Tote

Viscount Falkland Excerpts

Wednesday 8th December 2010 Lords Chamber

[Viscount Falkland]

My Lords, we are grateful to the noble Lord, Lord James, for introducing the subject. He embarked on his discourse by questioning the ownership of the Tote. I absolutely agree. What business do the Government have to claim that they own the Tote? I had the temerity to bring up the subject at a meeting of the All-Party Racing and Bloodstock Group during the period of the last Administration, on an evening when the Minister for Sport was in a tired and emotional mood. He turned to me rather sharply and said, “You may not have realised—it may have passed you by—that we won the election with a majority of 179”, or whatever it was, “and the reason why we’re going to take the Tote into our possession is political will”. There was no point in further conversation, but I am not absolutely clear where we are now. The noble Lord brought up ownership: I thought that it was, by fair means or foul, in the hands of the Government.

I apologise to the House if the rest of my remarks are in rather simple terms. I am designing them for those who, more and more, zap the television. The last couple of times I have been in your Lordships’ House, I have had people come up to me saying, “I fell upon the parliamentary channel. Your speech was very nice, but I did not understand a word of what you were talking about”. With the greatest respect to the two noble Lords who spoke before me, I wonder whether somebody listening to the debate who does not go racing would know what we were talking about.

It is a very simple matter. Racing, which is an important part of this country’s sporting and cultural life, is in a parlous state. Very few people know that. The all-seeing and all-knowing noble Lord, Lord Mandelson, answered a Question in this House about whether it was appropriate to offer Her Majesty the Queen a race to commemorate her Jubilee, an idea which I thought was charming and which I hope comes to fruition. I asked the noble Lord, in my supplementary, whether a happy event such as this might take one’s mind off the parlous financial state of racing. His reply to that was, “I am surprised that the noble Lord feels that racing is in a parlous state. I had no idea, but I have to admit that I have not given it very close attention”. That was not very encouraging. I wonder whether the coalition has any further ideas as to how this could be progressed; I fancy that the answer is rather less at this stage, but I always live in hope.

It is important to explain to those who tune in to the parliamentary channel that the Tote is a brand name. I say with the greatest respect to my friend, the noble Lord, Lord Lipsey, that when he talks about the Tote, he is talking about two things. He is talking about the betting shops that were acquired over a period of years, thanks to a former head of the Tote who found that he could borrow money to create some bottom-line profit to the totalisator organisation—these shops compete with the other betting shops owned by the major chains—and he is talking about the pool.

It is the pool that interests me, because, when the sale comes about, if it does come about, the shops will have quite a considerable value, though not as considerable as the value was three or four years ago. Some people were talking about £400 million. I doubt whether it would be anything near that today, for all kinds of reasons, notably because people are not betting on horses in betting shops in the way that they were; they are betting on other sports. The turnover and profit of bookmakers have suffered to the extent that the levy, which is the machinery designed to get a contribution from the bookmakers for allowing them to take bets on horses, has sunk to a level at which it is impossible to maintain the funding of racing. Other solutions have been sought and the sale of the Tote is part of those solutions. We have been discussing this for years, as the noble Lord, Lord Lipsey, says. Part and parcel of the whole business of dealing with racing at the moment, I am afraid, is that it has been impossible to find any consistency or common direction of thought among racing’s constituent parts. I shall be interested to see what the next move is.

The pool itself came about in the 1920s to run alongside bookmakers, who were allowed to continue with their profession, but in betting terms it has always been the poor partner in the business of accepting bets from people who are foolish enough—I have been one—to bet on horses on a regular basis. If the pool has a future, we cannot have a Tote monopoly. We cannot even talk about one any longer. Most other countries decided, though, that a Tote monopoly was the way to go; it was the only way in which you could fund racing. Curiously, and I do not know whether the Minister can respond on this, within the past few years, I am not quite clear by what means—I do not know whether the bookmakers had an influence on the Office of Fair Trading, because they are very good at what they do—the OFT came out with what seems to be an utterly ridiculous decision. It said that the totalisator pool operations—I think that that is what they meant, not the betting shops—were non-competitive because of the monopoly. No one said that about the lottery, so far as I am concerned.

For a pool to work properly, you have to have a lot of people paying into it—in this case, a lot of people who bet on horses at race meetings going to the Tote in large numbers. It is no good carving it up, giving it to racecourses and saying, “You run your own Tote”. I wonder who made the decision at the Office of Fair Trading and what the motive behind it was. We still have this hanging over us, and I hope that the Minister will tell us if there is any way in which we can get that decision revoked. You cannot sell the Tote for anything if it has a lifespan of—it was seven years originally—only three years to go.

In the long term, though, the pool is the interesting part of race betting because we have new technologies and wider markets. People around the world are interested in British racing and may well want to bet into totalisator pools here. If enough energy and funding were put into setting the ball rolling, that might be the answer to a lot of our problems. People may think that I am again advocating a Tote monopoly. Maybe subconsciously I am, but I know that it is not a possibility. You cannot tell the bookmakers to go; they would have to be recompensed and that is not something that a Government would tolerate. Still, I would like an answer on that from the Government if possible.

It is amazing how the racing world is split into various compartmentalised interests. We now have a campaign, on which a great deal of money has been spent, called Racing for Change. That is complete nonsense. It is trying to get a whole new public to get interested in racing, when those of us who are already interested in it know that racing is like coin collecting or bridge—you become passionately fond of it and obsessed by it. You get interested in every part of racing. I do not see how Racing for Change, in getting lots of young men to go out and drink in the afternoons at Kempton Park, is going to alter that position substantially. I think that the horseracing authority is mad to pay £6 million, or however much it is.

My conclusion is that the Government must understand this subject, as I hope that anyone who is listening to me on the parliamentary channel will have done, and that they really must try to get a grip of this thing and decide which is the best way to go. I will lay my position on the table: the Tote should remain where it is, in a relationship with the Government. Sell the betting shops and get what you can for the Government—I suppose that the Treasury will take the greater part of that—but put the rest of the money into developing the Tote pool, because there you have some hope. Then I will not have go to the meetings with the All-Party Racing and Bloodstock Group, where everyone looks at each other, repeats themselves endlessly for years on end and we get nowhere.