Gambling (Licensing and Advertising) Bill

David Nuttall Excerpts

Wednesday 26th March 2014 Commons Chamber

[Mrs Grant]

My hon. Friend makes a very important point. We have to look after racing. It is an important industry that provides many jobs. This is a sensible move, making a level playing field for all operators.

At the same time, we will develop wider levy reform options and publish a consultation in the summer. The consultation will seek views on a range of options, which are likely to include commercial arrangements, modernising the existing levy and a horse race betting right. The amendment is about collecting the horserace betting levy in a fair and consistent way.

[Mr David Nuttall (Bury North) (Con)]

Will the Minister confirm that it would not be possible to extend the levy to offshore bookmakers without the approval of the EU and that we are totally dependent on receiving that approval in order to be able to do it legally?

[Mrs Grant]

My hon. Friend makes a fair point. Certainly, the levy scheme amounts to state aid and, because of the terms, we need to let the EU know if there is any substantial change in state aid and get permission for it.

The amendment is reasonable and I believe it commands widespread support. It signals the Government’s commitment to modernising the levy and it is, of course, part of, but not a substitute for, a wider reform programme.

[Clive Efford (Eltham) (Lab)]

We welcome the Government amendment and their change of heart on the alteration that we proposed both in Committee and on Report.

We pay tribute to the Members of the House of Lords who took up several of the issues that we raised during the Bill’s passage through this House. They have been very successful in gaining Government support for our amendments, notably in relation to sport spread betting, pre-watershed gambling advertising and its impact on children, a one-stop shop for problem gamblers and financial blocking. On all those areas, the Government said that change was not necessary or desirable, but it is very welcome that they have now changed their mind.

We welcome the Lords amendment on the horserace betting levy. There are two key issues: the application of the existing levy to online gamblers, and a consultation on the levy’s replacement in the long term. It is worth putting in context why the levy is necessary to support the horse racing industry.

British horse racing is a major sport. It is the country’s second most popular sport, with 5.68 million attendees, according to the British Horseracing Authority. It is also the second largest sporting employer. British racing supports a predominantly rural industry that makes a significant contribution to the British economy. It generates £3.45 billion in annual expenditure, provides direct and associated employment for 85,000 people and assists in leveraging billions of pounds of inward investment.

Horse racing is inextricably linked with gambling like no other sport, with the exception of greyhound racing. As online gambling has grown, betting operators have moved offshore, which has contributed to a fall in revenue from the levy from an average of about £106 million between 2003-04 and 2008-09 to £66.7 million now. The industry says that that has led the number of horses in training to go down by 14.2% between 2008 and 2013, and foal production to go down by 25.3% during the same period. The Lords amendment is therefore very important. We welcome the Government’s about-turn and their support for our position on the levy.

The Minister has accepted our position, but a review may take a very long time. What does she think is the time scale for the review? When will the end date be for a major review of the betting levy?

In Committee, I warned the Minister that she might face more tenacious support for the horse racing industry than comes from most Members of the House of Commons. After I had told her that she might face more fanatical opposition in the House of Lords, she said:

“I am not sure that I understand quite what the hon. Member means by the horse racing fanatics in the other place, but I look forward to finding out.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 19 November 2013; c. 141.]

She well and truly found out when the Bill arrived in the Lords.

When I moved the amendment on Report, the Minister said:

“First, I do not believe that we should assume that genuine levy reform lies in merely extending the existing levy scheme… Secondly, as I have said previously, any extension of the levy to offshore bookmakers as a result of the new clauses”—

the ones I had tabled—

“would require EU Commission approval because the levy is a state aid scheme. I will not implement the proposals, for which we do not have EU approval in respect of state aid.”—[Official Report, 26 November 2013; Vol. 571, c. 195.]

When the Bill reached the Lords—following some to-ing and fro-ing between the Opposition, Cross Benchers and the Government—Lord Gardiner of Kimble moved an amendment, and said:

“We agree with the view that while we still have a statutory levy, it should be fairly applied. Furthermore, we are persuaded that including a clause about extending the levy to offshore remote operators is fully in keeping with the context and purpose of the Bill.”—[Official Report, House of Lords, 4 March 2014; Vol. 752, c. 1301.]

Will the Minister explain to the House—I will allow her to intervene—exactly what changed between our discussions in the House of Commons and those in the House of Lords? There has been a complete about-turn in the Government’s position on this issue.

It is important that there are no delays. The Minister said that she hoped that the consultation would start in May. Will she clarify whether it will conclude before the annual review of the levy terms, which will take place in October?

I know that there is concern about the horserace betting levy. My noble Friend Lord Lipsey spoke of his opposition to it in the other place. I share some of his concerns. If we go ahead with extending the levy and it generates an additional £20 million for the horse racing industry, what exactly will the Minister do to ensure that it benefits the wider horse racing industry and not just the haves at the expense of the have-nots? That investment should benefit the low-paid workers in the industry, generate economic activity in rural areas, and perhaps even support struggling race courses to become viable and keep people in their jobs.

The amendment will provide a great deal of support to the industry and could mean £20 million of investment. The industry must use it wisely. If it is used not to provide those wider benefits, but to inflate prizes at the expense of lower-paid workers in the industry, the support for the levy in the House might dissipate and the industry might lose important income. We all have a duty to pay close attention to what the money is used for when it finally reaches the industry.

I pay tribute to the Members of the House of Lords who supported the amendments that we tabled, not least the amendment before us. I pay particular tribute to Lord Stevenson of Balmacara, Baroness Jones of Whitchurch and Lord Collins of Highbury. I would not go so far as to suggest that someone should name a racehorse or even a stakes race after each of them. However, I received an e-mail of gratitude from the British Horseracing Authority, expressing its appreciation for my support, which said:

“I hope that we can get you along to a race meeting in the near future, potentially for the inaugural running of the ‘Clive Efford Cup’”.

I am sure that that was said in jest, but I will not stand in anyone’s way if that is what they want to do.

This is a welcome about-turn from the Government. We certainly support the amendment. I hope that the Minister will give an assurance about the time scales, because we do not want there to be any delay that could be avoided in implementing the levy on online gambling because, in the meantime, the industry will be missing out on significant income that could be put to good use, as I have set out today. I hope that the House will support the amendment.

[Mr Nuttall]

I want to raise two matters. Both have been touched on, but I want to expand on them.

First, as the hon. Member for Eltham (Clive Efford) rightly said, a new clause very similar to the Lords amendment was tabled on Report. I, along with other Government Members, voted against it. Of course, it was not the same clause, but it was very similar to the amendment we are being asked to support today, and if I am anything, I like to be constant and consistent in my position.

[Clive Efford]

May I point out to the hon. Gentleman that the outcome is the same? We will apply the existing levy—assuming we get European Commission approval—to online gamblers, and the Government will consult on a future levy for the longer term. The outcome is the same whether the amendment has been mildly adjusted or not.

[Mr Nuttall]

I appreciate that the aim might be the same, but as I understand it, the Lords amendment creates a reserved power straight away—

[Clive Efford]

indicated dissent.

--- Later in debate ---

[Mr Nuttall]

I thought it was to do it straight away, which is slightly different.

[Clive Efford]

In Committee we tabled two amendments, one of which would have done what the hon. Gentleman has set out. We also offered the Government the opportunity to consider taking the reserved power in the longer term. That was the amendment we brought to the House on Report, and he voted against the reserved power, which is again set out in this amendment.

[Mr Nuttall]

This is a very time-limited debate and I do not want to spend all my time on a preliminary point. The substantive point is that, whether or not the amendment is identical or slightly different to the previous one, this new clause certainly does provide for a reserved power. That is somewhat confusing given what the Chancellor said in his Budget statement last Wednesday:

“We will also extend the horserace betting levy to bookmakers who are based offshore, and we will look at wider levy reform and at introducing a ‘racing right’ to support the sport.”—[Official Report, 19 March 2014; Vol. 577, c. 791.]

That makes it apparent, or gives the impression, that it is going to happen, and that the reserved power will not be kept for a rainy day but is something that the Government definitely want to proceed with. We must assume that that is the case; otherwise, why introduce it in the first place?

That leads neatly to my second point. I will not quote word for word what the hon. Member for Eltham said on Report, because he mentioned some of it in his speech. On 26 November last year, when new clauses 10 and 11 were being considered, the Minister stated:

“Nor am I convinced that we should seek EU approval for an extension of the current levy when we do not know that it will satisfy the need for proper reform. I am not prepared to act in a way that could jeopardise the stability provided by the recent voluntary arrangement.

I have also been urged to take a power to extend the levy at a future point, but that assumes that all that we might wish to do is extend the existing system, and that would not be genuine levy reform. Even if we took such a power, we could find that it was too narrowly scoped to enable us to achieve what we wanted—for example, to meet the EC—”

I presume that means the European Union—

“requirements for any reform scheme to be state aid compliant.”—[Official Report, 26 November 2013; Vol. 571, c. 195.]

There are therefore two matters of confusion. First, what is the Government’s position on the proposal? Is it simply to have a reserved power, or is it to seek to introduce a measure at the earliest opportunity? Secondly, for what will the Government seek approval from the EU? Will they simply seek approval to extend the levy, or will they seek a wider reform, which was the reason given on 26 November for the delay?

Essentially, those are the two points that I would be grateful to the Minister for addressing when she replies to this brief debate.

--- Later in debate ---

[Mrs Grant]

With the leave of the House, Mr Deputy Speaker. I thank all Members for what they have said today about this important issue, and for their contributions during the Bill’s earlier stages. I shall be fairly brief, but I want to deal with some of the points that they have raised.

The shadow Minister, the hon. Member for Eltham (Clive Efford), accused us of performing a U-turn. I certainly do not accept that accusation, and I am a little surprised that he made it. I have said time and again—and the hon. Gentleman has heard me say it—that the extension on its own does not equate to genuine levy reform. The amendment is part of a wider levy reform programme, which is essential and which will involve our looking at all the various options.

The shadow Minister rightly asked for further details about time scales and delay. Delay is the last thing that I want: we need to move ahead. I can tell the hon. Gentleman that we will seek to complete all the necessary extension work in time for the 2015 negotiations on the 55th levy scheme, and that we will begin consultation on wider levy reform this summer. We hope to complete that consultation by the autumn. We want to get on with this, but it must be done properly, and there are a number of practical considerations that prevent us from doing it any earlier. As the hon. Gentleman will know, any significant change beyond extension would require primary legislation.

[Mr Nuttall]

Will the Minister give way?

[Mrs Grant]

I want to make a few more points, but I will give way before I end my speech.