Politicians blast plans for levy replacement system

Politicians Lord Lipsey and Philip Davies have described the government's plans to replace the Levy Board as "illegal and ill-judged".

Their response to the government consultation on the second stage of the reforms to the levy system questions whether the Gambling Commission is an appropriate body to take over the collection duties of the Levy Board and whether the Levy Board should be abolished.

Having moved to extend the levy to operators based offshore for the first time in April, the government launched a consultation in December on the second stage of the process which would abolish the Levy Board, with the Gambling Commission taking over collection duties and a new Racing Authority, representing the sport's main constituents, in charge of distribution.

However Labour peer Lipsey and Conservative MP Davies said in their submission: "We wholly oppose this, in principle and in practice.

"In principle, the Gambling Commission is not an appropriate body to exercise this function. Its statutory concerns are the regulation of gambling to protect children and the vulnerable, to ensure fairness and to prevent crime.

"The levy is not related to any of those purposes. It is used to subsidise horseracing. In our view, the statutory remit of the Gambling Commission does not permit it to exercise this role."

Lipsey and Davies also claimed that the government's use of a Legislative Reform Order to make the changes was "an abuse of parliamentary procedures" and the resulting secondary legislation would be "ultra vires" – beyond the government's legal authority.

They added: "We can think of no example where the government has previously moved wholesale any tax collecting role from one entity to another either by statutory instrument or executive action. It is something which should always be the subject of primary legislation."

Primary legislation would also be needed to ensure there was no conflict of interest between the Gambling Commission's role as regulator and levy collector, they claimed.

Lipsey and Davies also said it was not clear why the Levy Board needed to be replaced.

"The Levy Board is a tight ship," they said, "with a total staff of only ten.

"It has been well led in recent years. As an organisation it is wholly devoted to racing in a way the Gambling Commission is not. And it knows its territory. Who would you most back to collect what is due?"

The two politicians also argued that far from removing the government from the levy process, as was desired, the reforms "embedded it in the heart of that process".

"Ministers now determine what the rate of levy should be," they added. "This is a recipe for more government involvement in racing and not less."

They concluded: "We trust that ministers will think again. If they do not we will do everything we can to persuade parliament to force them to think again by rejecting this illegal and ill-judged proposal."

Last year Lipsey and Davies also opposed the government plan to extend the levy to offshore operators, saying they preferred a commercial arrangement between betting and racing.

The government consultation closes on February 16.

Members can read the latest exclusive interviews, news analysis and comment available from 6pm daily on racingpost.com