Member News
By Baroness Noakes - 4th July 2010
In last month's Budget, the Chancellor of the Exchequer had just 10 words on the Tote: "We will resolve the future of the Tote – at last."
But what does that mean? The Tote – formally the Horserace Totalisator Board – has been operating under the shadow of having its future sorted out for so many years now that one more statement from the government of the day may make little difference.
The Tote is one of those strange bodies that are found around the public sector. It was formed by statute over 80 years ago, is owned by no-one, but is clearly under the auspices of the government which has various statutory powers over it.
The racing industry has always laid moral claim to the Tote, which provides valuable financial support to racing from the profits of its pool betting and chain of off-course betting shops.
Privatisation of the Tote was first put forward in the late 1980s, but was successfully seen off by the Tote's redoubtable chairman, Woodrow Wyatt. In the late 1990s, under a new chairman and a new Labour government, a lengthy review was carried out. The racing industry lobbied effectively to get a 2001 Labour manifesto commitment to sell the Tote to a racing trust. There was an understanding that the racing trust would not have to pay the full market value in recognition of the symbiotic relationship between the Tote and racing.
Legislation passed in 2004 gave the government the power to transfer the Tote's assets to a company which could then be sold. Ominously, the legislation did not deal with the onward sale, though government ministers made several statements saying that if a transfer to racing did not take place, 50 per cent of the proceeds would be passed to racing.
The EU then ruled that a transfer at less than market value would breach state aid rules. This killed off the racing trust idea.
In early 2008 the government turned down a commercial bid from a racing consortium as being below market value, thought to be around £400m, and put the Tote on the market. A few months later the government pulled the sale process, citing market conditions.
It has been largely quiet since then, though the Tote has often been rumoured to be on the sale list in order to help to reduce the government’s deficit.
George Osborne's half-sentence on the Tote did not mention selling it. The thorny issues of price and value, state aid and the claims of the industry, are no easier to solve now than in 2008.
This has raised hopes in some quarters that the status quo may be confirmed as the long-term solution.
But the retention of central government involvement in the Tote is hardly consistent with either the coalition's dislike of big government or the Treasury's need for money. Decentralisation is a nice idea but does not sit well with commercial interests.
The racing industry hopes that the new government will find the finishing line this time. Another 10 years of uncertainty hanging over the Tote would be very dispiriting indeed.
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