Gambling (Licensing and Advertising) Bill

Debate between Lord Gardiner of Kimble and Lord Cavendish of Furness

Tuesday 14th January 2014 Grand Committee

[Lord Gardiner of Kimble (Con)]

My Lords, I thank the noble Viscount for his amendment and the Government fully acknowledge the strength of feeling on this issue. I will therefore explain why we feel that we are unable to accept the current amendment, clarify the state aid position and explain what we are doing to address the issue of levy reform.

The problem with the amendment is that it is too narrow in scope to offer the flexibility we would need to reform the existing system. Much has been said about the current levy regime no longer reflecting modern betting and racing. We want to consider reform across the whole system and the amendment will not enable or facilitate this wider approach. If we accepted this clause and notified the European Commission of our intentions, it could come back, as it did in the case of the French levy, requiring us to make changes to the levy system which could be made only through primary legislation. For that reason, among others, the clause is too narrow in scope to cater for such an eventuality.

A number of your Lordships—the noble Lord, Lord Lipsey, and my noble friend Lord Cavendish in particular—referred to the state aid position. I hope it will help your Lordships to address some of the issues raised in the European Commission decision about the French levy. The Commission ruled that France’s levy on online horserace betting operators was a state aid compatible with the state aid rules. That confirms the Government’s position that the UK levy also is a state aid. Any substantive alteration to an existing state aid requires approval by the European Commission. The French decision does not mean that the UK would not have to seek separate approval for a substantive change to the existing system. Indeed, the French had to make changes to the proposal they originally notified to the Commission in order to gain its approval. As I have said before, the amendment does not provide any room for manoeuvre should the Commission seek changes to the levy system to maintain state aid compliance.

I move on to levy reform. I am particularly mindful of what the noble Lord, Lord Collins of Highbury, said about many of the other activities of the levy board. Training is one that I know something about. The recent figures published by the Horserace Betting Levy Board indicate that levy yields, including voluntary contributions from bookmakers, will rise in the next two years from £74.4 million in 2012-13 to an estimated £75.6 million in 2013-14 and an estimated £80.2 million in 2014-15. That is clearly good news—I think that the noble Lord, Lord Lipsey, described it as encouraging—but it does not mean that the Government are kicking levy reform into the long grass. The Government have said that they would like to see the levy replaced by a more commercial arrangement between racing and betting, but a workable replacement that is fair, sustainable, enforceable and legally sound has yet to emerge. We all wish to see a vibrant racing industry. I am very much aware of just how important that industry is in many parts of the country.

Some points were made by my noble friends Lord Clement-Jones and Lord Cavendish about why the Government do not take a broader power to reform the levy. The Government are rightly cautious before adopting broad reserve powers, but are thinking carefully about how such a power could appropriately be used to achieve levy reform.

I understand your Lordships’ desire to make progress. The Government want to make progress too and are giving levy reform current and active consideration. As an immediate next step, the department is initiating discussions about the state aid implications of reform with the European Commission this month. For the reasons I have outlined and in the circumstances, I very much hope that the noble Viscount will feel able to withdraw his amendment.

[Lord Cavendish of Furness]

Am I to understand that there is a possibility that a reserve power provision could be added at a later stage of the Bill?

[Lord Gardiner of Kimble]

I do not think I can confirm that. The Government are in thinking mode on that. For reasons I have described, a lot of work is going on more generally on the levy. I am really saying to your Lordships that the Government are cautious about adopting broad reserve powers. Many of your Lordships would be concerned about the Government reserving those powers, and we are cautious about doing so for those reasons—but we are thinking about it. I am sorry that I cannot be more exacting than that.