Draft Horserace Betting Levy Regulations 2017

Debate between Maria Caulfield and Tracey Crouch

Monday 27th March 2017 General Committees

[Tracey Crouch]

I thank Committee members for their engagement and their contributions to the debate. Although the principle of an extension to the levy is, on the face of it, simple, it has been demonstrated by the important points that have been made during this debate that it is more complex than it might seem. I will address each of those points in turn.

I thank the hon. Member for Tooting and the Opposition for their support for the regulations. The hon. Lady is right in her assessment of why this is a necessary step forward. As she said, the industry and the sector have evolved, so we can all now gamble in very different ways than we could 50-odd years ago.

The hon. Lady’s comments about greyhound racing are very topical. I recently wrote to Bet365, the only major online operator contributing to the voluntary fund, to thank it for taking a lead in this key area, and I have also written to trade bodies representing all the betting operators to ask that they take part in discussions to improve the current funding position. Lord Lipsey has volunteered to chair that act of mediation. Although there are no plans to introduce a statutory levy for greyhound racing, we will try to encourage more money into the sector.

[Maria Caulfield (Lewes) (Con)]

May I support the Minister’s argument? Greyhound racing grounds are closing in record numbers, which is exactly why we need these regulations. Plumpton racecourse in my constituency welcomes them, because it needs that extra funding to make it sustainable.

[Tracey Crouch]

I thank my hon. Friend for that comment. We are incredibly proud of the whole racing industry. I have met greyhound industry representatives on a number of occasions to tell them that we continue to support them. We will try to encourage more money into the sector on a voluntary basis. We want to ensure, through the levy for horse-racing, that it has a fair amount of money going into it from the offshore sector.

The hon. Member for Tooting also asked about the living wage. Although that is not a matter for the levy, we expect racing to work with racecourses to ensure best practice. As she is aware, the Government have increased the national minimum wage, and all those working in racing will benefit from it.

The hon. Lady and other Committee members mentioned the timeframe for a review. We believe that the seven-year review set out in the regulations strikes a balance between certainty and a reasonable timeframe. The rate can be reviewed at any time if there are changes in the industry that suggest that the rate no longer remains appropriate. Otherwise, it is required to be reviewed automatically within seven years. I hope that that answers the hon. Lady’s questions.

I thank my hon. Friend the Member for Torbay for his contribution, although given that I contributed significantly to the profits of a bookmaker during Cheltenham he had probably better not rely on tips from me for the forthcoming Grand National.

The hon. Member for Paisley and Renfrewshire North asked specific questions about Scotland, and I should say at the outset that I am grateful for the Scottish National party’s support on this issue. Officials have kept the Scottish Government informed about levy reform throughout the entire process. Courses in Scotland do, and will continue to, receive levy funding, and the extension to offshore means that more money will be available for courses across Great Britain. Last year the levy board distributed almost £4 million to the five racecourses in Scotland; I hope that addresses his question.

My right hon. Friend the Member for Newbury is a long-standing advocate for reform, and I am enormously grateful for his sage advice on the sometimes complex issues in this area. He spoke eloquently about the need for these changes and then asked a specific question about governance. This is where I explain that it is quite a complex issue, because there are actually two stages, and today is merely the first phase.

In the short term, the levy board will remain responsible as the governing body, but we will consult on transferring responsibility to a nominated racing authority who will act on behalf of the racing industry. At the moment, the levy board is required to provide an annual report making clear how the money is spent; that is important to make sure that money gets to all parts of the racing industry, as others have raised, and we expect a similar to process to occur under the new racing authority.

I will quickly refer to the transitional phase and some of the administrative changes. The Government will consult on using a legislative reform order to effect the transfer of responsibility to the gambling commission and the racing authority. We will consult affected stakeholders on the detail of those proposals shortly, and we intend to complete transfer of responsibilities in early 2018. It is absolutely crucial that we minimise any disruption when moving to the new arrangements, which is why the administrative changes are intended to be completed in early 2018.

My hon. Friend, as I will call him, the Member for Jarrow has not returned from voting, but I want to put on the record my thanks for his kind words—although I was worried that he was about to reveal all my secrets as a researcher. Distribution is a matter not for Government, but for the board at the moment, and the racing authority in the future. All areas of Great Britain benefit from the levy, and that will not change. As it has done, the levy will continue to benefit the grassroots of the sport, and we expect the new racing authority to have clear criteria for allocating funding and to report that transparently. He also asked about state aid. As the statutory instrument makes clear, the legislation will only come into force once state aid clearance is received.

There is a specific provision within the statutory instrument that says it will come into force on 1 April 2017 or the day after it is made—so, the state aid clearance is expected. My officials have engaged extensively with the European Commission, and as a result I am confident that we will receive that clearance shortly. To be perfectly honest, we would not have introduced these regulations to the House if we did not have that confidence.

My hon. Friend the Member for Tewkesbury spoke very kindly about the reforms. I welcome his support for this; his experience and expertise on all things racing mean that it is even more appreciated. I am grateful.

I turn to my hon. Friend the Member for Shipley. I am pleased that Parliament’s procedures allow him, even as a non-voting member of this Committee, to express his views. I feel that some of his speech was 54 years too late. The levy exists, and it is my duty to make sure that it reflects the world we live in today.

My hon. Friend asked some very specific questions about the need for primary legislation. There is no need for primary legislation; the power in section 2 of the Gambling (Licensing and Advertising) Act 2014 allows the Government to extend the levy in a state-aid-compatible way using secondary legislation. The point of securing the power in 2014 was to allow us the flexibility to use secondary legislation, and the power is broad enough to address all the issues necessary to secure state aid approval.

We do not agree that these regulations are ultra vires. As was made clear in 2013, the levy is a state aid and, as I have said, extension to off-shore operators is a material change to the existing scheme, which requires notification and approval. On-course bookmakers and the Tote have always been liable to pay the levy since 1963, but my hon. Friend is right—state approval is required, and we have sought it and are confident we will get it shortly. The Department’s legal advice has not changed, because we have always been clear that the levy is a state aid.

Finally, my right hon. and learned Friend the Member for Harborough spoke with passion about the breadth and depth of the industry. Racing is an important sector, and it is essential that we do all we can to support it, from the small racecourses to the large ones. These reforms are long overdue, and I hope the Committee will agree that they will make a profound difference to the British racing industry and to the thousands of hard-working stable staff, jockeys, trainers and all those who make racing what it is today.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Horserace Betting Levy Regulations 2017.