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Lord McIntosh of Haringey: Like the noble Viscount, Lord Astor, I apologise to the Grand Committee for the fact that I was unable to be present at Second Reading. I, too, was abroad. But my sorrow at not being present at Second Reading has been diminished by the excellent Second Reading speech that the noble Lord, Lord Moynihan, has given to the Committee. It had nothing to do with his amendment but it was a good piece of rhetoric and I admire him for it.

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Unfortunately, it is my duty as the Minister responsible for the Bill in this House to respond to the amendment rather than to the speech because that is what is before us. I shall do my best to do that.

This is one of several amendments that the Opposition have tabled to bring the Government back to Parliament for further approval before various parts of the Bill can be implemented. I understand their motives, which the noble Lord, Lord Moynihan, has made very clear, but I cannot accept that further parliamentary approval is necessary before the Government proceed with the dissolution of the Tote, which is the subject of Clause 1.

By the way, we are not talking about nationalisation of the Tote; the Tote is already nationalised. It was set up in 1928 as a body that is effectively controlled by government through the power to appoint the board. It is a non-departmental public body and therefore a body in the public sector. When the noble Lord, Lord Moynihan, says that there is no reference in the Bill to the powers to privatise, I can assume only that he has not read Clause 5. That is a bit odd, as he proposes to oppose the Question that Clause 5 stand part of the Bill.

The Bill makes provision for dissolution to take place on an appointed day, and for that appointment to be made by statutory instrument without any private parliamentary procedure. That is not unusual in the circumstances. If it had been unusual or in any way controversial, the Delegated Powers and Regulatory Reform Committee, under the noble Lord, Lord Dahrendorf, would have commented to that effect. It is a perfectly normal and appropriate way to proceed; it is not even as though the Government could proceed with the appointed day without anyone knowing, because Clause 3(9) would require the Secretary of State to,


    "consult the Board and the successor company before appointing the appointed day".

As I said, the amendment is one of a number that would require the Government to return to Parliament during the process of selling the Tote set out in the Bill. Without making a Second Reading speech, I shall address the general points underlining the amendments. It has been suggested that our reluctance to come back to Parliament for further approval before proceeding with a sale to a non-racing buyer gives the Government an unfair advantage in our negotiations with the Racing Trust. I cannot accept that that is the case. The Government did not have to identify the Racing Trust as the preferred buyer. If our intention had been to seek the maximum possible return from the sale of the Tote, we would have adopted a different strategy altogether.

The Bill as drafted is completely neutral. It puts both sides in the same position when negotiations begin. Any amendment that committed the Government to a set price or model—such as a 50 per cent discount, which is the subject of a later, related amendment—must by definition unfairly strengthen the position of the other side, the Racing Trust, in negotiations. I am more than happy to say again that we will adopt a transparent approach to the pricing of the Tote. The

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noble Viscount, Lord Astor, seemed to think that we had given no thought to the price. I assure him—it is well known—that we of course took advice on the pricing of the Tote. The Tote and the Racing Trust themselves took advice. We are a good deal further forward than some people are prepared to accept.

The transparent approach will be based on the valuations undertaken both by our advisers and by those working for the Racing Trust. It is well known that a 50:50 split will broadly be the starting point for negotiations, but such commercial transactions are never cut and dried. Our commitment to a sale to the Racing Trust has manifested itself in deeds rather than words alone, and I ask that we be judged on that.

There have been suggestions that we have some ulterior motive to pull the rug from under the feet of the Racing Trust; that is what is implied in the accusation by the noble Lord, Lord Moynihan, that this is only a nationalisation Bill. No one who looked at the evidence could concur with that. Let me give a few examples. Sale to the Racing Trust is a manifesto commitment. We worked over a long period with the Tote, the Racing Trust and the racing industry to bring the sale about. We laboured long and hard within the Government to gain agreement to a seven-year exclusive licence that we intend will be issued only if there is a sale to racing. We set up project groups to begin preparations for the sale. A dedicated liaison group is made up of officials and representatives of the Racing Trust and the Tote, and its first meeting will be before the end of next month.

It has been said both here and in the Commons that we have brought forward the Bill and sought support for it on the basis that it is there only to enable a sale to racing to take place. Indeed, the noble Lord, Lord Moynihan, said just that. I am disappointed if that is the impression that has been given, because we have never said that. Let me make it very clear: we seek Parliament's approval for this part of the Bill on the basis that it will empower the Secretary of State to sell the Tote. Having said that, we are completely focused on the longstanding strategy of selling the Tote to racing. That is not, and cannot be, our only option.

We have been open with the Racing Trust about process and what will be required, but it will have to meet us halfway. We want a fair price for our share of the Tote. That must be right, but beyond that we have never been in the business of seeking to squeeze every penny out of the deal. If we were, we would have proposed a quite different sales strategy.

I apologise for going wide of the amendment. I did so because this and later amendments are inextricably linked. However, I have been talking about amendments that are before the Committee at present, and I have, I hope, given a suitable answer to this amendment.

Viscount Astor: The Minister said that this was not a nationalisation because in effect the Government owned the Tote by virtue of the Home Secretary's having the power of appointment. Does he accept that, when the Tote was set up in 1928, the Home Secretary had the power to appoint the chairman, with one

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member of the board to be appointed by the Home Department, one by the Secretary of State for Scotland, one by the Minister of Agriculture and Fisheries and one by the Chancellor of the Exchequer? But out of the other members, three were appointed by the Jockey Club, two by the National Hunt Committee, one by the Racecourse Association and one by the Committee of Tattersalls. At that stage, the Government were in a minority, so it has always been my view that the Home Secretary may have had the power to appoint the chairman but has never formally controlled the Tote.

Lord McIntosh of Haringey: It is a non-departmental public body and is classified as such in the national accounts. It is certainly true that there is doubt whether it would be possible to sell the Tote by ministerial action alone; that is why we have come to Parliament instead.

Viscount Astor: I am grateful to the Minister for acknowledging that there is a grey area regarding the Government's ownership of the Tote.

Lord Lipsey: Is the Minister contending that, because something is classified in the national accounts, that determines its status? He will have read the opinion of Mr Kerridge QC and his colleague about ownership of the Tote, which cannot be read as sustaining that view at all. I am afraid that the Office for National Statistics does not yet determine the state of law in this country.

Lord McIntosh of Haringey: I have acknowledged to the noble Viscount, Lord Astor, that there is a grey area, which is why we are coming to Parliament rather than taking ministerial action.

Viscount Falkland: We are seeing the rare machinery of a transfer from a non-departmental body, as the Minister has correctly described it, to the private sector for a consideration. What he said is interesting. I am not sure whether, even now, we are discussing what is in the amendment—perhaps I will be corrected on that.

I do not intend to make a Second Reading speech, but everybody in racing is concerned about what will be the likely consideration. I took the Minister to be saying that we are looking at a normal commercial transaction. That would be a simple matter: you would put a value on the Tote—which should not be too difficult for betting shops and the pool—and other assets that it might hold; you would give a 50 per cent discount, and there would be no problem at all. We are not looking at that; we are looking at a figure that will be plucked from the air by the Treasury, which the department will then argue with or accept and pass on. If the price is too high, the trust will be saddled with a burden that it cannot bear. That would hit very badly at those who contribute to the Tote and those who have done so. In reality, the Tote is owned by those who have contributed to it—the punters of this country—since 1928. I thoroughly approve of the machinery that the Government are putting forward,

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as I said at Second Reading, but I am not in a position to say whether I support the amendment, because I do not understand how any of the argument so far relates to it.


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