Gambling (Licensing and Advertising) Bill

Viscount Astor Excerpts

Tuesday 18th March 2014 Lords Chamber

[Lord Gardiner of Kimble (Con)]

My Lords, I thank your Lordships for the helpful and constructive discussions that have taken place on the horserace betting levy. As I said on Report, these discussions have been very valuable and have helped to take us to where we stand today.

This amendment provides the Secretary of State with reserve powers to make regulations to secure extension of the liability to pay the horserace betting levy under Section 27 of the Betting, Gaming and Lotteries Act 1963 to all bookmakers who are required to hold a remote operating licence from the Gambling Commission under the Gambling Act 2005. That will include bookmakers who are based outside Great Britain and who will be required to obtain a remote gambling licence as a result of the Bill.

This amendment is fully in keeping with the context and purpose of this remote gambling Bill, which is about levelling the playing field for bookmakers engaging with British punters. Subsections (1) and (2) of the proposed new clause are broadly drafted to ensure that the Secretary of State has power to make all the changes that may be necessary to secure extension of the levy to offshore bookmakers. This clause ensures, for example, that the Secretary of State has the power to make changes to the levy scheme that may be necessary to secure extension compatible with the UK’s obligations under EU law.

Subsection (3) is essentially the same as the amendment tabled by my noble friend Lord Astor on Report. Secondary legislation brought forward under this amendment will be subject to the affirmative procedure in both Houses of Parliament. Subsection (4) expressly makes clear that existing provisions to abolish the levy once a suitable replacement has been found are unaffected by this amendment. The Government believe that any statutory levy should be fairly applied, but that does not mean that we are abandoning the search for a replacement that more appropriately reflects the modern betting and racing industries. The Government now intend to move forward quickly on two concurrent projects.

First, on extending the levy, we will seek to complete the necessary work in time for negotiations on the 55th levy scheme in 2015 to take place on the basis of extension. I must add that this timing will, of course, be subject to the outcomes of discussions with the European Commission that will begin this Friday. The timing will also be subject to the outcome of a consultation on the mechanics of implementing levy extension which will begin shortly. At the same time, we will develop wider levy reform options and consult on those later this year. This amendment is about collecting the horserace betting levy in a fair and consistent way. It is a reasonable amendment which I believe commands widespread support. I beg to move.

[Viscount Astor (Con)]

My Lords, I thank my noble friend for bringing forth this amendment instead of the amendment that I moved on Report; this amendment in lieu is better drafted than mine. I am very grateful for the support that both he and the Minister for Sport in another place, Helen Grant, have given on this issue. The amendment has been widely welcomed by the racing industry and by the majority of the betting industry. Of course, the hard work of looking forward to a replacement of the levy now begins, which will require a great deal of movement from all those parties involved in racing to come to a conclusion that will work and is a commercial agreement. In the mean time, I thank my noble friend for bringing forward this amendment.

[Lord Lipsey (Lab)]

My Lords, I am aware that the House is keen to get on to the important debate that we will hold on the Ukraine this afternoon, so I will not detain it longer than I have to.

I start from a position that may not be widely shared in this House—I do not know—which is that I am against the levy, and I have been for years. When I started off being against it I was in a minority of one, but now a large number of people have come round to the view that it is not desirable. The two Members of the House of Commons who have most knowledge of these matters—Mr Philip Davies and Mr Laurence Robertson, who chairs the Racing and Bloodstock Industries All-Party Group—are both anti-levy. On their good days the Government are anti-levy, since they have explained that they want a replacement of the levy. I hope that it will be a commercial replacement that comes along.

I am against the levy for two reasons. First, for my sins I am by training an economist and, like all economists, I believe that subsidies, ceteris paribus, are a bad thing. They distort markets and interfere with the generally beneficial results in industry of free competition. The statutory levy on horseracing betting is an exemplar of this; it means that racing spends much of its time lobbying for more levy instead of putting its house in order and modernising the sport. It leads to bigger prizes, which in turn lead to inflated prices for the best bloodstock and then demands for even bigger prizes, so that that investment in inflated-priced bloodstock pays a dividend. Supernormal profits are made by some participants in the sport, including successful trainers, but I observe that little of that money trickles down to stablehands.