Laurence Robertson
Main Page: Laurence Robertson (Conservative - Tewkesbury)The Tote
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Mr Laurence Robertson (Tewkesbury) (Con)
I, too, am surprised that so many Members do not want to hear this timely and important debate. I am pleased to have secured it and grateful to the Minister for staying behind to reply to it. I am also grateful for his genial and informed approach to all the horse racing issues that the Government have to deal with.
I wish to declare two non-declarable interests. I have the honour of being joint chair of the all-party group on racing and bloodstock industries, which is one of the most active, well-attended and important all-party groups in Parliament. I have the honour of being joint chair alongside the hon. Member for Mansfield (Mr Meale), whom I am pleased to see in the Chamber this evening. I also have the honour of representing the great race course at Cheltenham, which by a quirk of the boundaries falls within my constituency of Tewkesbury. It is looking forward to one of the greatest national hunt racing festivals in the world in a couple of weeks’ time.
The debate is timely because the Government have announced their intention to finalise the status of the Tote. It was set up in 1928 to benefit horse racing, and benefit horse racing it has done. Last year, it provided almost £19 million to horse racing through the statutory levy and sponsorship. The Tote sponsors the Cheltenham gold cup, one of the greatest steeplechase races in the world, which will take place in a couple of weeks’ time. It also pays a lot of money in rent to around 60 race courses across Great Britain, and that money is absolutely crucial to racing. The Tote is more than that, however; it is an institution, and it provides the friendly face of bookmaking.
It is 10 years since the right hon. Member for Blackburn (Mr Straw), then Home Secretary, announced that the Government of the day would change the status of the Tote. At the time, it looked as though it would be transferred to a racing trust. Indeed, a shadow trust was set up with its own chairman, Lord Lipsey, but the transfer was never made. One of the big questions that we must ask before getting too far into the detail is this: who actually owns the Tote? That is not an easy question to answer. It was for that reason that in 2004 the then Government passed an Act of Parliament that nationalised the Tote, with a view to moving it on to the racing trust, but they never included that intention in the Bill, which was a problem. My submission is that, if the Government had to nationalise the Tote and obviously did not own it, they in some way had a responsibility to racing, so it would be wrong for them to do anything with the Tote that would deprive racing of its annual income from the Tote.
Lisa Nandy (Wigan) (Lab)
The hon. Gentleman will know that I have the privilege of representing Wigan, where the Tote has its headquarters, and the staff there have lived with uncertainty about their futures for a long time. Does he share my concerns about how their jobs and, in particular, their pensions will be protected, and would he welcome some clarity from the Minister on that?
Mr Robertson
I certainly do share the hon. Lady’s concerns. I shall come to that issue in a moment, but she makes a very important point.
Mr Dave Watts (St Helens North) (Lab)
Does the hon. Gentleman agree that, if the Government are going to assess any bids for the Tote, they should use only two criteria: first, the retention of jobs in the north-west; and secondly, the contribution to racing? Does he not think that those are the two overriding decisions that should determine who gets the Tote?
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.
Yvonne Fovargue (Makerfield) (Lab)
Does the hon. Gentleman agree that much of the value of the Tote lies in the loyal and mainly long-serving work force, who need to be protected? Their needs must be given proper weighting in the bidding process as a reward for their loyal and long service, which has helped the Tote to develop into what it is today.
Mr Robertson
I entirely agree with the hon. Lady. I will touch on that in a moment.
As I said, the taxpayer has never put any money into the Tote and therefore does not deserve any money out of the Tote. Having said that, I fully understand the difficulty that the Minister and his Department may face, because over the years we have seen the Treasury grow in strength, and it wants some money out of this process. However, a bid from a Tote foundation may qualify to be one of the best bids that it could take up, for some of the reasons that have been given. A Tote foundation would of course continue to employ staff, and therefore continue to have a pension liability. It would continue to be responsible for any debts that the Tote may have. All that has to be put into the melting pot. An undiscounted cash payment could be made. If the Tote is to continue as a foundation, or as the Tote organisation, and continue, year on year, to pay money to horse racing, there is no need for the 50% sum to be given back to horse racing because it would be getting something far more valuable—the ongoing amount each and every year. That is extremely important.
Matthew Hancock (West Suffolk) (Con)
I congratulate my hon. Friend on securing this extremely important debate at this crucial time. As he well knows, in my constituency about 5,000 jobs in and around Newmarket are connected with the racing industry. Does he agree, especially given the history of this issue, that the crucial element is the contribution that is made to racing? I strongly agree with his view that an ongoing contribution to racing is vital in terms of the future of the Tote, and that whatever choice of bidders is made, an obligation for a contractual support of the future of racing is required.
Mr Robertson
My hon. Friend is absolutely right that that is the crucial element. If there is one message that I would like the Minister to receive tonight, it is that we have to be certain of the ongoing contribution. We cannot be certain of it if the highest bidder is simply accepted. Under certain circumstances, we would not even be sure that the Tote would continue to exist as an organisation, because bits of it could be sold off. It is only through this process that I have come to understand what is meant by embarrassment clauses. That is how the Government might ensure that once the Tote is sold or transferred to another organisation or company, it will not asset strip it, sell it the next day and make a massive profit, or cause it not to survive as an organisation.
Ian Swales (Redcar) (LD)
Does my hon. Friend agree that almost every country in the world that has a successful racing industry also has a state-owned pool betting system, and that in many cases that is the only form of legal betting?
Mr Robertson
My hon. Friend makes a good point. I do not want the Government to continue to own the Tote—not that they own it yet, but hon. Members know what I mean. I do not think that it is for Governments to own betting shops; that is not what they are there for. My hon. Friend is right that the model I am proposing, whereby racing gets all the benefit from the Tote, is not unusual, but exists in many parts of the world. Perhaps the system here differs because the Tote, if it continued as a foundation, would be competing with many other companies such as Ladbrokes, Coral and William Hill. However, his central point is absolutely right.
I am coming to the end of my speech, or certainly to the end of the time that I wanted to take, but I want to make one further point. In a debate two or three weeks ago initiated by my hon. Friend the Member for West Suffolk (Matthew Hancock), we discussed the future of the horserace betting levy. It was pretty well agreed that the present system is out of date and that it cannot carry on in its present form. It needs to be reformed or to be replaced completely. Racing will have to generate more commercial opportunities to get more money into horse racing, even if the levy continues as it is. If the Tote were transferred or sold to an organisation or foundation that was there purely to finance horse racing, it would be a move in that direction. Allowing the Tote foundation bid to succeed, for example, would be a step towards a solution with regard to the levy, and the two policies would go forward together.
I started by saying that the ownership of the Tote is uncertain, but one thing that is certain is that racing has a right to the money that comes from the Tote. I ask the Minister to ensure that that continues to be the case.