Alan Meale
Main Page: Alan Meale (Labour - Mansfield)
Mr Robertson
The hon. Gentleman makes a very good point. I have already mentioned the money going to racing, and the issue of jobs is important not just to the Tote. Many people are employed in racing, and, if it loses the Tote’s contribution, those jobs will be adversely affected, so he is absolutely right.
The Chancellor, in his Budget speech, mentioned the intention of moving the Tote on and changing its status, and more recently the Minister here tonight said that, when that happens, 50% of the proceeds of the sale will be returned to racing. That statement is generally welcome, and from a racing perspective it has to be good news, but it is not enough. There are various questions about that 50% figure. How much would it be worth after pension and debt liabilities have been taken into account? Who in racing would get the money? How much would it amount to? Would that 50% satisfy European Union state aid rules? Those questions need to be answered.
My central point—the most important point, which the hon. Gentleman touched on—is that the money that the Tote puts into racing each and every year is more important than 50% of the proceeds of any sale going to racing. As I have frequently said, that could turn out to be like selling one’s house and living off the proceeds: it is okay to do so for a while, perhaps five years, but at the end of that period the proceeds are all gone and then one is left without an asset. More important than that 50% is therefore the Tote’s year-on-year contribution to racing, and I cannot stress that enough.
Mr Alan Meale (Mansfield) (Lab)
May I remind the hon. Gentleman of the contents of early-day motion 1516, which members of the all-party racing and bloodstock industries group tabled? It talks about who represents racing per se, and the answer is organisations such as the Jockey Club and the British Horseracing Board, the owners, trainers, jockeys, stable staff and their representative organisations. They all support the Tote’s foundation, as he has been describing. The Minister knows that the Government have never given a penny to the Tote, never even acted as guarantor to it, but have gleaned millions from it, so should he not at least listen to the people who have actually made a business out of it?
Mr Robertson
The hon. Gentleman, the joint chairman of the all-party group, makes an important point, which I was going to come on to but shall dwell on now for a moment. The people who run horse racing are well known for falling out over every issue that there is to fall out over. It is almost a standing joke in the racing industry that they cannot agree on anything, but the hon. Gentleman is absolutely right, because on this issue racing speaks with one voice, and it is crucial that the Government listen to it.
I do not remember racing being as united on any issue as it is on this one. The central point that it is making is that whoever ends up running the Tote in a few months’ time should not only be able to pay this contribution to racing every year but guarantee to do so. In other words, the purpose of the existence of the Tote must be to contribute to horse racing, because that is what it was set up to do. If other bidders are considered—of course, the Government have to follow due process and consider other bidders—would the industry be able to ask for guarantees from those bidders that the Tote would continue to look after horse racing? That would provide some difficulty for those bidders because it would reduce the value of the Tote as a business—I understand that—but how on earth would they be able to give that guarantee? I do not think that they could.
When the Chancellor and the Minister further considered the status of the Tote, they said that they would look after racing’s interests and also look after the interests of the taxpayer. I return to what the hon. Member for Mansfield said. The taxpayer has never put a single penny into the Tote, and so, in my view, the taxpayer does not deserve a return from any sale of the Tote. This is very different from the millions upon millions that the taxpayer used to have to put into the old nationalised state industries. I want to see more fairness for taxpayers, and lower taxes. I am always on the side of the taxpayer; I come to this House to represent them. However, on this occasion they do not need any representing.
Mr Meale
While I commend the hon. Gentleman’s words about what contribution is made, I refer back to what my hon. Friend the Member for Wigan (Lisa Nandy) said about the taxpayers of Wigan and the north-west and the contribution that they have made. The fact is that there would be no business whatever were it not for the people who work for the Tote in Wigan, in Lancashire, and up and down the length and breadth of Britain’s high streets where Tote bookmakers operate. These women, in the main, work for the Tote, travel to race courses throughout the UK, and glean the many hundreds of millions of pounds that turn the profit that we are talking about.
Mr Robertson
The hon. Gentleman is absolutely right. It is the efforts of the staff, who have contributed so much towards the Tote as an organisation, that have allowed it to contribute so much money to horse racing.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)
I congratulate my hon. Friend the Member for Tewkesbury (Mr Robertson) on securing this important debate. A number of Members have made the point that this is a timely discussion and I am delighted to have the opportunity to respond to the excellent points and questions that my hon. Friend raised. I thank him for describing me as genial. I do not think I have been described as genial before. I shall tuck that away and tell my mum when this is all over. I also compliment him because, as he said, by a quirk of the boundaries his constituency includes the wonderful race course of Cheltenham. It is my hard lot in life to have to go to the Cheltenham festival for two days this year. That is a terribly tough part of my job, but I am rather looking forward to it.
I should point out that we are in the middle of an open market process in which a number of people are bidding for the Tote. I hope that my hon. Friend and the hon. Members who have intervened will understand that I am therefore limited in what I can say at this point. Some people who are bidding to take over the Tote have signed non-disclosure agreements with the Government and the Government have signed them in return. It would not be fair to individual bidders if I started disclosing details of one bid and not another. That would clearly not lead to a fair, safe and equitable disposal process, so I will have to watch my p’s and q’s. I am not trying to be deliberately obstructive or obscure, but I need to be careful
My hon. Friend began by asking a series of questions about the details of the 50% commitment. As he rightly pointed out, the Government have committed to ensuring that we honour the Labour Government’s original commitment that 50% of the proceeds of any disposal go to racing. I will come on to his points about whether that is a high enough proportion.
John Penrose
I thank the hon. Gentleman for that intervention because it leads me on to answering some of the points that he and his co-chairman of the all-party group on the racing and bloodstock industries, my hon. Friend the Member for Tewkesbury, asked. He is right: clearly, these will have to be net proceeds.
There is a series of questions to be answered about precisely how the transfer of the 50% of the proceeds will take place, and to whom it will be transferred. The answer to most of these questions is tightly bound by European law, because we have to ensure that we do not inadvertently trip over concerns about state aid, which have already derailed one or two earlier attempts to deal with the Tote under previous Administrations. There are things that we can and cannot do, and we are examining them and ensuring that everybody understands what they are. However, I would make the point that they apply equally to any of the potential bidders who are interested in taking over the Tote in due course, who will be bound by charity law and so on. It is most likely that the money will end up in some kind of trust that is governed by the requirements of European law, to ensure that it does not fall on the wrong side of the state aid rules. More details are being developed and worked out through the lawyers as we speak, and when the time comes we will obviously need to publish rather more detail.
John Penrose
I am happy to come on to the issue of Tote staff, but I actually meant to describe a slightly different type of trust, in that the money that is paid to racing will need to go into a carefully bounded trust that is constrained by EU state aid rules. That may or may not be helpful to the future of the staff, but it is a parallel and separate issue.
The principal point made by my hon. Friend the Member for Tewkesbury to which I wish to respond was that the value of the 50% share would almost certainly be less than the value of the ongoing income stream that there has been from the Tote to racing year on year. I completely understand the basic point that he was trying to make, which was that if someone is given a large lump of capital in year one and they fritter it away, or even spend it on terribly valuable and useful things, they will be left with nothing else unless they have a yearly income as well.
However, it is not necessarily true that the ongoing annual income is worth more than the value of the up-front capital. It rather depends on how much that ongoing annual income will be under the various potential future owners of the Tote. Without revealing details of all the different bidders—as I said earlier, I cannot do that—I can tell everybody that the various people who are bidding for the Tote are coming up with an interesting and rich variety of proposals for how to treat the level, structure and so on of that ongoing income stream. They are not all the same, and some are better for racing on an ongoing basis than others. However, we need to value the best and worst differentials alongside the value of the capital. It is not true that the value of the differential will always be bigger and more valuable than the up-front capital. In some cases, it could be that 50% of the proceeds properly invested could yield a very significant return. It is not a straightforward calculation, so I caution the hon. Member for Mansfield (Mr Meale) on how he makes that comparison.