HL Deb 14 September 2004 vol 664 cc1029-55

3.20 p.m.

Read a third time.

Lord Moynihan moved Amendment No. 1:

After Clause 5, insert the following new clause—


Any sale of the successor company to a body other than the Racing Trust shall not take place unless the sale has been approved by a resolution of each House of Parliament."

The noble Lord said: My Lords, there are many friends of racing in this House who are only too well aware of the valuable contribution that the Tote makes to horseracing at every racecourse throughout the country. It is vital that that support—some £10 million each year—is safeguarded.

However, notwithstanding the Tote's long and noble tradition of supporting racing, we on these Benches agree that the time has come to modernise its structures, thus enabling it to compete more effectively in the market place. I pay tribute to the work of my noble friend Lord Astor who introduced a Private Member's Bill which sought to achieve that very goal in 2000.

It is for those reasons that we fully support the Government's stated intention that the Tote should be sold to the Racing Trust. Such a sale secures our twin aims of safeguarding the Tote's multi-million pound annual contribution to racing while also allowing it to compete commercially.

Yet there is a cloud on the horizon. Noble Lords may have read about rumours that the Treasury feels that it could perhaps raise more money if the Tote was sold to venture capital firms and is therefore having second thoughts about a sale to the Racing Trust. For example, I refer noble Lords to the article in the business section of the Observer on 1 August this year, which states: Betting industry sources say senior Labour politicians now believe it would be beneficial for the racing industry to receive a huge, one-off cash windfall rather than keep the pooled betting business for the length of a new seven-year licence".

While I would not normally pay much attention to such rumours, nor indeed do I believe all that I read in the papers, the indicative amendment introduced and then withdrawn by the Government on Report supported that view in the event that a sale to the Racing Trust was withdrawn and abandoned.

Throughout these proceedings, the Government have steadfastly refused to put their intention to sell the Tote to the Racing Trust on the face of the Bill, despite an explicit manifesto commitment. Indeed, the Minister has been very careful with his words and has failed to give any guarantees about the purchaser of the Tote.

Let us be very clear: the Bill before us today gives Ministers carte blanche over the Tote. All it actually does is nationalise the Tote at zero cost to the Exchequer. The Government would then be free to sell the Tote to whomever they wanted, whenever they wanted and at whatever price they wanted. There is nothing in the Bill to stop the Treasury nationalising the Tote and subsequently selling it to the highest bidder, thereby jeopardising the Tote's contribution to racing.

Our amendment is designed to act as a check on the Government and to help them ensure that they honour their 2001 manifesto commitment to, sell the Tote to a racing trust to allow it to compete commercially, with all long-term profits invested in the sport". Our amendment is not designed to be complicated or contentious.

We on these Benches have supported Part 1 of the Bill solely on the basis of a sale to the Racing Trust. If that is not possible—and given that there may be good reasons why such a sale is not possible—we believe that it is incumbent on the Government to return to Parliament to seek its approval to sell the Tote to another bidder.

Noble Lords may be aware that the sale of the Tote to racing is the subject of ongoing discussions between the European Commission and the Department for Culture, Media and Sport. I am grateful for the Minister's letter dated 20 August confirming that the Commission had a number of queries about the Government's proposals. Although the Minister was unable to provide any details on the nature of those discussions in his letter, it would be helpful to learn today if an agreement has been reached, at least in principle, with the Commission.

I am confident that many noble Lords would share my frustration if the sale of the Tote to the Racing Trust were undermined by an adverse state-aid ruling from Brussels. When we last discussed the sale of the Tote at Report stage, the Minister was told—I hope in no uncertain terms—that unless all the preparatory work had been done to reach an agreement in principle with the Racing Trust, Her Majesty's Opposition could not support Part 1 of the Bill as it stood. Unfortunately, that has yet to happen.

The Minister kindly sent a letter on 12 August to say that while government accounting rules permit planning and preparatory work to be undertaken prior to Royal Assent, the department took the view that it could, not carry out any detailed negotiations on price or of sale terms, nor start preparation of the Sale and Purchase Agreement". The letter goes on to say, in the finest Civil Service jargon: I sincerely hope that we will be able to reach a position by 14 September where all parties can be confident that the balance of probability is firmly tilted towards the likelihood of concluding a successful sale of the Tote to Racing".

As noble Lords may appreciate, we on these Benches need something more concrete than, the balance of probability [being] tilted towards the likelihood of a sale to the Racing Trust. It is not even clear that the Government have managed to achieve that at the moment. My understanding of the situation is that it remains fluid and far from certain as to whether the Tote will be offered to the Racing Trust at a price that it can afford.

Certainty and clarity on this Labour Party manifesto commitment are required on the face of Part 1 of this legislation today. Certainty and clarity are required in the form of a clear indication that the Government intend to sell to the Racing Trust. We on these Benches believe that there is still far too much uncertainty over the Government's policy to sell the Tote to the Racing Trust. As such, we are unable to support the Bill without the required safeguard contained within my amendment.

I should reiterate that this is not a controversial amendment. The wording and intent have evolved throughout the passage of the Bill to include the concerns of noble Lords and the Minister—indeed, noble Lords from all sides of the House. The principle of the amendment supports the Government's stated policy to sell the Tote to the Racing Trust. Further to that, it secures a vital safeguard to the Bill in the event that a sale to the Racing Trust is not possible. There are precedents for such a safeguard and it would do nothing but strengthen the Bill before us today. I beg to move.

Viscount Falkland

My Lords, we on these Benches understand that the transfer of the Tote from whatever it was—through the nationalisation process to the private sector—is a complex and unusual matter. It is very necessary. The reasons for it being in the Labour Party manifesto are well understood. It is long overdue that the Tote should be out of the purlieus of government in the way that it has been. The Government and those who have run the Tote have served the interests of all those involved—the punters and racing—very well.

I absolutely understand the thinking behind the amendment tabled by the noble Lord, Lord Moynihan. In Committee, I again agreed with much of what he said. Time has now moved on. The programme has not exactly kept to that which was foreseen. We are at a disadvantage in your Lordships' House today because we have had the Summer Recess. Negotiations have taken place in terms of finding the proper consideration that would be paid by the Racing Trust if this deal is the deal that finally moves the Tote into the private sector. We understand—all noble Lords will understand—that the Treasury has a public service remit. It deals with public funds and will need to take careful note of the value of what is being sold or transferred and not give any favours to anyone in so doing other than to the nation that it serves. I put that in more clumsy words than the Minister did when we discussed the issue.

3.30 p.m.

There is a difference between the noble Lord, Lord Moynihan, and the Minister, who explained carefully and clearly to us the difficulties that he was in by giving the undertaking required of him: should the deal fall through it would return to the starting blocks—if I may use that sporting analogy. We would not want to rehearse the reasons he gave now.

A deal of trust in the Minister is required by all interested parties. I am sure that he and those connected with the matter are sincere that the benefit should go to racing. That is what we all have been aiming at. I am sure that the best efforts have been made during the past weeks to make sure that the negotiations have gone in that direction. I hope that the Minister will be able to tell us, while we are deciding how we are to react to the amendment in the name of the noble Lord, Lord Moynihan, that things have moved forward apace and that the intention is to do what the Minister said that the Government intended to do. We are somewhat behind at this stage because the matter is complicated.

Perhaps the Minister can tell us how far apart the Treasury and the special advisers to the Racing Trust are. I imagine that there is a gap in terms of the appropriate consideration. There are all kinds of matters about which we know very little. All we know is that there has been a general expression of good will towards the trust. The noble Lord, Lord Lipsey, has been at great pains to explain to us both in your Lordships' House and privately how things are going. I know that he has had a difficult time, but I think that he is probably more optimistic now than he was some weeks ago. Perhaps he will rise to his feet to tell us something of that in a moment.

This is an extraordinary affair. We are dealing ultimately with public funds which are not to be sneezed at. People to whom I have talked both inside and outside racing tell me that the value on the open market would be in the nature—including the betting shops and the Tote pool operation—of not much less than £350 million. The noble Lord, Lord Moynihan, says that there is a rumour that there are those who would prefer that we got shot of all this and sold it to the highest bidder and let racing take its slice now, whatever that may be.

I have discussed the matter with the noble Lord, Lord Lipsey, and others, and he will probably be able to argue in the House today that that road would ultimately be unsatisfactory for racing and that the road of going to the Racing Trust, if the consideration can be agreed on, will be much more beneficial to racing in the short, medium and long term.

I assume that the Minister will tell us that he and his department are using their best endeavours to get the agreement between the special advisers and the Treasury settled in the near future so that it can go ahead. However, a number of minor issues need to be addressed. Although I have worked in business circles and in the City, I am not aware of what is appropriate in all the aspects of such a deal.

I hope that I am not treading on any toes, but for example, when we went to the annual general meeting of the Tote, the admirable chairman of the Tote, Mr Peter Jones, expressed the hope—it is on public record—that 5 per cent of the agreed price would be shared among the staff of the Tote. I found that an interesting concept, and perhaps that is normal among transfers of this magnitude. When I think about it, however, I do not know whether it is appropriate for a transfer of this kind. One has to say that in the climate in which City operations are now viewed by both the public and the press, a little clarification on the matter is needed.

I do not know whether the Minister will be able to say anything on that matter. I cannot think that the chairman of the Tote produced that figure in public without it having some authority. Noble Lords might be interested to know what exactly that means if we are going to sell something for £350 million with 5 per cent going to the staff. Does it embrace the directors of the company and all the staff down to the doorkeeper, the chauffeur and so on? Does the Minister recognise that? Is that figure normal in such transfers? If so, is it appropriate in this case?

It is one of the points that we need to know about. Your Lordships' House might be a good place for the air to be cleared on the matter. It might be an extremely good idea. The Tote is an admirable organisation that has served us well. The staff obviously deserve recognition, whether they be directors or just lowly members of that operation. It would be interesting to hear from the Minister what would be appropriate in this case.

Without saying anything about voting to the noble Lord, Lord Moynihan, if he intends to go through the Lobbies, we would prefer at this stage to trust the Minister—if he says what I hope he is going to say and we are reassured by the noble Lord, Lord Lipsey, that we do not have to follow the noble Lord into the Lobbies.

I hope that the rumour about the idea that it may be better to sell the Tote to the highest bidder—without going through the complications of the Racing Trust—can be scuppered in your Lordships' House this afternoon so that we can all retain our seats and not go into the Lobbies. I imagine that the noble Lord will not be pressing his amendment. I look forward to the speeches that follow.

Lord Lipsey

My Lords, I am most grateful to the noble Viscount, Lord Falkland, for his kind and supportive remarks and his supportive behaviour throughout this legislation. During August we went in very great detail through the relevant benefits to racing of an open market sale and a sale to racing. I do not want to go into the figures for obvious reasons, but I can confirm that on any conceivable scenario it is far better for racing to buy the Tote than it is for an open market sale to take place and half the proceeds to be given to racing. I give the House that assurance. I went into the matter with an open mind, but I now have a closed mind on the basis of the detailed paperwork that we have done.

I must remind the House that I am chairman of the shadow Racing Trust, the precursor body of the Racing Trust to which the Government plan to sell the Tote. I have taken advice from the House authorities which confirms that that interest does not disqualify me from taking full part in the proceedings on the Bill. Therefore I will give the House my best advice on the position as it stands. I am afraid that that will take rather longer than I would like because of the complexity.

As will be clear from my speech, I hope that there are not any votes this afternoon. Should a vote take place, your Lordships will understand that in view of my rather sensitive position I shall not go into the Lobbies on either side.

Through the proceedings of the Bill there has been a standoff about the proposed new clause standing in the names of the noble Lords, Lord Moynihan and Lord Luke, and myself. We supporters have said that it is desirable that, were the Government to decide to abandon their manifesto pledge to sell the Tote to a racing trust and instead decide to flog it off to the highest bidder—I do not think there is much probability of that—they should first put that policy to both Houses of Parliament for approval. Ministers have put forward a number of arguments why they do not want to do so, most notably because they think that if they were to they would be negotiating with the trust with a pistol held to their heads. That was the position in July—stand-off.

When last the House debated the matter we decided to proceed as follows. Discussions would take place over the summer. As the noble Lord, Lord McIntosh, explained, there could not be negotiations because government expenditure conventions prevent full-scale negotiations taking place until after a Bill has received Royal Assent, but there would be discussions about the valuation bases and so on which are the necessary prelude to negotiations. The Government agreed that they would talk only to the Racing Trust. The hope was that by the time we got to Third Reading today it would be so obvious that we were within spitting distance of a deal that the amendment was redundant.

Those discussions have been taking place between the Government's appointed valuers, PWC, and the Racing Trust's, Rothschilds. They have been up and down. This time last week I would have had to say to the House that they were more down than up. It had seemed to our advisers that PWC had been taking a very aggressive attitude towards the valuation of the Tote. I can give many examples, but one will suffice.

According to the PWC valuation model, the Tote will be making more money out of its pool betting after seven years—which is when its exclusive licence will elapse—than it is now. If we believed that assumption, we would say, "Get rid of the exclusive licence now". We would not have gone through the long process of fighting to keep the exclusive licence for seven years. That is but one example of a very large number where it seemed to us that PWC were being aggressive about valuation.

However, over the past week discussions have taken a turn for the better. There still is a gap—a not insubstantial gap—between PWC and Rothschilds, but it seems to be narrower than had been feared. It begins to look—all possible fingers crossed—that if the process continues it might be that a price will emerge which is acceptable and affordable to racing. I, anyway, am optimistic.

Where does that leave the amendment? I still believe that the arguments that have caused racing to push amendments along this line all summer are correct. I do not give much credence to Ministers' counter arguments. They argue that they have a pistol to their heads. Is that right? If the Racing Trust offered a ludicrously small amount or could not finance a deal and it fell apart, Ministers would come back to both Houses of Parliament and say, "We cannot do a deal with the Racing Trust". They have a majority of 160-odd down the Corridor—not much bother—and normally this House does not seek to overrule the Commons. They would have to put their case to both Houses and, to be honest, I think they would carry it; they generally do. If their reasons were bad they would not deserve to carry it. So I do not find their arguments very convincing.

Unfortunately, although I have argued the case at length with Ministers, they do not seem to agree with me. They seem determined to resist the amendment, and they will.

So it is right that the House balances the argument for the amendment with the cost of pursuing it today. First, if the amendment is carried, the Bill will have to go back to the Commons, and I am quite sure that the Commons will send it back to us. It will not go there until after the conference season opens, and this will in turn delay Royal Assent. We are on a very tight timetable if we are to achieve the target date of completing the Bill by the end of the year. Further delays at this stage would be very undesirable.

And to what effect? Let us suppose the Commons overturn an amendment of this House and the Bill comes back here. We would then face a difficult choice. We can either do what we usually do—huff and puff a bit and then agree with the Commons—in which case we have not achieved much for the extra delay; or we can stand firm and risk the loss of the whole Bill.

I am aware that there is a question mark hanging over the whole legislative programme at the moment—namely, the Hunting Bill and the possible loss of Bills as a result of the Government's decision to go ahead with that Bill. I shall not give my views on that decision on this occasion. The thought of losing the Bill in the brouhaha over hunting is appalling.

Even without the safeguard proposed in the amendment—to which, after all, I have put my name, so I think it makes some sense—there are very strong safeguards that stop Ministers making up their mind to go off and flog the Tote to the highest bidder. Their word is one. It could hardly have been put more strongly by the Minister in another place, Mr Caborn, and my noble friend the Minister here.

To do that they would have to welsh on a clear and unambiguous manifesto pledge. It has happened, but I do not think that it would happen readily again. They would have to eat their repeated words. They would attract the ferocious wrath of the Transport and General Workers Union, which represents the workers at the Tote—and in view of the discussions at Brighton this week I am not entirely sure that they would want that. And there would be some people—even in new Labour—who do not think that the first priority of the Government is handing the Tote over cheap to City fat cats.

Racing's friends in both Houses of Parliament would be aghast. The same people that the Government are slapping in the face with the Hunting Bill would feel slapped again by such treachery to another country sport—racing. We would then go into the general election as the party that had strengthened the hold over the country's punters of the big three bookmakers—Hill, Ladbrokes and Coral—who would end up owning it. I am only an amateur politician, but if I was a professional politician down the end of the Corridor I would not fancy doing that at all.

So, even without the amendment to the Bill—as I say, I hope Ministers will accept it—it is profoundly unattractive for the Government to go down any alternative route.

3.45 p.m.

It is, of course, a matter for the noble Lord, Lord Moynihan, whether he decides, in the light of these conflicting considerations, to press his amendment. However, if I were in his shoes—and knowing what a robust, steadfast supporter of a sale to racing he has been throughout, and I pay tribute and thank him for that—I would want first to listen closely to the Minister's reply today. I hope he will say that he will accept the amendment, but failing that, let us hear what he has to say.

Will the Minister repeat in no uncertain terms that the Government's clear policy and intention is to sell to a racing trust and none other? Will he confirm that valuation discussions are continuing, will continue for some time and can be expected to narrow the gap between the PWC valuation and Rothschilds? Will he confirm that the striking of a valuation is not the end of the story but the first chapter only; that there will then have to be discussions between Ministers and the trust, which I have the honour of chairing, that take into account inter alia the Government's explicit political commitment and racing's capacity to finance a deal, as well as factors such as Brussels state aid considerations?

The onus is with the Minister. He has a task on his hands to persuade the House that the Government still are determined to fulfil their manifesto commitment and that, having willed that end, they are willing to embrace the means to the end through a flexibility in negotiations. If he can do so, then, perhaps with a slightly sad sigh, we should be prepared to wave a fond farewell to the new clause, which has helped to concentrate Ministers' minds during the summer process quite considerably. If not, then the House must vote accordingly.

Lord Molyneaux of Killead

My Lords, I shall be very brief. I wish to express my concern over some of the limitations in the scope of the amendment, particularly in regard to public funds. The House will not be surprised if I refer to the situation as it will affect Northern Ireland.

Northern Ireland is excluded from the British Horseracing Board's Owners Premium Scheme because of an utterly outdated agreement made when there was no horse-breeding industry in Northern Ireland to speak of. For the purposes of this scheme, the BHB recognises that Northern Ireland is an "international jurisdiction" as opposed to a part of the United Kingdom.

When the previous legislation was introduced, Northern Ireland was excluded from it. With new legislation imminent, including the abolition of the Levy Board and the transfer of its role to the British Horseracing Board, it is now imperative that, as Northern Ireland and its citizens are under the jurisdiction of Great Britain and Northern Ireland—not a new phrase—the racing industry and the people who work with it in Northern Ireland are allowed to enjoy the same benefits as the rest of the United Kingdom.

Baroness Noakes

My Lords, I declare two interests, first, as a member of the shadow Racing Trust, chaired by the noble Lord, Lord Lipsey; and, secondly, as a horse owner with a strong interest in horse racing, which is intended to benefit if the sale of the Tote to the Racing Trust takes place. I therefore have a strong interest in seeing the Bill passed and it resulting in the sale of the Tote to the Racing Trust.

We should not forget the background to the Bill, which is that the ownership of the Tote is entirely ambiguous. Having started and built up the Tote, and never having had a penny piece of government financing, racing believes strongly that it owns the Tote and should be given it. Nevertheless, out of pragmatism, racing has accepted that it is right to enter negotiations with the Government for the transfer formulae of ownership to the Racing Trust. That requires a Bill to create the Government's ownership and the Racing Trust, thereby allowing the Government to sell it. Therein, of course, lies the problem. Having created unambiguous government ownership, the Bill leaves us in mid-air, because the Government can sell to whomever they wish.

Clearly, racing has been grateful for the manifesto commitment, but the time is fast approaching when we shall need to see that commitment become reality and that is where the problems start. While I completely accept that the Government still intend, and would like, to transfer the Tote to the Racing Trust, it is by no means clear that that will happen. Good intentions can be ambushed by all kinds of things. Difficulties could well emerge in the sale process, which has not gone very far for various reasons. For example, Europe could cause unanticipated problems. We do not know that at the moment.

The Treasury could cause problems on price. We should not discount that. It is all very well for non-Treasury Ministers to say that it is not a problem, but the Treasury will believe that it has the final say on the price. Both sides have already appointed sets of advisors. I have been involved in many commercial situations where advisors drive deals away from completion, because of the way in which they behave and the kind of issues that they expose. And, of course, the deal could fall apart because of the folly, pigheadedness or whatever of any one of the parties to it. So it is by no means clear that, the Bill having been passed unamended, the sale to the Racing Trust would take place.

However, it is possible to think about the balance of probability. We can hear optimistic statements such as that of the noble Lord, Lord Lipsey, but there is no certainty in that. From the perspective of racing, how much certainty is it reasonable for it to have about the inevitability of the transfer of the Tote to the Racing Trust? That is the issue before us.

Is timing important? Clearly, sooner rather than later, would be racing's view. However, if there was a choice between losing the impossibility of the Tote being transferred outside racing in any circumstances and a little delay, I think that I could cope with a little delay. It would not be ideal, but that would be better overall for racing than losing the Tote because of inadequate protection having been built into the Bill.

I was sorry to hear the noble Lord, Lord Lipsey, say that because of his special circumstances, which I do not quite understand, he would not be able to support the amendment to which he has put his name. I was disappointed to hear him, as chair of the shadow trust, say that. Those who have put so much time and effort into the transfer of the Tote to the Racing Trust would want to see much greater certainty and that has been argued for throughout. Like all other noble Lords, I shall listen carefully to what the Minister says, but I have to say on behalf of racing, for which I believe I speak, that we will need clear assurances before we are satisfied that the Bill, unamended, is a satisfactory foundation for the transfer of the Tote to the Racing Trust.

Lord Donoughue

My Lords, I do not have an institutional interest to declare, but I declare a strong interest in racing. I broadly sympathise with the points that were made by the noble Viscount, Lord Falkland. He raised an interesting point about the proposal to share 5 per cent of the sale price of the Tote among its staff. I do not know what the position on that is, but if it represents £10 million, £20 million or £30 million of public money, we need clarification.

I have broadly supported the approach that is set out in Amendment No. 1 from the beginning, although I understand the problems that the Government, the Minister and the Treasury have in giving that kind of commitment. Like my noble friend Lord Lipsey, I shall listen carefully to the Minister's reply and I hope that I do not have to vote against him.

I have stated that I have always been in favour of the Racing Trust in principle, but my main position is the interests of racing. When compared to that, whether ownership of the Tote passes to the Racing Trust or to another body is a minor point. I am concerned only with what is in the best interests of racing. I know that my noble friend Lord Lipsey has done everything that he can, but without the figures it is very difficult for us, even at this late stage of the Bill, to form a view.

The noble Viscount, Lord Falkland, mentioned a figure from the City. City people have floated much higher figures than that to me. If the figure was £500 million from private sources, that is a serious amount. As a former stockbroker, I know that the only figure that matters is the one that people in the end will pay and we do not yet know that. The price is a serious issue. I was very impressed when my noble friend Lord Lipsey said that he is quite convinced that the route through the Racing Trust, as is being negotiated, will be in the best financial interests of racing. If that is the case, I shall be very happy.

It would be embarrassing and unhelpful if some venture capital trust or "fat cat", as my noble friend put it, were to emerge and take over the Tote, but from racing's point of view, money is money and it is desirable. If there is a large amount of it, I would rather have it from a "fat cat" than receive much less from noble and distinguished sources.

I am therefore unclear as to what is the best bet for racing, but it does not seem to be a clear choice between taking the private course—and abandoning the commitment to use the trust—and using the trust. One could do a back-to-back deal. Were it the case that venture capitalists were prepared to give much more than can be raised from the other source, we could meet the Labour Party's manifesto commitment—we have not always done that and quite rightly, too—by passing the Tote to the Racing Trust for it to sell for a very high price to a private venture capital firm. In that way the money would come back into the trust, with the trust remaining in existence and receiving half of what might be £200 million, as well as receiving rent. There are ways in which that could be done. I am not advocating that approach. I am simply making the point that from racing's point of view what matters is what will give the most money to racing. We wait to see that outcome.

As I said, I hope I shall not have to vote on the amendment, and I hope the noble Lord will not press it, having listened to the Minister's reply. My position is very close to that of the noble Lord, Lord Lipsey, on that.

Lord Smith of Leigh

My Lords, as the noble Lord, Lord Moynihan, said in his introduction to this clause, there has been Cross-Bench support at all stages of the Bill for the position he has taken. I am one of those Peers who have taken part in the debate, but maybe my interest is somewhat different from that of other noble Lords. I want the Tote to continue as an independent organisation. I want that not simply because of the invaluable support it has given for the sponsorship of racing, but because the Tote has been a successful, innovative organisation in its own right. It has been well supported by its loyal staff who have worked for it for many years—and perhaps they deserve some reward for that. Most importantly, it is trusted by the betting public. The Tote is a real alternative to both the traditional bookmakers and the new Internet booking organisations. As such, we need it to continue.

Throughout the debates at the various stages of the Bill, we have been very much informed by my noble friend Lord Lipsey, partly because of his particular knowledge of the Bill, but also because of his general knowledge of racing. I am not sure I would agree with him that racing is a country sport; I suspect he might concede that more people from urban areas watch racing than from other areas. Nevertheless, I found his argument compelling. If we support the amendment proposed by the noble Lord, Lord Moynihan, and get into the traditional ping-pong between this House and another place, we will not be helping either the Racing Trust or the Tote. The time delay would result in such uncertainty that the objectives we all want to see might not be fulfilled.

I hope that when my noble friend the Minister sums up the debate, he will provide the House with sufficient assurances to make the amendment unnecessary.

4 p.m.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)

My Lords, with this amendment we return to the issue that has dominated the consideration of Part 1 of the Bill throughout its proceedings. As the noble Lord, Lord Moynihan, and others have confirmed, everybody who takes part in this debate is committed to the interests of horseracing. I commend them on that commitment, and I know that the amendment before us now reflects their concern. I pay tribute to the consistency and the objectivity with which these matters are being discussed.

We have considered a number of amendments of this kind before. They are designed to strengthen the position of the Racing Trust before negotiations commence between the Government and the Trust. I cannot blame anyone for doing so, but at the same time it has to be recognised that I, as a Minister of the Crown, have the interests of the taxpayer to take into account as well. We have to achieve a fair balance in our work. At each stage of the Bill's consideration, both here and in the House of Commons, the Government have argued that these amendments are unnecessary, and we still hold to that view—not because we disagree with the sentiments behind the Bill, as we too are committed to horseracing and to the Racing Trust.

The noble Lord, Lord Moynihan, has quoted our 2001 manifesto commitment, which states: We are committed to sell the Tote to a racing trust to allow it to compete commercially, with all long-term profits invested in the sport". We have repeated that over and over again, and yet here I am standing before the House to say that our intention is perfectly clear. That is what the noble Lord, Lord Lipsey, has asked me to say, and I have no hesitation in doing so. We have taken practical, positive steps to achieve that aim since the matter was last debated in this House towards the end of July.

Before the Bill's proceedings commenced, the Government encouraged the development of the Racing Trust. Since then, we have had regular and constructive discussions with the noble Lord, Lord Lipsey, and with the other members of the shadow Racing Trust. I hope that there is no disagreement between them on these matters. Certainly the Racing Trust has come across to us as a body with a consistency of purpose and no evidence of disagreement.

Throughout the consideration of the Bill, the Government have taken practical steps to make the sale of the Tote to the Racing Trust a reality. At each stage, we have started preparations as soon as has been possible. I made it clear on Report that the Government would continue to make the maximum possible progress in their preparatory work for the sale of the Tote, but I also made it clear that there were important rules of government accounting that prevented the conclusion of a final deal before the Royal Assent to this Bill. That is why it is not possible to give the noble Lord, Lord Moynihan, the guarantee he is seeking that these matters can be brought to a successful conclusion.

The government accounting rules are designed for the benefit of Parliament, not the Government. They ensure that the Government cannot commit themselves to expenditure in advance of the will of Parliament being expressed, which can only be achieved by Royal Assent. It would not only be cowardly of me to seek to depart from those Government accounting rules; it would be entirely contrary to the interests of the legislature in its relationships with Government. I hope, and I still believe, that all sides of the House will agree that that is the correct relationship and that the Government should not be able to commit to expenditure other than that which has achieved the will of Parliament.

We have made good and solid progress since I last spoke to the House in July. We have held extensive discussions between the advisers to the Government and the Racing Trust, who have now been outed as PricewaterhouseCoopers and Rothschilds respectively. These discussions have been about all aspects of the deal, not simply about the valuation.

I assure the House that the Treasury has been involved at all stages. There is no possibility of its saying, "We were not aware of any deal or valuation". The process has been entirely open. Yesterday, it was possible for PricewaterhouseCoopers, acting for the Government, to make available the key outcomes of the independent valuation that will set the context for negotiations. In return, we have received the Racing Trust's assessment of the Tote's value. That is exactly what I said in July I hoped would happen, and it is on that basis that I said we could approach a Third Reading on 14 September with positive progress having been made. Clearly, I cannot discuss the figures, because they are "commercial, in confidence".

The noble Viscount, Lord Falkland, asked me to say how far apart the figures were. If I did, I would be bringing all the negotiations into the public sphere. I cannot do that and would not wish to. Of course discussions about the valuation will continue in advance of Royal Assent; in particular, about the assumptions behind the valuations. If we can get agreement on the different financial advisers' assumptions, the probability is that any existing gap will be reduced, as valuations made on the same assumptions are less likely to have differences than those made on different assumptions. These are not negotiations, but discussions about the basis on which the valuation is made. They started pretty much immediately yesterday and are continuing.

I am confident that when the Bill receives Royal Assent and passes into law, giving us the power under government accounting rules to begin negotiations, we shall be able to start them with confidence and optimism that the legitimate interests of both racing and the taxpayer can be recognised and that a fair deal can be struck. My noble friend Lord Lipsey, who knows the figures, has said that he is optimistic—and certainly more optimistic than he was last week. However, I think that he used the word in its absolute rather than its relative sense. I share that optimism. It is our firm intention to begin negotiations with the Racing Trust as soon as possible after the Bill receives Royal Assent.

We have instructed our financial and legal advisers to pursue a successful sale to racing at a price that reflects the fair value of the Tote. Indeed, since July we have written to the shadow Racing Trust committing to a period of exclusive negotiation with it.

I was asked by the noble Lord, Lord Moynihan, about the European Commission. We have also made progress in our discussions with the Commission. The government team is meeting with its representatives later this month to discuss what we hope will be their final questions about state aid in relation to this transaction. I should remind noble Lords that when this matter arose before, we did not have insuperable difficulties with the Commission. We have to do it all over again because the authority we had to proceed is time-expired. But we have no reason to suppose that there will be any particular difference on issues of principle.

In all of these ways, the Government have acted on their stated policy of selling the Tote to the Racing Trust under terms that meet the objectives of all interested parties. In other words, all the things that I said in July would be done before Third Reading have in fact been done.

I heard what the noble Lord, Lord Moynihan, said about the report in the Observer on 1 August. He himself called them rumours. I beg the House to listen to assurances from Ministers and to the facts as they have been set out rather than to rumours. I say that because, as I have made clear, we have been working hand in hand with the Treasury throughout, which supports our approach. If those rumours had been true, that could not have been the case. Equally, if the rumours had been true, that would have implied that we have been working without the full collaboration of the Treasury. At no point during the passage of this Bill have the Government done anything other than make practical preparations for the sale of the Tote to racing. We are delivering on all the pledges I made during our proceedings on the Bill—and I was only repeating the pledges made by the Minister for Sport, Richard Caborn, in another place.

The amendment tabled in the names of the noble Lords, Lord Moynihan and Lord Luke, and my noble friend Lord Lipsey requires the Government to return to Parliament for its approval to sell the Tote to someone other than the Racing Trust. The noble Lord, Lord Moynihan, has confirmed that this amendment arises from the concern that the agreement we hope to achieve with the Racing Trust will prove impossible because the Government will demand a price well beyond the trust's ability to raise finance. We have again heard reference to a Treasury plot to undermine publicly stated government policy. I can confirm that my noble friend Lord Lipsey is right in all he says about the implications of us abandoning publicly stated government policy in order to guzzle up the proceeds of a sale on the open market.

I have to say that I am taken aback by such suggestions at this stage. I can understand that they might have been made at the end of last year when the sales strategy existed only on paper, and I understand that it could have been thought at that point that we were pursuing other approaches at the same time rather than pursuing the negotiated sale to racing, which is the only course we are pursuing. We are well into the preparatory process. We have appointed the independent valuer, who has been instructed to establish a fair value of the Tote to racing, not a maximum value that might be made on a sale to the highest bidder. And, as I have said, we are working closely with the Treasury.

Of course, the Government have the fallback position, which we need. The Racing Trust does not exist and we cannot put into legislation binding negotiations with a body that does not exist. It would be utterly irresponsible for us not to take, in legislation, the precaution of ensuring that we are not constrained in protecting the interests of the racing industry and of the public. However, we remain convinced that a sale to racing is the best way to meet both of those interests.

Before I close, let me refer to two matters raised in debate. First, the noble Lord, Lord Molyneaux, raised the issue of Northern Ireland. As he knows, horseracing is a devolved matter. The Tote and the Horserace Betting Levy Board do not operate in Northern Ireland and it will be for that administration to make any changes to legislation regarding horseracing and betting there.

Secondly, the noble Viscount, Lord Falkland, asked about a staff share incentive scheme. The Tote board has indicated that it wishes to introduce a new incentive scheme involving some equity share as part of the sale. That is one of the matters which may need to be taken forward in the negotiations when they start, but in the first place it is for the Racing Trust to reach a considered view on the proposal once it has been more fully worked up, and it would not be appropriate for me to make any further comment at this time.

So, at the risk of repetition, we have not changed our position. We have fulfilled every promise that we have made—cautious promises perhaps, but we have met every undertaking made to this House. On that basis, I urge the noble Lord. Lord Moynihan, not to press his amendment.

Baroness Noakes

My Lords, the Minister's remarks have been extremely helpful. However, before he sits down, can he clarify a point made by the noble Lord, Lord Donoughue, which has confused me a little? If the Bill goes ahead and if a sale is made to a body other than the Racing Trust, is there anything to provide that the proceeds will go to racing interests, or would that be the end of it?

Lord McIntosh of Haringey

My Lords, I made it clear on Report and it is on the record that if, in the undesirable and unlooked-for event that we sold other than to a racing trust, 50 per cent of the proceeds would go to racing.

Lord Moynihan

My Lords, I am grateful as always to the Minister for his considered response to this debate. It is the case that if everything both the Minister and his colleagues in another place have said were to be accepted as gospel, they would have absolutely no difficulty in accepting our amendment. I say that because the amendment as it stands does not require the Government to come back to this House with details of the sale to the Racing Trust, rather it looks exclusively at the position which could possibly arise if the central plank of the whole of the Government's position was to crumble; namely, a failure to sell to the Racing Trust. That is what this amendment focuses on.

I am quite certain that all the negotiations have been undertaken in good faith and that what the Minister has set out for noble Lords is exactly the position the Government would like to see, but when we look at the legislation before the House the fact is that, as it stands, there is a chance that it would not be possible for the Government to sell to a racing trust.

Perhaps I may give one example. Before Easter, my noble friend Lord Wakeham asked in Grand Committee a question about Europe and the extent to which negotiations with the Commission had led to a conclusion over the question of whether an adverse state aid ruling from Brussels could scupper the deal to a racing trust. It was pointed out at that stage of our proceedings that a letter had been in place confirming that there would be no problem with this deal, but that it had time-expired and the Government intended to renegotiate the matter with the European Union. However, the Minister has told us today that those negotiations are not complete. He stated that discussions will take place next week. What if those discussions go wrong, leading to a position where a sale to the Racing Trust could not move forward?

The whole point of this debate can best be summarised by what the Minister said at an early stage of our proceedings; namely, that even if no one owns the Tote, Parliament is its guardian. Today we have an important responsibility to racing in general and to the Tote in particular. The amendment before your Lordships will ensure that we fulfil our role as guardian of the Tote. A sale to the Racing Trust may collapse for whatever reason and that was anticipated today from all sides of the House as a possibility. Some circumstances are incapable of anticipation as to what might happen as a result of negotiations.

Last week the noble Lord, Lord Lipsey, was down in the dumps and unhappy about the way negotiations were proceeding. This week it looks much better. For whatever reason, we are guardians of the Tote. Parliament and all Members of this House who have spoken during our proceedings support the Government's manifesto commitment to sell the Tote to the Racing Trust. But as the Tote's guardian, surely it is right and proper that Parliament has the final decision on the sale of the Tote in the event that a sale to the Racing Trust is not possible, not in the event that there is a successful conclusion to the current negotiations, but exclusively in the event that a sale to the Racing Trust is not possible. Anything less would be a dereliction of our duty. I should like to test the opinion of the House on this matter.

4.21 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 106; Not-Contents, 181.

Division No. 1
Allenby of Megiddo,V. McColl of Dulwich, L.
Anelay of St Johns, B. MacGregor of Pulham Market, L
Arran, E.
Astor of Hever, L. Mackay of Clashfern, L.
Attlee, E. MacLaurin of Knebworth, L.
Baker of Dorking, L. Maginnis of Drumglass, L.
Blatch, B. Marlesford, L.
Bowness, L. Masham of Ilton, B.
Brooke of Sutton Mandeville, L. Mayhew of Twysden, L.
Brougham and Vaux, L. Methuen, L.
Buscombe, B. Molyneaux of Killead, L.
Byford, B. Morris of Bolton, B.
Caithness, E. Mowbray and Stourton, L.
Campbell of Alloway,L. Moynihan, L.
Carlisle of Bucklow, L. Murton of Lindisfarne, L.
Carnegy of Lour, B. Naseby, L.
Carrington, L. Newton of Braintree, L.
Cope of Berkeley, L. Noakes,B.
Dean of Harptree, L. Northesk,E.
Denham, L. Norton of Louth, L.
Dixon-Smith, L. O'Cathain,B.
Dundee E Park of Monmouth, B.
Eccles of Moulton, B. Perry of Southwark, B.
Elles.B. Platt of Writtle, B.
Elton, L. Plumb, L.
Erroll, E. Prior, L.
Feldman, L. Rawlings, B.
Fraser of Carmyllie, L. Reay, L.
Freyberg, L. Rees-Mogg, L.
Gardner of Parkes, B. Renton, L.
Geddes, L. Renton of Mount Harry, L.
Gilmour of Craigmillar, L. Roberts of Conwy, L.
Ryder of Wensum, L
Hanham, B. Seccombe, B.
Hanningfield, L. Selborne,E.
Hayhoe, L. Selsdon, L.
Henley, L. Simon of Glaisdale, L.
Higgins, L. Skelmersdale, L.
Hodgson of Astley Abbotts, L. Skidelsky, L.
Howard of Rising, L. Soulsby of Swaffham Prior, L.
Howe, E. Stewartby, L.
Jenkin of Roding, L. Swinfen, L.
Kimball, L. Tebbit, L.
King of Bridgwater, L. Trefgarne, L.
Kirkham,L. Trenchard,V.
Knight of Collingtree, B. Trumpington, B.
Laidlaw, L. Ullswater, V.
Laird, L. Vinson, L.
Lane of Horsell, L. Waddington, L.
Lawson of Blaby, L. Wade of Chorlton, L.
Liverpool, E. Wakeham, L.
Lucas, L. Warnock, B.
Luke, L.[Teller] Wilcox, B.[Teller]
Lyell, L. Windlesham, L.
Acton, L. Barnett, L.
Addington, L. Bassam of Brighton, L.
Ahmed, L. Beaumont of Whitley, L.
Alton of Liverpool, L. Bernstein of Craigweil, L.
Amos, B. (Lord President of the Council) Bhattacharyya, L.
Billingham, B.
Andrews, B. Borrie, L.
Archer of Sandwell, L. Boston of Faversham, L.
Ashley of Stoke, L. Bragg, L.
Ashton of Upholland, B. Brennan, L.
Avebury, L. Broers, L.
Bach, L. Burlison, L.
Christopher, L. Listowel, E.
Clark of Windermere, L. Livsey of Talgarth, L.
Clement-Jones, L. Lockwood, B.
Clinton-Davis, L. Lofthouse of Pontefract, L.
Cohen of Pimlico, B. Macdonald of Tradeston, L.
Colville of Culross, V. McIntosh of Haringey, L.
Corbett of Castle Vale, L. McIntosh of Hudnall, B.
Craigavon, V. McKenzie of Luton, L.
Crawley, B. Mackie of Benshie, L.
Davies of Oldham, L. [Teller] Maclennan of Rogart, L.
Dean of Thornton-le-Fylde, B. McNally, L.
Desai, L. Maddock, B.
Dholakia, L. Mar, C.
Dixon, L. Mar and Kellie, E.
Drayson, L. Mason of Barnsley, L.
Dubs, L. Massey of Darwen, B.
Dykes, L. Merlyn-Rees, L.
Eatwell, L. Miller of Chilthorne Domer, B.
Elder, L. Mishcon, L.
Elis-Thomas, L. Mitchell, L.
Evans of Parkside, L. Morgan, L.
Evans of Temple Guiting, L. Morgan of Drefelin, B.
Falconer of Thoroton, L. (Lord Chancellor) Morris of Aberavon, L.
Neuberger, B.
Falkland, V. Newby, L.
Falkner of Margravine, B. Oakeshott of Seagrove Bay, L.
Farrington of Ribbleton, B. Palmer, L.
Faulkner of Worcester, L. Parekh, L.
Fearn, L. Patel, L.
Filkin, L. Patel of Blackburn, L.
Finlay of Llandaff, B. Paul, L.
Fitt, L. Pendry, L.
Gale, B. Peston, L.
Garden, L. Phillips of Sudbury, L.
Gavron, L. Pitkeathley, B.
Gibson of Market Rasen, B. Ramsay of Cartvale, B.
Giddens, L. Randall of St. Budeaux, L.
Golding, B. Razzall, L.
Goldsmith, L. Rendell of Babergh, B.
Goodhart, L. Roberts of Llandudno, L.
Goudie, B. Rogan, L.
Gould of Brookwood, L. Rooker, L.
Gould of Potternewton, B. Roper, L.
Graham of Edmonton, L. Rosser, L.
Greaves, L. Rowlands, L.
Grenfell, L. Scotland of Asthal, B.
Griffiths of Burry Port, L. Scott of Needham Market, B.
Grocott, L. [Teller] Sewel, L.
Hamwee, B. Sharp of Guildford, B.
Hannay of Chiswick, L. Sheldon, L.
Harris of Haringey, L. Shutt of Greetland, L.
Harris of Richmond, B. Simon, V.
Harrison, L. Slim, V.
Hart of Chilton, L. Slynn of Hadley, L.
Haskel, L. Smith of Gilmorehill, B.
Haworth, L. Smith of Leigh, L.
Hayman, B. Snape, L.
Henig, B. Steel of Aikwood, L.
Hilton of Eggardon, B. Stone of Blackheath, L.
Hogg of Cumbernauld, L. Strabolgi, L.
Hollis of Heigham, B. Strange, B.
Holme of Cheltenham, L. Symons of Vernham Dean, B.
Howarth of Breckland, B. Taylor of Blackburn, L.
Howells of St. Davids, B. Temple-Morris, L.
Hoyle, L. Tenby, V.
Hughes of Woodside, L. Thomas of Gresford, L.
Hunt of Kings Heath, L. Thomas of Walliswood, B.
Irvine of Lairg, L. Thornton, B.
Janner of Braunstone, L. Tordoff, L.
Joffe, L. Triesman, L.
Jones, L. Truscott, L.
Kilclooney, L. Tunnicliffe, L.
Layard, L. Turnberg, L.
Lea of Crondall, L. Wallace of Saltaire, L.
Leitch, L. Walmsley, B.
Lester of Herne Hill, L. Walpole, L.
Walton of Detchant, L. Williams of Crosby, B.
Watson of Richmond, L. Williams of Elvel, L.
Whitaker, B. Williamson of Horton, L.
Whitty, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.34 p.m.

Clause 21 [Licensing of Olympic Lotteries]:

Lord Moynihan moved Amendment No. 2:

Page 13, line 16, at end insert— ( ) This section shall only have effect once the Secretary of State has laid before Parliament a report setting out in detail the cost of hosting the Olympic and Paralympic Games in London in 2012.

The noble Lord said: My Lords, as the House knows, the Opposition are wholly committed to London's bid to stage the 2012 Olympic and Paralympic Games. As part of that commitment we are pleased to support Part 3 of the Bill, which will establish an Olympic lottery to provide an estimated £750 million towards the costs of staging the games in London.

The amendment is designed to strengthen our bid and to assist the work of the excellent London bid team, under the able chairmanship of my noble friend Lord Coe. I was fortunate to be in Athens this summer to witness the impressive Kelly Holmes in her memorable run for her second Olympic gold medal. Everyone I met was impressed by the excellent organisation of the games.

In these opening remarks, I want to place on record our congratulations to the Greek Government and their organising committee on the successful staging of the 2004 Olympic Games. Similarly, I invite the whole House to join me in congratulating Team GB on their achievements this summer and in wishing our paralympic athletes every success this month. While every medal winner and personal best performance deserves our praise, I feel that particular mention should go to Kelly Holmes and to Matthew Pinsent and his coxless four for their outstanding achievements.

On the amendment, it is clear that the Government must be a key stakeholder in any Olympic bid. The International Olympic Committee has required the host government to act as the ultimate guarantor of the games, although the Government have indicated that they intend to discharge that obligation through the National Lottery and the London Assembly.

From our discussions during the passage of the Bill, noble Lords will be aware that, in recent times, the majority of Olympic Games organisers have had difficulty in keeping to their original budgets. Indeed, as the Minister for Sport said in evidence to a Select Committee in January 2003: On the financing, one point that was interesting on our visits to cities that have already run Olympics was that in broad terms, on the costs, every one of them has doubled from the first figure that was given".

As London 2012 formulates a first-class technical bid for the 2012 Olympics, it is essential that its budget, and the Government's formula behind that budget, is equally well researched and costed. Knowing my noble friend Lord Coe as I do, and having seen his dedication and commitment as a fellow Olympian at the Moscow Games, I have absolutely no doubt that the London bid will be technically gold standard.

Our bid has been strengthened by the recent words of support from the Prime Minister. Last week, it was heartening to hear the Prime Minister say that he considered the growing sense, both at home and internationally, that London can indeed win the Olympic bid for 2012 to be one of the most important developments of this summer.

I understand that this Thursday my noble friend Lord Coe is due to present an update on the technical details of the bid, including the budget, to the Prime Minister and his Cabinet. The final submission to the International Olympic Committee of London's full bid book will take place on 15 November this year. That comprehensive document will give details of the technical aspects of our plans to host the games, including security, funding, sporting facilities, infrastructure, transport and accommodation. London's full bid book will, of course, be thoroughly costed. My amendment refers to those costings.

On the cost overruns, it has been calculated that if one uses the Minister of Sport's observations made on 15 January 2003 and applies them to the London games—namely, if the costs for London were to be doubled from £4 billion to £8 billion—the public subsidy required would increase by some £2 billion, to £6 billion. Lottery funding to all the good causes would be devastated as all its income would be taken for approximately 18 months and that would lead to an increase in the council tax precept for Londoners from an average £20 a year to £95 a year for eight years.

While all the good causes support the London 2012 Olympic bid, noble Lords may be aware that the proposed Olympic lottery will impact upon their income. That is one of the reasons why my amendment requires the Government to provide an up-to-date report on the costs of staging the London games before the Olympic lottery commences. Such a requirement will assist the National Lottery good causes in planning ahead more effectively. The additional parliamentary scrutiny should assist the Government and the London bid team to maintain a tight control on the budget.

When I tabled a similar amendment in Grand Committee, the Minister indicated that he was not averse to the principle of laying before Parliament a copy of this document. I trust that the Minister is still minded to support such a proposal. I beg to move.

Lord Addington

My Lords, Amendment No. 3 in my name is grouped with Amendment No. 2 of the noble Lord, Lord Moynihan. The issues raised here are ones of reporting and of knowing what is going on throughout the bid—the initial costing and reporting what has happened in the process of bidding for the games.

We have discussed this matter on several occasions, trying to get the right answer, and have had private discussions with the Minister. This is one last attempt to try to make sure that we get enough information into the public sphere, that not only do we have a way of making sure that we know what we are doing throughout the bid process and that the general public know what is going on, but also that we have a good record about the way the process was constructed. The Commonwealth Games of Manchester and this bid may be the two big successes we have, compared with a series of failures.

Building up that store of knowledge is what I have always been interested in. Also, if we fail in the future at anything, let us fail for different reasons from the ones for which we fail at this time. I do not expect that we will fail—I hope that we will not—but let us build up a store of knowledge. That is all I am trying to do. It is one last attempt to clarify what the Government have done in this area and what they should do in future. We have made progress in discussions. With this amendment I give the Government one last chance to clarify where the information will be so that we can build upon our body of knowledge for all sporting and—hopefully—cultural events in the future.

Lord McIntosh of Haringey

My Lords, I have been told by the Whips to keep this short so if I may read into the record for the sake of completeness my support for what the noble Lord, Lord Moynihan, says about our performance in the Athens Olympics and our confidence in the quality of the bid for the 2012 Olympics. I will not say any more at this time because government Ministers more intimately concerned have already said very similar things.

The purpose of Amendment No. 2 is to ensure that Parliament is aware of the cost of hosting the Olympic and Paralympic Games in London in 2012. We support the principle and I can confirm that we intend—as the noble Lord, Lord Moynihan, asked—to place details of the costs and revenues relating to the staging of the games before the House. As he said, the costs and revenues associated with staging the games in 2012 will be detailed in the candidate file being prepared for submission to the IOC. It has to be submitted by 15 November. It cannot be made public, according to its rules, until we have received confirmation of receipt from the IOC. But we intend to lay the full document before Parliament in November following receipt of this confirmation.

We believe that having the requirement on the face of the legislation is unnecessary. We resist the amendment because it has the potential to cause unintended delay to the start of an Olympic lottery. It could produce a further layer of bureaucracy. It could require a new report to be produced, or the repeated submission of information that would already be at the disposal of Parliament.

If a further report was required, for example after the IOC had selected London as host city in 2005, that could delay the issuing of Olympic lottery licences and therefore the start of the Olympic lottery, which I know is a cause close to the heart of the noble Lord, Lord Moynihan. I know that he wants to get the lottery game going as soon as possible. I hope that, given the assurance that he asked for, he will be happy to withdraw the amendment.

The amendment of the noble Lord, Lord Addington, calls for the Secretary of State to lay reports before Parliament following the election of the host city and, in the event of a successful London bid, following the staging of the 2012 Olympic and Paralympic Games. As he says, I have discussed the amendment with him. These reports would cover such issues as financing, the raising and distribution of lottery money, and the legacy. We are all agreed that there must be due processes in place to capture all available information in relation to the staging of a 2012 Olympic Games. I am sure that the noble Lord, Lord Addington, understands that I do not think that the amendment is the best way of achieving that end.

There are already a number of arrangements in place to capture key information and hold accountable the bodies charged with delivering the games and ensure an appropriate legacy—which is a perfectly valid point by the noble Lord, Lord Addington. London 2012, the bid company, is already obliged to produce annual accounts that will be placed in the Libraries of both Houses. In addition, the stakeholders have in place arrangements to ensure appropriate and rigorous oversight of the progress and financing of the bid.

We can be confident that in the event of an unsuccessful bid, DCMS, the London Assembly, the British Olympic Association, and the Culture, Media and Sport Select Committee, would all be poring over the reasons why the bid failed.

In relation to lottery distribution, the Olympic lottery distributor is already responsible for producing annual reports to the Secretary of State to lay before Parliament under the provisions of the Bill. This mirrors the arrangements for existing lottery distributors and, with existing powers of parliamentary scrutiny, provides sufficient financial controls.

4.45 p.m.

As regards the staging of the games, the London Organising Committee for the Olympic Games (LOCOG) would be required to produce annual reports and accounts, as would any other body created to deliver the games. LOCOG—a new word for me—is required by IOC to produce a post-games report dealing with all aspects of staging the games, including an analysis of performance. I cannot see that commissioning a further report would enhance the legislation in any way.

The following is the point about capturing the benefit of the games. We are keen to ensure that a key legacy of bidding, whatever the outcome, is transferable knowledge that can be applied to future bids. However, we do not think it necessary to do more than is already required.

In relation to capturing lessons learnt for the future. I can confirm that plans are already in place. By November this year, the Sports Council will sign off a mega events strategy, including a 20-year events forecast and guidance for bidding. The latter incorporates lessons learnt from the Commonwealth Games in Manchester and will assimilate any new 2012 messages. The information will be reviewed on a six-monthly basis by a new DCMS, devolved administration and UK sports events strategy forum, which will report to the sports Cabinet.

I hope that it is clear that we agree entirely with the thinking behind both amendments and that we have in place plans to ensure that these are given effect.

Lord Moynihan

My Lords, I am grateful to the Minister for his response. I am also pleased to take this opportunity to support the principle behind the amendment tabled in the name of the noble Lord, Lord Addington. What he proposes in the amendment seems eminently sensible and should be of benefit to Parliament, sport and the general public.

I recognise that annual reports and accounts will be published. I also agree that the post-games report would be greatly important. The Minister is right to refer to the fact that in November this year we will have the opportunity to assess the funding of the games. However, the amendment that we have tabled is specific to the time between winning the bid in July next year and starting the lottery game.

At the present time there is no opportunity for Parliament to consider an important report, setting out in detail how the government of the day will fund the Olympics and Paralympics in 2012. It is import ant that Parliament does have that opportunity. It is particularly important in light of the widely rumoured favourite election date of 5 May 2005, which comes before the July decision in Singapore. It is appropriate that a new government have the opportunity. Certainly we would welcome from our Benches when we are in government after May next year the opportunity to come to Parliament with our thinking about the funding.

In the light of that expectation, I do not feel that the Minister is right to dismiss the importance of a report being presented to Parliament at that time in the process. For those reasons I would like to test the opinion of the House.

4.49 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 89; Not-Contents, 175.

Division No.2
Allenby of Megiddo,V. Lyell, L.
Anelay of St Johns, B. McColl of Dulwich, L.
Arran, E. MacGregor of Pulham Market, L.
Astor of Hever, L.
Attlee, E. Mackay of Clashfern, L.
Blatch, B. MacLaurin of Knebworth, L.
Bowness, L. Mancroft, L.
Bridgeman, V. Marlesford, L.
Brooke of Sutton Mandeville, L. Mayhew of Twysden, L.
Brougham and Vaux, L. Morris of Bolton, B.
Byford, B. Mowbray and Stourton, L.
Caithness, E. Moynihan, L.
Carlisle of Bucklow, L. Naseby, L.
Carnegy of Lour, B. Newton of Braintree, L.
Colwyn, L. Noakes, B.
Cope of Berkeley, L. [Teller] Northesk, E.
Craigavon,V. Norton of Louth, L.
Crickhowell, L. O'Cathain, B.
Dean of Harptree, L. Palmer, L.
Denham, L. Park of Monmouth, B.
Dixon-Smith, L. Platt of Writtle, B.
Dundee, E. Plumb, L.
Elton, L. Reay, L.
Erroll, E. Renton of Mount Harry, L.
Fookes, B. Roberts of Conwy, L.
Forsyth of Drumlean, L. Seccombe, B. [Teller]
Fowler, L. Selborne, E.
Gardner of Parkes, B. Selsdon, L.
Geddes, L. Shaw of Northstead, L.
Hanham, B. Simon of Glaisdale, L.
Hanningfield, L. Skelmersdale, L.
Hayhoe, L. Soulsby of Swaffham Prior, L.
Henley, L. Stewartby, L.
Higgins, L. Strathclyde, L.
Hodgson of Astley Abbotts, L. Tebbit, L.
Howard of Rising, L. Trenchard, V.
Howell of Guildford, L. Trumpington, B.
Jenkin of Roding, L. Tugendhat, L.
Kimball, L. Ullswater, V.
Knight of Collingtree, B. Vinson, L.
Laidlaw, L. Waddington, L.
Lawson of Blaby, L. Wade of Chorlton, L.
Liverpool, E. Wakeham, L.
Lucas, L. Wilcox, B.
Luke, L. Windlesham, L.
Acton, L. Bassam of Brighton, L.
Addington, L. Bernstein of Craigweil, L.
Adebowale, L. Bhattacharyya, L.
Ahmed, L. Billingham, B.
Alton of Liverpool, L. Borrie, L.
Amos, B. (Lord President of the Council) Boston of Faversham, L.
Bragg, L.
Andrews, B. Brennan, L.
Archer of Sandwell, L. Broers, L.
Ashley of Stoke, L. Brooks of Tremorfa, L.
Ashton of Upholland, B. Burlison, L.
Avebury, L. Chan, L.
Bach, L. Christopher, L.
Barker, B. Clark of Windermere, L.
Barnett, L. Clement-Jones, L.
Clinton-Davis, L. McNally, L.
Cohen of Pimlico, B. Maddock, B.
Corbett of Castle Vale, L. Mar and Kellie, E.
Crawley, B. Mason of Barnsley, L.
Davies of Oldham, L. [Teller] Massey of Darwen, B.
Dean of Thornton-le-Fylde, B. Maxton, L.
Desai, L. Merlyn-Rees, L.
Dholakia, L. Methuen, L.
Dixon, L. Miller of Chilthorne Domer, B.
Drayson, L. Mitchell, L.
Dubs, L. Morgan, L.
Dykes, L. Morgan of Drefelin, B.
Eatwell, L. Morris of Aberavon, L.
Elder, L. Neuberger, B.
Evans of Parkside, L. Oakeshott of Seagrove Bay, L.
Evans of Temple Guiting, L. Parekh, L.
Falconer of Thoroton, L. (Lord Chancellor) patel, L.
Patel of Blackburn, L.
Falkland, V. Paul, L.
Falkner of Margravine, B. Pendry, L.
Farrington of Ribbleton, B. Peston, L.
Faulkner of Worcester, L. Phillips of Sudbury, L.
Filkin, L. Pitkeathley, B.
Finlay of Llandaff, B. Prys-Davies, L.
Gale, B. Radice, L.
Garden, L. Ramsay of Cartvale, B.
Gavron, L. Randall of St. Budeaux, L.
Gibson of Market Rasen, B. Rea, L.
Giddens, L. Redesdale, L.
Golding, B. Rendell of Babergh, B.
Goldsmith, L. Rennard, L.
Goodhart, L. Richard, L.
Goudie, B. Rix, L.
Gould of Brookwood, L. Roberts of Llandudno, L.
Gould of Potternewton, B. Rooker, L.
Graham of Edmonton, L. Roper, L.
Greaves, L. Rosser, L.
Griffiths of Burry Port, L. Rowlands, L.
Grocott, L. [Teller] Scotland of Asthal, B.
Hamwee, B. Sewel, L.
Hannay of Chiswick, L. Sheldon, L.
Harris of Haringey, L. Shutt of Greetland, L.
Harris of Richmond, B. Simon, V.
Harrison, L. Smith of Clifton, L.
Hart of Chilton, L. Smith of Gilmorehill, B.
Haskel, L.
Haworth, L. Smith of Leigh, L.
Hayman,B. Snape, L.
Henig, B. Steel of Aikwood, L.
Hilton of Eggardon, B. Stone of Blackheath, L.
Hogg of Cumbernauld, L. Strabolgi, L.
Hollis of Heigham, B. Symons of Vernham Dean, B.
Holme of Cheltenham, L. Taylor of Blackburn, L.
Howarth of Breckland, B. Temple-Morris, L.
Howells of St. Davids, B. Tenby, V.
Hoyle, L. Thomas of Gresford, L.
Hughes of Woodside, L. Thomas of Walliswood, B.
Hunt of Kings Heath, L. Thomson of Monifieth, L.
Irvine of Lairg, L. Thornton, B.
Janner of Braunstone, L. Tordoff, L.
Jones, L. Triesman, L.
Kilclooney, L. Truscott, L.
Layard, L. Tunnicliffe, L.
Lea of Crondall, L. Turnberg, L.
Lester of Herne Hill, L. Wallace of Saltaire, L.
Lipsey, L. Walmsley, B.
Lockwood, B. Walton of Detchant, L.
Lofthouse of Pontefract, L. Warner, L.
McDonagh, B. Watson of Richmond, L.
Macdonald of Tradeston, L. Whitaker, B.
McIntosh of Haringey, L. Whitty, L.
McIntosh of Hudnall, B. Williams of Crosby, B.
McKenzie of Luton, L. Williams of Elvel, L.
Mackie of Benshie, L. Williamson of Horton, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 3 not moved.]

Clause 40 [Commencement]:

[Amendment No. 4 not moved.]

Lord McIntosh of Haringey

My Lords, I beg to move that the Bill do now pass.

Moved, That the Bill do now pass.—(Lord McIntosh of Haringey.)

On Question, Bill passed, and returned to the Commons with amendments.

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