Politicians prepare to oppose government over levy replacement

The government's plans for replacing the levy will not go through parliament unopposed after two politicians from either side of the political divide voiced their opposition to the scheme.

Labour peer Lord Lipsey and Conservative MP Philip Davies said while they supported the aim of offshore betting contributing to the sport, they did not believe it should be done through a levy and were "ready to challenge" the legislation needed to implement it.

The government has said it does not need primary legislation to replace the levy and will introduce a statutory instrument to enact the necessary changes, while later in the year it will lay a legislative reform order to effect the transfer of the Levy Board's responsibilities to the Gambling Commission and Racing Authority.

However Lipsey, a former Tote board member and one-time chairman of the British Greyhound Racing Board, told the Racing Post: "There are two Becher's Brooks in the form of these orders between the government and the winning line and it's very likely they will fall at one of them."

In a joint statement, Lipsey and Davies said they were "strong supporters" of racing.

They added: "We therefore share the government’s aim of ensuring offshore betting on British racing contributes financially to its success.

Lord Lipsey: 'This is an objective best served by commercial arrangement'Credit: Steve Nash

"We believe, however, this is an objective best secured by a commercial arrangement between betting and racing, rather than by a compulsory state-imposed levy. It is not part of the role of the state to pick the pockets of poor punters to fill up the bank accounts of rich racehorse owners.

"We are therefore not able to support the extension of the levy offshore, as proposed by the government to take effect from April 1, 2017. Nor are we supportive of the new ten per cent levy rate contemplated by government."

Lipsey and Davies also raised doubts over whether the government plan would receive approval under European state aid rules.

They said: "We believe that, while Britain remains in the EU, any change to the levy will be vulnerable to challenge in the European courts as state aid.

"We can imagine few worse outcomes for British racing than for it to gain extra funding through the government’s proposal, only for it to be subsequently removed as a result of a verdict by the European courts.

Phillip Davies MP: 'It would surely make more sense to wait until Brexit is complete'Credit: National Pictures / Nick Edwards

"Even if a change was contemplated, it would surely make more sense to wait until Brexit is complete."

Lipsey and Davies also criticised the government's plans to introduce the new system and, later this year, abolish the Levy Board and empower the Gambling Commission to take over its collection function while creating a new racing authority to distribute funds, as "not sound".

They went on: "We doubt if parliament will sit idly by and allow it to shortcut parliament’s role in this way.

"Certainly we stand ready to challenge any secondary legislation designed to implement the government’s ill-conceived policy."

Bringing those firms based offshore who do not currently contribute to the sport’s funding system into the levy net is expected to raise an extra £30-40 million a year for British racing’s finances.