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Dáil Éireann debate -
Thursday, 21 Apr 1994

Vol. 441 No. 7

Irish Horseracing Industry Bill, 1994: Second Stage.

I move: "That the Bill be now read a Second Time."

The Bill proposes in effect to replace the Racing Board and Racecourses Acts, 1945 and 1975, and put in place a new comprehensive legislative framework for the horseracing industry in Ireland. Before I deal with the Bill itself, its various provisions and the circumstances that gave rise to the need for it, I would like to say a little on the significance of the industry.

We have a long and well-established tradition in Ireland in breeding throughbred horses for racing or export. While in more recent times we have seen the development of some large studs, the breeding of thoroughbreds, in the main continues to be a farm-based activity where farmers keep two or three brood mares in a mixed enterprise system. about 7,000 thoroughbred foals are registered annually. We are recognised worldwide for the skills that we have shown in horse breeding and as a result we have achieved an international reputation for producing quality horses. Our horseracing industry is also held in high esteem, internationally. The organisation and structure of our racing industry are already at a stage of development which surpass many of our counterparts abroad. This provides a firm base for continued development.

This is not however to say that we do not have difficulties in the industry and that some change is not required. Every economic sector needs to take stock of itself on a regular basis, to examine its structure and the means by which it can best equip itself for the future in order to achieve its objectives. A review of the overall organisational structure of the horseracing industry is appropriate, given its importance to our economy. There are about 25,000 people employed either directly or indirectly in the horseracing and breeding sectors.

Latest figures for output of the horse industry indicate an annual value of over £60 million. Exports are valued at about £50 million annually and there are encouraging signs of new buyers in the market. If the existing marketing promotions are continued and enhanced the overall position can be greatly improved. Irish Thoroughbred Marketing is doing a great job in promoting Irish thoroughbreds. We have recognised this by increasing the budgetary provision for this body in 1994.

Racing is a popular sport. The race meetings which take place at 26 racecourses around the country, and which are attended by over one million people, from an integral part of life in Ireland. These events also make a valuable contribution to our tourism industry.

The level of betting at horseracing in Ireland is substantial. Levies on betting at racecourses generate between £3 million and £4 million annually which goes back into the industry. The interest in racing here and the traditionally successful participation of Irish horses in many foreign races result in a high level of off-course betting. Such betting is not confined to horseracing events. Nevertheless the racing industry, and the interest it generates, is the major influence in achieving an annual turnover in off-course bets of £350 million with an annual yield of about £35 million to the Exchequer.

Despite its size and relative strength, this industry has not escaped the recession which has hit the sector worldwide in recent years. The position of the race horse owner has become particularly critical. The costs associated with keeping a horse in training have increased more rapidly than prize-money. In turn this has caused problems for some trainers who are finding it increasingly difficult to retain their patrons or to find new ones. On-course betting turnover which generates the main sources of income for the Racing Board has been in decline in recent years. For example, bookmaker on-course betting turnover fell from £104 million in 1990 to just over £70 million last year with a resultant decline in levy income from £5.2 million in 1990 to just over £3.5 million in 1993. As a consequence, the level of funds available to the industry as a whole has been contracting and there have been insufficient moneys available for development of racecourse facilities and prize money. This is most unfortunate at a time when horse racing has to compete with an ever growing list of alternative leisure activities.

Unless the facilities available at racecourses are continually improved, there is a danger that the industry could get caught in a downward spiral of falling attendances, lower levels of betting and consequent reductions in income accruing to the Racing Board, with little or no money available for capital development.

The position would have been much worse but for the action taken by the Government to introduce a grant-in-aid for the Racing Board in 1989. As a result, the board has obtained over £13 million from the Exchequer in the four years from 1990 to 1993. Of this figure £7.5 million was used to supplement prize money at the lower levels and about £4 million to develop racecourse amenities. The balance was allocated to promotion and advertising of the sport, marketing of horses and the provision of infrastructural services. These measures have brought about a significant degree of improvement. Most people in the industry would agree that, with an improved organisational structure and greater resources, the horseracing industry has considerable potential for growth leading to increased income for the economy generally and, in particular, to additional employment in the sector. The racing industry is a labour-intensive one, its expansion being directly reflected in higher employment.

The problems of the industry can be traced to shortage of funds and the lack of a coherent approach to its development. Having two separate bodies with, to some degree, overlapping responsibilities certainly does not help to bring cohesion into the industry. That is not to be critical of either body. The governing bodies — the Turf Club and the Irish National Hunt Steeplechase Committee — have done very valuable work in administering Irish racing for over two centuries. Their guardianship of the rules of racing and of its integrity is recognised domestically and internationally as being first class. The Racing Board, for its part, has, since its establishment in 1945, been an excellent focus for the financing and development of the industry. All of those who accepted appointment to the Racing Board and the members of the governing bodies served in a voluntary capacity. All are entitled to our thanks.

None of that, however, takes away from the fact that, in present circumstances, the absence of a single body to provide the focus for direction and funding in the industry is a serious impediment to its development. That is why we are now proposing in this legislation the establishment of a new horseracing authority to provide that focus for the future.

The new Bill, as well as proposing a new organisational structure, will provide a comprehensive legislative framework for the industry. We are providing in this legislation for the development of the industry well into the next century.

Our guiding principle in all of this — and our only motivation — is to put in place arrangements and legislation that will assist the industry to realise its full potential.

In framing these proposals we were conscious of three considerations in particular. Firstly, that the new Authority would be a representative one, covering the main sectors in the industry and in a position to give clear direction to the industry. Thus, contrary to some media views, what we are putting in place is not just a new Racing Board, it is a new Authority.

Secondly, in the new arrangements we proposed to preserve the strengths of the present. In particular, we were very conscious of the need to provide for the independence of the governing bodies as the institution responsible for the rules of racing and the integrity services and that the efficient administration provided by the Registry Office would continue to be available to the industry. The governing bodies have administered Irish racing now for over 200 years and we are deeply indebted to them for their unstinted service to the industry. Without their contribution racing could not have developed. The two bodies have carried out their functions professionally and regulated racing with impartiality. The governing bodies have not confined their involvement in the sector to the provision of services and the implementation of rules. At critical times for the industry they have invested funds, which they earned outside their formal role in the sector, back into the industry for the benefit of all. Irish racing certainly would not have flourished except for the major contributions of the governing bodies in the past 200 years.

In restructuring the industry it would indeed be very foolish for any Minister to seek to erode seriously the position of the governing bodies. What I have proposed in this Bill is to have written into legislation the functions of the bodies. Section 39 of the Bill provides for their continued regulation of horseracing, the making and enforcement of the rules of racing and the provision of the integrity services. They will be referred to jointly as the Racing Regulatory Body.

The Racing Regulatory Body will also have three places on the new Authority as of right under the provisions of the schedule to the Bill and it is, of course, possible that other members of the Authority representing other interests will also be members of the Turf Club or National Hunt Steeplechase Committee.

There are other provisions in Part 3 of the Bill giving the Racing Regulatory Body the statutory right to make charges for its services and guaranteeing to that body the cost of its integrity services. Contrary to some media comment, the position of the governing bodies, far from being undermined, is in fact being strengthened by the new legislation. The third consideration is to strengthen the financial base of the industry.

We are all conscious of the financial problems which have faced the industry in modern times. It was to help to meet these problems that the Government provided over £13 million to the industry through the Racing Board in the past four years. This is very tangible recognition of the importance the Government attaches to the industry. In line with the agreement on the establishment of the new Authority the Government decided to increase its contribution this year by over 100 per cent, that is doubling the amount. As a result I have been able to provide in the 1994 Vote for my Department close on £7 million for the industry. This amount, which is at least equal to the tax revenue from off course betting on Irish racing, represents major support for the racing industry.

It is our intention to maintain this support in the future, which should facilitate the continued improvement of prize money, the development of badly needed facilities on racecourses and the promotion of Irish racing and the Irish horse at home and abroad.

The responsibility of facing up to the current financial needs of the industry cannot, of course, all be placed on Government grants. The industry itself must do more in this regard. A particular responsibility will rest on the new Authority to see that attendances increase, revenue from betting maximised and sponsorship encouraged. The new legislation opens up greater opportunities to increase the overall level of betting turnover and levy revenue than were available to the Racing Board. I hope these opportunities will be grasped in a way that will see revenue from this source greatly increased to the benefit of the industry as a whole.

Section 54 of the Bill allows the Authority to apply a levy on all bets placed at a racecourse on horse races or any other events taking place elsewhere. Heretofore these were regarded as off-course bets and were liable to a 10 per cent off-course betting tax. The Finance Act will be amended to remove the 10 per cent tax on such bets but the Authority will be required to apply a rate of levy on those bets equivalent to the rate of tax applying to similar bets placed on the high street — a 10 per cent levy. The result will be that the revenue from levies on all bets placed at a racecourse will go the Authority for the benefit of horseracing. While the amount of betting at racecourses on off-course events at present is estimated to be quite small there will be under the new legislation an incentive for the new Authority to develop this source of income.

Section 63 provides for an amendment to the Totalisator Act, 1929. There is a provision in that Act which obliges any person operating a tote service to provide facilities for bookmakers to carry on their business at the same location. While this may be reasonable when a tote is being operated at a racecourse it would not be practicable if the tote were extended to operate from offices on the high street or if tote facilities were to be made available at individual bookmakers' offices through some arrangement with those bookmakers.

The Authority will be able to apply to the Minister for Finance for a new tote licence based on different conditions which would allow for such developments and the intention is to facilitate the new Authority in this regard. This would have the potential for a significant improvement in revenue from tote profits. The amendment to the Totalisator Act, 1929, will remove the requirement to provide facilities for bookmakers where a tote is operated except at racecourses where the requirement will remain.

Section 12 empowers the Authority to make charges in respect of the carrying out of any of its functions or the provision of any services. Under section 43 the Authority may require the Racing Regulatory Body to collect fees, levies or charges on behalf of the Authority. This is a new and flexible possible source of funding. Charges could be set or amended or removed without the need to put elaborate arrangements in place. It would in particular allow the Authority a greater possibility of ensuring a fair and equitable distribution of the burden of the industry's costs, especially in regard to a part of the cost of racing services, and this is essentially the purpose behind this section.

This Bill also provides for a range of new controls in key areas. Section 26 requires that the Authority must approve the amount and form of prize money offered in respect of all races. This is not unreasonable given that the Authority will be making a significant contribution to the prize money fund and will, in effect, be the guarantor of that fund.

The allocation of fixtures and the setting of programmes are critical to the proper and effective running of the industry and have, of course, clear financial implications. These are not the only considerations involved here but it would be difficult to see how an Authority with overall responsibility for the industry would not also have the ultimate responsibility for the fixtures list. We are, therefore, providing that responsibility will indeed rest on the Authority but that it will be exercised through a fixtures committee constituted on similar lines to the committee that currently performs this function and which will operate on the basis of terms of reference laid down by the Authority.

In view of the important position of the governing bodies in this area and in particular the implications which are involved in regard to the provision of integrity services, the Racing Regulatory Body will have a major role in the decisions on fixtures and programmes.

Section 33 proposes to control starting price returns. All who are familiar with the racing scene appreciate the significance of getting starting prices that are broadly acceptable to all sections of the racing industry and ensuring the maintenance of integrity in this respect. Starting prices are used extensively by off-course bookmakers in setting the odds at which bets are paid. This section sets down a procedure by which we will maintain a situation, of having only one starting price returned in respect of any particular race and where those involved in setting the starting price would be approved by the Authority. This is not intended to interfere with arrangements whereby racecourses benefit from the revenue generated by starting price contracts but simply to ensure that this essential element in the running of racing is adequately controlled.

Section 53 deals with the regulation by the Authority of bookmakers on racecourses. The lifeblood of racing is the betting that takes place. In order to make racing attractive it is not sufficient simply to have quality racing at venues with good ancillary services. The betting facilities must also be good. One of the initiatives which is provided for under section 53 is the possible introduction of betting offices at racecourses. I realise that there are those who believe strongly that this would not be a positive move.

It is possible that the full range of betting services could be provided by an extension or development of the current system of on-course bookmaking at pitches. It may prove to be the case that in the long-term a combination of pitches and betting offices would be the best method of providing the service that the punter wants. In the final analysis this is something which will have to be decided by the Authority. This Bill allows the greatest possible flexibility in that regard but provides that in making regulations under this section the Authority may take into account agreements reached between the racecourses and bookmakers. In that context I will be asking the Authority to decide on this issue at an early date.

In future racecourses will be required to be authorised by the Authority. Previously the Racing Board had no legal function in this regard. The new Authority must be in a position to ensure, as far as practicable, that all racecourses provide appropriate facilities and services to carry on the business of horseracing and accommodate the race-going public in a safe and hospitable environment. New racecourses in particular should not be approved unless their facilities are of a proper standard. The provisions of section 59 will, I believe, satisfy this requirement.

Section 61 deals with broadcasting and filming rights. It allows the Authority some say in the transmission or relaying of any broadcast of a race fixture and this is necessary in my view in order to ensure that such broadcasting is always done in a way which is in the best interest of the industry as a whole.

I would like to draw the House's attention to two or three other provisions which in due course could prove to be significant. Section 35 would allow a subsidiary of the Authority to apply for a bookmakers licence. Under section 36, however, it would need the consent of the Ministers for Agriculture, Food and Forestry and Finance before it could establish such a subsidiary. The operation of bookmaker offices by a subsidiary of the Authority could prove to be the vehicle by which a new range of betting services could be introduced. It could also be a revenue booster for the Authority. However, the relevant provisions in the Bill are enabling ones and the whole area would require some detailed research and analysis before any ministerial consent, as provided for, could be given. I would also draw attention to the fact that joint ventures between subsidiaries of the Authority and other companies are provided for in section 36 and this could lead to some beneficial partnerships between the State and industry.

Part IX deals with the amendment of the licensing Acts. The area of liquor licences for racecourses has been cumbersome and restrictive up to now. Sunday racing has added to these problems as occasional licences are not allowed for Sundays. Greyhound racing has had its own special regime appropriate to its own needs since 1962. The changes proposed here for horseracing are similar to those that applied to greyhound racing over that time. If it is to retain its customer support, racing must be in a position to provide a comprehensive entertainment and leisure service. It is not surprising that we have to make special exemptions from Acts which, in fact, date back to 1833.

The provisions for State boards in relation to a code of ethics for the Authority and its staff and for ministerial control on pay, superannuation and borrowing are included in Part II. The dissolution of the Racing Board and the transfer of all its assets, liabilities and staff are provided for in Part X.

Some people have asked why we did not simply amend the 1945 and 1975 Acts. By explaining, in as brief a form as possible, the changes this Bill is providing for I have answered that question. By attempting to carry through so many basic changes by way of amendment to legislation which is almost 50 years old would have created a complicated and, in my view, inadequate legislative framework.

Matters relating to the composition of the Authority are dealt with in the Schedule. What is being proposed here is a State body. In this way the sectoral interests involved in the industry can be brought together and given the Authority necessary to control and manage the industry. The industry needs a sound framework, a suitable environment and some working capital and these are the ingredients provided by the State. The framework is not only the legislation, it also comprises the composition of the Authority. It is essential that a satisfactory balance is achieved which gives fair representation to all the interests involved in the sector.

I have spoken earlier about the important role played in this country by the Turf Club and National Hunt Steeplechase Committee. I am proposing to allot two places on the Authority to stewards of the Turf Club and one place to a steward of the National Hunt Steeplechase Committee. I will, in filling the remaining places, endeavour to achieve reasonable geographical balance, a gender balance and a general balance of the main interests involved.

For seven further places I am proposing a system of nominated panels from which we will choose the appointees. Organisations which are well known in the industry will nominate a panel of at least three persons to represent their interests. The racecourses, because of their pivotal role in the sector, will get two places. Breeders, owners, trainers, bookmakers and employees will each have one representative.

The State is making a major contribution to the financing of the racing industry and, as I said, it will continue to be a major contributor in the years to come. The Exchequer grant and levy revenue, which can be collected only because it is provided for in legislation, now account for about 60 per cent of the funding of Irish racing. In other words, the taxpayer is funding Irish racing to the tune of almost two-thirds. In these circumstances it is reasonable — indeed essential, that a number of the members be selected and appointed by the Minister. I propose that four out of the 14 be appointed in this way. They will, of course, be people involved in and-or interested in the industry but not necessarily representative of any one sector.

Card carrying members of Fianna Fáil.

One at least must be representative of horseracing in Northern Ireland. Ours is a 32 county industry and it is crucial that the composition of the Authority reflects that fact. Indeed, I will be asking the Authority to have particular regard to how the potential of the industry in Northern Ireland can be fully exploited.

This will be a 14 person Authority. The legislation provides that the Minister appoints the chairman from the 14 appointed members and that he or she will have a five year term of office. The ordinary members — other than the stewards, whose periods on the Authority will be coterminous with their period of office in the governing bodies — will remain for three years and will then be replaced on a rotational basis over the following two years. This will allow for continuity as well as gradual change.

The Authority will, of course, appoint its own chief executive and other staff, decide on its organisational structure and its headquarters. We will not be interfering in these areas in any way except to provide in the Bill that all existing employees of the Racing Board will be offered employment in the Authority or in one of its subsidiaries on similar terms to those that they currently enjoy.

In order to ensure that as much as possible of this personnel and organisational work can be done while the Bill is being processed in the Oireachtas, I intend to establish the Authority on an interim basis at an early date.

That is what I wish to say about the background to the Bill and its contents. Before concluding I should say that I intend to introduce some technical amendments to the Bill on Committee Stage. The main amendments I have in mind will cover three areas. Under section 39 I intend to delete subsection (d) which deals with the way in which Irish horseracing is represented at international events. This area has been, and can be, well covered without the need for legislative provision and I do not, therefore, propose to make such provision. I propose to allocate the function of licensing of racecourses to the Racing Regulatory Body under this section. They currently perform this function under the rules of racing and this should be recognised in the legislation.

Under section 41 I propose to amend the text to clarify the position in relation to the use of Revenue from funds collected by the Racing Regulatory Body. What we originally provided in the Bill was perhaps insufficiently precise. In the amendment we will provide that revenue from funds held by the Racing Regulatory Body on establishment day on behalf of owners and others licensed by the Racing Regulatory Body under the rules of racing and from all funds obtained in the future from its control activities, including implementing the rules and providing the integrity services, must be taken into account in determining its charges. This will, of course be a transparent exercise. We are not seeking to interfere in the use of funds held by the governing bodies as a private club or which will be earned by them in the future from activities other than those covered in this Bill.

I will be proposing an amendment to section 44 to require the Racing Regulatory Body to inform the Authority of changes in the rules of racing only rather than to consult with it before they could actually make these changes. The consultation was intended to be just that and did not suggest that the Authority could veto such changes. However, I am glad to clarify this by a revised text.

In conclusion, I acknowledge that this is in the main a representational body. To that extent and in, of course, other important ways, it is different from the Racing Board. This should add to its influence and Authority. It is important that it acts in a cohesive way in the best interests of racing. The members of the Authority, despite their mainly sectoral background, must see themselves, and act, as a board of directors for Irish racing. Membership extends to all the principal interests in the industry. The calibre of people appointed will underline the importance we attach to the Authority's work. All will be people deeply involved in, or extremely knowledgeable of, Irish racing. All will be committed supporters of its development. Bringing them together to constitute the Authority gives them a unique opportunity to oversee the running of the industry and to provide for its maximum development, but they can do this only if they act in a cohesive and unified way. A great responsibility rests on them but I am satisfied that they will fully discharge it.

Irish racing has always been fortunate in the quality of those who have come forward voluntarily to run its affairs. This is true of the members of the governing bodies down through the years, and, in particular, its stewards. It is equally true of those who have served on the Racing Board since 1945. They have worked diligently and successfully to develop our industry and a great debt of gratitude is due to them all.

The momentum for structural change in the industry came from these men and women in the industry who recognised that the lack of unified body exacerbated the problems facing them. As a result, the directors of the Racing Board and the stewards set up a joint working party under the chairmanship of Dr. Paddy Moriarty to identify the key areas to be addressed and outlines a possible new structure. The very valuable work by this group formed a basis from which an industry committee, established by me under the chairmanship of Michael Dowling, Secretary of my Department, worked to produce agreement on what was in effect a draft Bill to establish the new structure. The Bill now before us is largely the result of the agreement reached in that committee. While the Bill was being formally drafted, I set up an interim committee, composed of representatives of the governing bodies, the Racing Board and the Association of Irish Racecourses under the chairmanship of Denis Brosnan to recommend organisational structures and financial arrangements which will help the Authority to get off the ground quickly and commence its invaluable work without delay.

Inevitably, on occasions there were disagreements in these groups but they worked conscientiously to overcome these and, in the and, the whole process concluded with broad consensus which is reflected in the Bill. This work was invaluable and I thank the chairman — Paddy Moriarty, Michael Dowling and Denis Brosnan — and all the members of the groups for their unstinted efforts in signposting the way forward. The quality of all those involved and the time and effort they were prepared to put into this work are typical of the industry. I have no doubt that we will have a similar experience with those who agree to serve on the new Authority.

To reiterate briefly, the purpose of this Bill is to: establish an overall authority to manage, promote and develop Irish racing; put in place an updated and comprehensive legal framework for the industry; and give legal recognition to the work of the governing bodies in regard to the rules and integrity of racing. In association with the new legislation, the Government has greatly increased the level of its financial support to the industry and that support will be maintained. I commend the Bill to the House.

This Bill has been described as a blueprint for radical change in the industry. The new Horseracing Authority will take control from the Racing Board; the role of the governing bodies — the Turf Club and the Irish National Hunt Steeplechase Committee — will be to implement the rules of racing and provides services. Someone said recently that this Bill is gelding the Turf Club.

It is welcome that the Minister proposes to make a number of amendments which should be of help in meeting some of the objections raised and with which we will deal in more detail on Committee Stage.

The new Authority has been structured — extending the Government's appetite for political cronyism — to control and regulate racing to such an extent that the description of the Bill as nationalising racing fits comfortably. The Bill funks the real issue, that of funding. There is no reference to the consumer, the racegoer and punter. The Minister has held a carrot of almost £7 million out to a cash starved industry in case any of its individual components dare to criticise what he is trying to do. This adds up to blackmail; it is being implied that if they rock the boat they will get nothing. There is no vision or new ideas. The key recommendations of the Killanin commission have been ignored. There is grave disquiet throughout the industry about the Bill, which is hopelessly flawed.

It would be reasonable to assume from what I said that I see little right with the Bill but I concede that there is little room for argument about the need to reform the structure, organisation and financing of the industry which contributes up to 1 per cent of GDP and employs up to 30,000 people directly and in many linked industries. It is a flagship industry with a superb international reputation and is respected in every corner of the world. Our racecourses are the shop windows for our breeders, trainers and jockeys.

A board was set up under the 1945 Act to foster racing and breeding. Those who acted on that board did an excellent job without receiving any remuneration. Criticism was expressed about the role it played — its sins of omission rather than commission — it was not seen to be active in leading the industry towards the next century.

The Minister barely mentioned the evolution of this Bill but it is an interesting story from which much can be learned. The Bill is the pup of three committees. The Minister referred to the Moriarty committee. I have failed to discover what that committee recommended but I take the Minister's word that it did report. This was superseded by the Dowling committee which did excellent work and I have its report in front of me. As the Minister mentioned, it produced a draft Bill which received the broad support of the different components of the industry. It received far greater support than this Bill.

We need to analyse what happened between the time the Dowling committee produced its draft Bill and when this legislation went to print. If the Minister is insisting that this Bill is the product of the industry he can be transparent with us and tell us how it evolved and who recommended the changes in the draft Bill produced by the Dowling committee.

Neither were they recommended by the interim committee chaired by Denis Brosnan. I await the Minister's explanation.

It appears that those who could not get their way under the Dowling committee by fair means have done so under the Brosnan interim committee, although that committee did not overtly recommend any change. This is not an industry Bill and the Minister should not portray it as such. The Minister's intentions were good. He started by having the racing industry propose its own reform and modernisation. However, the Bill has been undemocratically hijacked by a select few and, with respect, the Minister appears to be the patsy in all of this.

The Dowling committee recommended that there be 13 members on the new Authority. There are to be 14 members. We await an explanation as to why the Minister increased the number from 13 to 14. Was it to ensure an extra political seat? He can be frank with me. I know how the system works and we exchange views on this quite regularly. Was it to ensure an extra political seat to keep the Coalition balance happy? Did the Minister have to look after his partners in Government? In a way I would prefer if he could tell me that that is why it happened. Though people outside this House do not like that kind of political cronyism, we know it is going on and that the Coalition Government are past masters at it, and we would at least understand the reason for the increase. Was it, perhaps, to protect the chairperson and ensure that the majority on the board supported his views? I do not know; I am repeating what is being said outside this House and in the industry. If we cannot be frank and honest in dealing with this major industry, we do it no justice. Why did the Minister increase the membership of the board from 13 to 14?

And give the chairman two votes as well.

That was the effect of it.

We await the Minister's explanation. He has always been fair and frank with us and I trust he will be so in replying on Second Stage.

There is also a view that a serious effort is being made in this Bill to do down all who have been involved in the governing of racing, but particularly the Turf Club. I may as well say it — I have been direct about other things that have been said outside this House — the Turf Club has had its quota of stuffed shirts. Let us call a spade a spade. There are those in the Turf Club whose accents grate on the nerves of some. Perhaps many of them represent a different time and a different world, but let us, and particularly the Minister, not be driven by prejudice or paranoia when it comes to legislation. The members of the Turf Club have done an excellent job in an honorary capacity for over 200 years. Their collective wisdom, experience, love and understanding of horses and horseracing will not be met anywhere else. I can assure the Minister that whoever is on the Authority when he finishes fixing the nominations, political and otherwise, it will be hard to match the collective wisdom of the people who have served the Turf Club and the Irish National Hunt Steeplechase Committee for all those years. Let us not allow prejudices to get in our way.

The Turf Club too recognises the need to modernise the racing industry. It must also look to its own internal structures, change its own systems, become more democratic and more transparent. Changes there must be, but not decimation. Much dirt and ashes are being raked over, and I urge the Minister not to allow this Bill, with his name on the back of it, to be used to settle old scores. The Minister knows what I am talking about; I do not have to spell it out.

Let us look to the Bill. I will concentrate on the areas of most controversy now and we can deal with the other detailed areas on Committee Stage. The Schedule indicates the composition of the Irish Horseracing Authority. I have already referred to the change that occurred between the Dowling committee report and the publishing of the Bill, even though it was never recommended by the Brosnan committee which superseded the Dowling committee. Will the Minister explain how and why that happened? When they set up their non-statutory body in the UK, which I believe is a great success, they did not try to nationalise horseracing. We are following the French — they are such a good example of how to run things. Will the Minister explain, why, in the UK, the industry can accept the nominated individual from each of the sectors of the industry to their board while he does not have the trust in the individual sectors of the racing industry here to accept their nominees?

I do not know what it is the Minister does not trust. Is he afraid that they will also be members of the Turf Club. Is he afraid they will all be male, that there will not be a woman among them, or is he afraid that they will all be female? Why can the Minister not trust the individual sectors who have regulated their component parts to the best of their ability?

There are many aspects of this Bill that I am unhappy about. I feel the Minister is being pushed and shoved and that undemocratic things are happening in the background. However, when it comes down to it, one of the few points I will be sticking on is the issue of the Minister's refusal to accept the nominations of the component parts of the industry, whether it is the breeders, the trainers or whoever. It would be a most effective authority if the Minister could trust the individual sectors to propose their own people for the seats on this authority. I invite the Minister to explain this nonsense of inviting a panel of at least three names so that the Minister can decide which of the three, four in the the case of breeders, will be selected to serve on this authority — I wonder who will be looking over his shoulder as he does it.

If what the Minister has said over the years about the knowledge and wisdom of people in the industry and the contribution made by the industry over the years is true, why should he feel that he is a better position to decide who should represent the Irish Thoroughbred Breeders on the new authority? Surely they should decide who represents them. If that representative of the breeders or of any other component part of the industry does a bad job, that representative can be moved sideways very quickly by the relevant body when the time comes to replace him. I urge the Minister to look at this point because if he wants the tag of political cronyism to destroy this new authority before it gets off the ground, he is going the right way about it. He has increased the number of political appointments. It is hoped that he will be able to explain the logic behind that, but let him not extend political control to the nominees of the component parts of the industry as well as to the four that he is taking to himself under this Bill. I hope the Minister understands the damage he will do to the industry if he politicises the authority to that extent. We will talk about the authority again on Committee Stage.

The other huge criticism is that the Minister funked it in regard to funding. Column inches have been written since the Bill appeared in print about section 27, which has been referred to in the media as clause 27. I can understand where the Minister is coming from in terms of the Parliamentary language used in section 27 and the sort of waffle that is involved in putting an enabling process in any Bill to allow moneys to be spent on the industry if that is the intention of the Minister of the day. Much time and effort and a great deal of wisdom has gone into funding racing in Ireland over the years. There have been several committees, particularly the Commission of Inquiry into the Thoroughbred Horse Breeding Industry under Lord Killanin, which published a report in July 1986. One of the key recommendations of that committee is as follows:

One of our main recommendations is that one-fifth of the taxes raised from off-course betting should be channelled back into the Irish racing industry. Ireland is the only one of the major racing countries where racing does not benefit from the proceeds of betting off-course.

This is all the more serious given that we do not know whether a future Government will be favourably disposed towards Irish racing — we cannot read too far down the line politically — and that we will be one of the few countries that does not fund its racing industry from a levy on off-course betting. I think I know why the Minister funked it on this one, but it would be unfair to say it. If he wants to make a name for himself as a major reformer of the racing industry here he should decide that funding will be provided from a levy on off-course betting, one-fifth of which would generate approximately £7 million this year. That is close to the figure the Minister promised the industry. He should put a mechanism in place that will guarantee the industry annual funding without having to resort to the budget or the Finance Bill every year. If off-course betting is reduced because the punter is not satisfied, or if there is a recession or downfall in the industry, the amount of money going into the industry will be reduced. It would be up to the industry and those organising racing to ensure that value is given to the punter to guarantee buoyancy in the take from off-course betting tax.

We cannot be right and every other country wrong in this regard. All other countries have moved towards a levy on off-course betting to fund racing. However, despite the collective wisdom of the industry here, who claim this is the right way to proceed and a commission of inquiry which examined all the options, the Minister will not go down that road. The lack of vision in this Bill is underlined by the fact that the Minister refused to make that critical move in terms of funding the industry although that is what the industry wants. The Minister talked about the Bill being industry driven. Who in the industry does not support a percentage of the off-course betting tax being provided on an annual basis to fund the industry?

The crucial problem in the industry is a lack of funding. As a result of the reduction in on-course betting, the lack of funding going back into the system for the maintenance of our racecourses, prize money and so on is causing great difficulties. The industry is in danger of spiralling downwards unless something is done to stop the freefall. Why did the Minister funk it? Why will he not, even at this stage, consider an amendment? I ask him not to let the mandarins in the Department of Finance dictate to him. We are the politicians, they have a job to do and so have we. The legislation in respect of the former employees of Irish Shipping Limited, which passed through the House this morning, is an indication of politicians doing something even though the mandarins in the Department of Finance do not want it. There are precedents for this. We, as elected members of Parliament, and the Minister, as a member of the Government, should govern. He should show his strength on this issue rather than allow the permanent government dictate. It has a job to do and I respect that. It is doing what it believes it should do, but I ask the Minister to play the politician in this case and in doing so he will do what is right for the Irish horseracing industry.

Given his commitment to the industry and his wisdom and knowledge, Lord Killanin's views on this Bill deserve to put on the record of the House. An article in The Irish Field of 16 April describes section 27 as spineless with no firm commitment to the financing of the industry. I accept that article was drafted by officials of the Department of Finance who would not allow the Minister have his way. However, that is cold comfort for those who want successful reform of the industry. In regard to the Bill, Lord Killanin stated:

It is to me inconceivable that anyone can think that one of Ireland's great natural industries of the highest international repute can plan its economic future on such a weak premise.

The premise to which he referred was section 27. He went on to indicate that the Bill is "hopelessly flawed".

Will the Minister examine section 27 before Committee Stage? He should be his own man in this regard and do what the industry wants. If this is an industry-driven Bill, the Minister should amend it in a way that is crucial to its success, which involves funding the industry from a percentage of the off-course betting levy. Out of a total of £350 million and with a tax-take of £35 million, 20 per cent of the levy on off-course betting would amount to approximately £7 million. The Minister should put this formula in place so that we will not have to come back here to debate the matter.

There are a few other questions to which I did not find answers in the Bill. When the new Authority takes over and the regulatory authority is gelded, making it relatively ineffective, who will be responsible for licensing and trainers? I do not see reference to that in the Bill. That area needs further clarification. As the Minister is nationalising and regulating all other aspects of the industry, he might as well tell us what he has in mind for this section so that we will not meet a surprise down the road.

I am curious as to how the Northern Ireland racing interests will respond to this Bill. They respected the authority and direction of our Turf Club which was a voluntary and private organisation, but I am not sure what their position will be now with a State authority here assuming it can direct the two race courses in the North as to their fixtures, prize money, charges to bookmakers for their pitches, changes in SP and so on. I am not sure if the members of the racing industry in the North, with whom we have always enjoyed an excellent relationship under the present structure, will accept the new structure. There are sensitivities in that regard which need to be spelt out. I would appreciate if the Minister would tell the House the negotiations that have taken place in this regard and the commitments he has received from the Northern Ireland racing interests that they are agreeable to take direction from the new Authority so that this will not cause difficulties in the future. It would be regrettable if the excellent relationship that exists between the two regions was jeopardised in any way, which could happen because of a lack of consultation or sensitivity towards the position of racing interests in the North. Perhaps we could head off any difficulties which might arise in that regard.

The detail of the Bill will have to be dealt with on Committee Stage. There is a lack of direct consumer representation —racegoers and punters—on the Authority. The Racing Club of Ireland is the only body which represents their interests. I accept that it may not represent the interests of all racegoers and punters, but it has done excellent work for a number of years. The Minister assured them in a vague manner in a reply to a Parliamentary Question that they will be looked after. Will he explain how he intends to look after their interests on the new Authority?

While a Fianna Fáil racegoer may be one of the four, that will not be accepted as representing the interests of consumers. Will the Minister move the issue one step away from political cronyism and accept the independent nomination of the Racing Club of Ireland as representing the interests of the consumer in this area? Without the consumer being satisfied with racing, the ancillary services, the punting facilities on race courses and so on, racing will not improve here. Most legislation nowadays is driven by the desire to satisfy consumers. There is little effort in this Bill to satisfy the consumer — the racegoer and punter. Will the Minister accept the nomination of a representative of the Racing Club of Ireland on this new Authority?

The industry employs 30,000, others would say it employs 40,000 when account is taken of indirect services related to it. The industry provides 20,000 full-time jobs and probably as many part-time jobs making a total of 40,000. It is comprised of breeders, owners, trainers and their respective staffs, racecourse staff including those employed in catering and ancillary services, on course and off-course bookmakers, staff who operate the tote, racecard printers, sales personnel at Goffs and Tatterstalls and around the country. It also includes vets, farriers, jockeys, not forgetting the unsung heroes and heroines who ride out every day in all weathers which is separate from their racecourse duties, saddlers, feed merchants, manufacturers of racing colours and those involved in structural services and capital investment on racecourses, stable yards and stud farms. The list of interested people in this legislation is endless, because their present and future depend on the Minister getting matters right.

Contrary to what the Minister said, the row raging throughout the industry has bonded it as never before. It has managed to bond an industry whose component parts have always had a natural suspicion of one another. That is an incredible achievement. I urge the Minister to revert to the Dowling proposals for the legislation to allow direct election by the component bodies to the new Authority, not a political selection from a panel of at least three as required by the Minister. He should ensure the future of this great industry by putting in place a funding mechanism to link funding of our racing industry to off-course betting.

I look forward to Committee Stage. I dislike an awful lot in the Bill, but I will not oppose it because I recognise the need for modernisation in respect of the financing, structures and organisation of racing. Those who want to see it succeed, expand and to continue as a flagship industry want the Minister to get this right. There will be many difficulties on Committee Stage if some problems cannot be resolved. I have great faith in the Minister listening to the concerns of the Opposition. He has shown he will be prepared to amend the Bill by way of his proposed amendments, but I am sure he will be prepared to go a little further to ensure it will be one of which we can all be proud.

I welcome the opportunity to contribute to the Bill as it is an important one, but I do not welcome it. I have serious reservations about it. Unlike Deputy Doyle, who also has reservations. I am disposed to oppose it because its approach is fundamentally wrong. Unless the Minister satisfies me in his reply I propose to vote against it.

The Minister has given the impression that the country is cheering the introduction of the Bill and that those interested in the industry are delighted. The contrary is the case, most people are opposed to it and many are horrified by it.

The difficulties in the racing industry and the closely related breeding industry were recognised in the mid 1980s when the then Government set up a commission under Lord Killanin. The Killanin report is generally regarded by most who have considered it as worthy and worthwhile. It was set up around 1982 and the report was produced several years later — with good reason because great care was taken with it and extensive studies were made of successful arrangements in other countries. For that reason what I say about the Bill or any consideration of it by this House should be prefaced by noting what Lord Killanin said. He is as well qualified as anyone to comment on it. He has no personal axe to grind, knows more about the industry than anyone else and is better informed as to what is needed. He is — whether we like it or not and I am sure some do not — the most successful Irish sporting administrator this century by virtue of the office he held internationally for such a long time.

A letter by Lord Killanin published in The Irish Times on 19 March 1994 states:

Sir, — Unfortunately those responsible for drafting the Irish Horseracing Industry Bill 1994 have patently failed to study or understand the findings of the Commission of Inquiry into the Thoroughbred Horsebreeding Industry — the so-called Killanin Commission. I would like it known that I disagree totally with the content and direction of this proposed Bill. It has been produced too rapidly, without enough thought given to detail and too little discussion with those deeply involved in the two industries—racing and breeding.

It is a hopelessly flawed document. How is it possible that in all its 42 pages there is not one mention of the "off-track" betting industry? Without a marriage to the betting outlets in the main streets, racing in Ireland will continue its downward trajectory.

The real breakpoint comes in clause 27.

He quotes the section and continues:

It is to me inconceivable that anyone can think that one of Ireland's great natural industries, of the highest international repute, can plan its economic future on such a weak premise.

The Killanin Commission was criticised by some for progressing too slowly — I would criticise the authors of this Green Paper [I assume he means the Bill] as moving too fast and too carelessly. I would urge them to think again, for if this Bill is passed into law in its present form, irreparable damage will have been done to the thoroughbred industry. —

Yours, etc.,

LORD KILLANIN,

St. Annin's,

Spiddal,

Co. Galway.

I agree with Lord Killanin. On reading the Bill one is struck that whereas the Racing Board of 1945 was a semi-State body and exercised certain controls, the proposed Irish horse racing Authority will be all-enveloping. The proposed Authority will not be the "Racing Board Mark 2" as some commentators have referred to it, it will be the "Racing Board to the Power of 2". Its powers will be more widespread, enveloping and extensive. On reading the Bill one will see how often the words "the Minister" are used, such as "the Minister must approve of this", "the Minister appoints that" and "the Minister must be satisfied about this". The Minister is involved in every aspect of the Bill and included in nearly every section. He seems to want to have his finger on everything that happens. The proposed Authority will be a State board in the ultimate sense and is not just nationalisation in the sense of ownership, it is nationalisation in the sense of an activity which of its nature should be controlled by those who participate in it.

Debate adjourned.
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