---

The Tote

Very much so. We all reflect on Robin's interest in—indeed, love of—racing. If we wanted to call the new Tote trust anything, we could call it the Cook trust. That would go down extremely well. To underline the point made by my hon. Friend, the take of the Tote is split 40:40:20. Forty per cent. is on-course, 40 per cent. is off-course and 20 per cent. is international. The international part has probably grown by 4 or 5 per cent. in the past two or three years. The 40 per cent. off-course is important as well. That 40 per cent. comes through the betting shops. They have an interest in ensuring that that part of the business grows, because they receive a 14 per cent. return, with little risk attached, so it is a good deal for them. It is important that we ensure that the various components—the betting industry, the sport of horse racing itself and the Tote—are brought together on the executive board of the new Tote trust. That proposal gives us an opportunity to consider the issue further. One thing that has bedevilled the industry is the question of the levy. There are those who have been trying to get shot of the levy—most people say that it would be right to get shot of the levy. The levy was brought into being to protect on-course bookmakers when off-course betting started, which was some years ago. Unfortunately, these things evolve over time and are used for totally different purposes from those for which they were originally set up. That may be right or wrong. I do not know. I am not giving a view on that, but I believe that it is necessary to take the Government out of this area of sport. If the opportunity arises to do that, we should take it. Racing has evolved in the recent past and the sport now has a fairly good regulatory arm, through the British Horseracing Authority, which has brought in the Jockey Club and so on. The BHA is the regulatory part. We now want to build a financial vehicle to be able to continue to fund the sport in the medium to long term. What are the two incomes for the sport? One is the levy and the other is the profits from the Tote. It is a not-for-profit organisation; the profits go back into racing. Why not put the levy board into the new Tote trust so that the new Tote trust is the body that becomes the financial vehicle for the sport? It will have two income streams: one is the Tote, which it will be running, and the other is the levy, which could be taken over. At the end of the day, it is a levy on bookmakers to pay money into the sport. The new Tote trust could be charged with determining, collecting and disbursing the levy on a non-statutory basis. The question that has been asked for God knows how many years is what happens when people cannot reach a determination. I suggest that we could set up an arbitration mechanism within the arrangement that I have described. It would be fairly simple to bring in something like the Copyright Tribunal, which would involve the great and the good who had no vested interest in racing. If the sport and the industry could not come to an agreement, a mechanism could be brought into play to achieve it. That would get rid of bureaucracy. Two bodies would be brought into one. The whole structure of racing would be simplified by having on the one hand a regulatory body—the BHA—and on the other the financial arm, developing the Tote and collecting the levy. With the new Tote trust, we would have on the stage all the main actors with a vested interest in ensuring that the system works. If the trust could not collectively do that, it would refer the issue to a mechanism like the Copyright Tribunal. Conservative Members are good at getting shot of red tape. They want to ensure that they streamline everything, and I am absolutely with them on that, so they should seriously consider what I am saying, which is that such arbitration is possible. We would simply have regulation on the one hand and financial streams on the other. If we really want to make progress and make horse racing a fit-for-purpose sport, with fit-for-purpose governance and a fit-for-purpose stream of financial input to the sport, it would make a lot of sense to follow the route that I have described. How does that proposal relate to the original proposition? I believe that it gives the Treasury the money it wants— 50 per cent., which is what the Treasury has been saying it wants in terms of the sale of the Tote. The shops are the asset, and the Treasury can have its take from that. Then there is the 50 per cent. going to racing. Racing would have not only the moneys from that, but an ongoing revenue stream from the profits of the Tote. The proposal secures the existing jobs and, indeed, lays the foundation for more jobs in Wigan than the 600 that are there already. It brings in the bookies, who would have an enlightened self-interest in ensuring that the activity levels of the Tote increased, because 40 per cent. is already going through their outlets, on which they get a 14 per cent. yield that is pretty much risk-free. The Government gain by the Tote being taken to the marketplace, as it would be in seven years. It ends the statutory levy, which the Government, including the Minister and his colleagues at the Treasury, want. Importantly, it delivers the manifesto commitment as well. What is the timetable for implementation? It could take place very quickly. There is no reason why we cannot decouple the shops from the Tote pool and give the responsibility for selling them to Mr. Mike Smith. He could take them to the marketplace as and when he believed it was the right time to do so. That leaves the pool and racing to come together in a small working group, which should report back before the end of the year. Both the operation of the Tote and the levy should be determined before the 48th levy, which will be in 2009. The proposal could become operational on 1 January 2009.