 2000, when 5.1 million people went racing. The current figures are the highest since the 1960s. The appeal of racing is universal: it appeals to people of all ages, backgrounds and socio-economic groups.

Not only do more people attend racing; many more people watch it on TV. The average TV audience for racing is 1.3 million for BBC 1 and 774,000 for BBC 2. Some 9.5 million people watched the grand national, and the 2007 Derby attracted 3 million viewers. In 2006, 197 meetings were broadcast terrestrially—151 on Channel 4 and 46 on the BBC. Channel 4 has the successful “The Morning Line” programme that attracts an average audience of 658,000 to racing, and has an hour-long programme dedicated to racing. At The Races is available in more than 9 million homes, and Racing UK, which is owned by 31 leading British race courses, has around 50,000 subscribers.

The economic facts speak for themselves. The racing and racehorse breeding industries are together directly responsibly for 18,800 full-time equivalent jobs. As the hon. Gentleman said, a report by Deloitte in 2006 found that racing employs more people than any other sport in Britain. Taking into account the secondary employment in the betting industry that he mentioned—it is impossible to imagine racing thriving without on-course bookmaking—the figure rises to 88,000.

Racing on Britain’s 59 racecourses—with a 60th soon to open in Essex—generates some £300 million in tax revenues for the Government each year, and has an overall economic impact of £2.86 billion. Total prize money reached a record of £104.1 million in 2006, compared with £71.7 million in 2000. There are about 9,500 active racehorse owners, and 50,000 people are involved in racehorse ownership through various types of co-ownership. About 14,500 horses are in training, and 1,415 fixtures have been programmed in the current year, with over 9,000 races.

As for betting, £10 billion is bet off-course on horse racing every year, most of it in the 8,500 licensed betting offices in Britain, with a further £120 million bet on-course through the Tote. Bookmakers’ profits on British racing alone are more than £1 billion a year, and the levy board received some £98 million from off-course bookmakers and the Tote in 2006-07. Those figures show not only that racing is a deeply engrained pastime and part of our national sporting life, but that it makes a strong and growing contribution to the economy of the country, including in some of the more deprived areas that we have heard about.

I know that the welfare of racehorses has been of concern to many people over the years. The Animal Welfare Act 2006 came into force earlier this year, and we believe that it is a significant step forward, as there is now a positive duty on owners and keepers of animals to promote welfare. I was sad to see that two horses were killed at Cheltenham at the weekend, and I send my condolences to all those involved.

We have the 2006 Act in place, and we have a particular position on racing. It is not the case, as the hon. Member for Bournemouth, East (Mr. Ellwood) said, that the Government want to abdicate their responsibilities. I do not think that I have avoided any battles; in fact, I got involved in a few battles very quickly in my role as the Sports Minister.

On the specific issues, the chairman of the Horserace Betting Levy Board has, to our regret, again asked my right hon. Friend the Secretary of State to determine the level of the annual horse race betting levy.

I thank my hon. Friend for giving way and for meeting me during the summer recess, when he expressed a hope, and perhaps even an expectation, that the industry would be able to manage its own affairs. Sadly, that has not proved to be the case. He knows that although the Ayr racecourse has thrived in recent years, the investment would definitely be put at risk if the levy were reduced in any way. Does he agree with the levy board chairman, Mr. Hughes, who said:

“I don’t think you can mix statutory payments with commercial elements, particularly where they may be seen to involve inducements”?

Does he agree that any matters relating to Turf TV are separate from the negotiations on the levy?

I understand and share many of my hon. Friend’s concerns. Let me set out the Government’s position. We do not want to pre-judge what the determination will be, but we hope to announce it early in the new year to meet the requests of hon. Members. The levy has only just gone to determination, and we have not yet appointed consultants to assist the Secretary of State in his deliberations. However, my predecessor and my officials have followed the levy board’s discussions closely and we are fully aware of the importance of having fair and timely outcomes for the racing industry.

I confirm that, in line with the recommendations of the future funding of racing review group, which my noble Friend Lord Donoughue chaired in 2005, we still plan to review the workings of the levy scheme to see whether there is any way in which the machinery can be streamlined and simplified. I hope that the levy board will share the burden of that work with my Department. Obviously, that review can happen only when the 47th levy is determined. As my predecessor, my right hon. Friend the Member for Sheffield, Central (Mr. Caborn), told the House late last year, we have no plans to abolish the levy until a viable commercial alternative emerges.

I share the opinions of many hon. Members in the Chamber today about the importance of the levy to race courses such as mine in Great Yarmouth. The betting industry provides up to £130 million of investment through the levy and other things, and there is sponsorship on top of that. Has there been any indication from the industry that it wants to reduce that amount, or is it prepared to keep the money as it is?

Again, that will be determined during the discussions on the determination. I do not want to get drawn into those arguments today. We will make the determination, we will consider everything that has been put to us, and we will try to work in the best interests of racing.

The determination will take place and we will look at the future of the levy system, as we have outlined. I agree with the hon. Member for Tewkesbury that it is important that racing looks to its future as well. Clearly, there are many sides that contribute to racing, and we have to ensure that they look to the future, too. I want the Government to remove themselves from the detail, although we will carry out our responsibilities.

Time is against us, so I want to concentrate on some of the major issues. On the sale of the Tote, I accept that there have been difficulties, including those in relation to the 500 jobs in Wigan. We must ensure that we do this properly. We have been chided about the role of Europe, but Europe played a big part in preventing the sale from taking place. We want to sell to racing, but we are considering the offer that has been made, and we need to make a quick decision. We must ensure that we go through the due process and look at the detail of all the bids. I can give the assurance that the hon. Member for Bath was looking for regarding what will happen if we do not sell the Tote to racing and it goes on the open market. The agreement was that 50 per cent. would go to the horse racing industry, and I am happy to put that on the record.

If it is not possible to sell the Tote to racing—it is almost certain that any sale will be challenged in the European Court—does not the hon. Member for Lancaster and Wyre (Mr. Wallace) have a point when he says if it ain’t broke, don’t fix it? Will the Government consider leaving it exactly as it is or having a licensing system like the lottery? There was no manifesto commitment to sell the Tote on the open market.

That is an important point. First, let us make the determination. We need to do that quickly for the reasons that have been outlined. Again, I agree with the hon. Member for Tewkesbury: we ought to look at the options that are available to us if that is not successful. I am happy to give the commitment that we will do that.

The Select Committee is looking into pitch tenure. I want to resolve the matter. We have set up a working group with an independent chair. We want to ensure that all sides of the argument, including the race courses and bookmakers, benefit from such a group. It is important to do that rather than going to law. People in racing tend to go to law very quickly, whether it be Turf TV or because of pitch tenure, which incurs huge cost. However, that money could go into racing, and we want to ensure that it is spent wisely for the future of racing.

Hon. Members raised a number of points that I cannot respond to in the time left. However, I will put in writing to those who have attended the debate the details on the questions that were asked. I urge that there are more debates on horse racing, that we look with interest at the work of the all-party group on horse racing and that we try to meet the challenges together. I accept that politics sometimes comes into play, but I hope that that will not prevent us from working together for racing’s benefit.