Spur Man,
You are correct, the 7lbs extra is allotted for the horses win last time out, it is awarded beacuse its running before the next set of handicap ratings have been published. Handicap marks or ratings are changed each week on a Tuesday for the Sat/Sun period previous. Basically if a horse runs within a week of winning the handicapper hasnt had chance to reasess the horse so its given a penalty for its improvement.
Full article here but copied the bit you may want aswell.
http://www.britishhorseracing.com/in...ndicapping.asp Penalties
There are occasions when a horse will win a race after the weights for a future race the horse is entered to run in, have been allotted. In these cases a horse will be given a penalty for the up-coming race to take into account the improvement in the horse’s performance, which is not yet officially recognised due to the ratings only being updated weekly.
Might be of interest to some, found an interactive Racing Post racecard which explains lots of stuff to beginners, just hover the mouse over the card and the explanation is at the bottom.
http://www.pi.pwp.blueyonder.co.uk/test/RPcard.html