The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Chris Philp)
I thank the hon. Members who have joined this evening’s Adjournment debate.
I thank my right hon. Friend the Member for West Suffolk (Matt Hancock) for securing and initiating this debate and, indeed, for advocating on behalf of his local industry with such passion and evident tenacity, which I look forward to experiencing again. I am informed by the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), that not only is he willing to accept that invitation to Newmarket but he has already scheduled a trip to Newmarket next week, when he will be meeting members of the horse racing fraternity and, I hope, my right hon. Friend the Member for West Suffolk. Diary permitting, I would be delighted to follow in his footsteps at a later time.
My right hon. Friend is right to highlight the vital contribution of racing to the economy not just in his constituency, where Newmarket and its supporting infrastructure is such a significant employer, but throughout the United Kingdom. As he rightly says, horse racing is the second largest sport in the UK by attendance, employment and annual revenue. According to its governing body, the British Horseracing Authority, racing is worth over £4 billion per annum to the economy in direct, indirect and associated expenditure, much of which is focused on rural areas.
More than 20,000 people are directly employed across 59 licensed racecourses, hundreds of training yards and thousands of breeding operations. As my right hon. Friend said, tens of thousands of additional jobs are supported in the wider rural economy through the supply chain and all the sectors he outlined during his excellent speech. I also agree entirely with the points he made about horse racing’s contribution to the UK’s soft power. Clearly, people from around the world come to the UK to participate and watch our fantastic horse racing meets, and to invest here in stud farms and horse racing yards directly as well. So racing significantly adds to the UK’s international prestige and our global leadership in this industry is something we should cherish and certainly be preserving.
The horse-race betting levy, the topic of my right hon. Friend’s speech, was of course introduced more than 50 years ago, in the 1960s, when the betting industry was somewhat deregulated and placing bets away from racecourses was permitted. At the time, there were fears that people would leave the racecourses and bet on the high street, and the levy was introduced to try to mitigate that risk. Thankfully, over those past 50 or 60 years racing has proved enduringly popular, despite the concerns articulated back in the 1960s. Nothing better illustrates its enduring popularity than the vibrancy of its recovery as we have returned to normal after covid and restrictions on flagship meetings were removed. I understand that attendance at the recent Qatar Goodwood festival this year was close to the figures in 2019, which is fantastic news. Racing was the first sport to return, behind closed doors, after the first national lockdown—I wonder whether my right hon. Friend’s hand may have been behind that move, in some way, in June last year. I am pleased that horse racing has continued without interruption since then. The fact that it has been able to return so swiftly is thanks in no small part to the British Horseracing Authority to incorporate covid measures into the already meticulous protocols.
John Spellar
I congratulate the Minister on his appointment. He referred to the outdated view that the interests of bookmakers on the high street, regulated and onshore, were somehow in conflict with those of the racecourses. Should we not, as the right hon. Member for West Suffolk indicated, actually see them in a symbiotic relationship, as part of the same ecosystem, supporting each other?
Chris Philp
I was referring to the fears articulated during the 1960s, which of course have subsequently proven not to have come to pass, as the right hon. Gentleman has just said. The horse racing levy is a direct expression of the symbiosis that he refers to: the support that that two industries give one another. The one would certainly be weaker without the other, so I entirely agree with what he just said.
I also wish to reflect on the support that has been provided to racing during the pandemic, which my right hon. Friend referred to. Of course, horse racing has benefited from the economy-wide support that all businesses have received—the rates relief and the support on jobs, through things such as the furlough scheme, which have been provided by the taxpayer. In addition, the horse racing industry, by way of the Horserace Betting Levy Board and The Racing Foundation has also received £28 million in terms of cash flow and hardship support, and £20 million of levy funds were aimed at supporting racecourses, with £8 million from the foundation supporting individuals in the sector. So the sector has received substantial support not only generally, but specifically. Since then, the HBLB has agreed to make additional contributions to prize money until the end of December, which will help to mitigate the lower amounts made available by courses due to covid—this partly addresses the concern that my right hon. Friend raised a little earlier.
As my right hon. Friend said, racecourses are also accessing support through the sports survival package, organised by the sport Minister, the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire, where a £21.5 million loan has been made to the HBLB to enable it to provide extra. The HBLB has earmarked £15 million of that to be distributed via prize money this year, 2021, keeping a further £6.5 million in reserve for 2022. Of course, it has not been a one-way street, because horse racing has given back. It has donated £2.6 million to NHS charities from betting on the grand national, and a great deal of voluntary work has been done as well. I pay tribute to the horse racing industry’s contribution to our country during this time of crisis.
Given that time is pressing, let me address directly some of the requests my right hon. Friend made in his excellent speech. On a review of the horserace betting levy, it was of course reviewed relatively recently in 2017, when my right hon. Friend was a Minister in the Department, albeit not directly responsible for this policy area. In that review, the Government fixed the levy at 10% of bookmakers’ gross profits, to avoid annual negotiations, and based the levy on gross gambling yield—in effect, the gross profit—rather than turnover, so that there was a certain amount of risk-sharing between the gambling industry and the horse racing industry. One could conceive of circumstances in which, for some reason—unexpected events—the gambling yield might go down. That would clearly affect both parts of the sector, which are symbiotic, rather than falling wholly on the shoulders of the gambling industry, which is why the levy was originally constructed in that way.
A review is due to take place in three years’ time, in 2024. I am of course willing to listen to detailed representations if there is a case for looking at it again sooner. I think that the measures that I have set out addressed the issues in respect of covid, but if there are particular reasons why a review ought to be considered sooner, I would be happy to look at detailed representations from either my right hon. Friend or the industry, and I would consider them carefully. Having been appointed only a week ago, almost to the hour, I do not want to race to make any commitments in this policy area, but I will of course listen carefully.
Mr Laurence Robertson
I welcome the Minister to his new role. On the wider gambling review, will he confirm that it will remain the Government’s policy to ensure that it is evidence-based and evidence-led?
Chris Philp
I like to think that all the Government’s policy making is evidence-led and evidence-based. The review will be conducted in a thoughtful way, with full engagement and consultation with Members who have an interest, some of whom I see in the Chamber, as well as with the industry and other stakeholders.
It is worth saying that the 2017 reforms exceeded expectations and doubled the amount of levy collected, up to £95 million in 2018. Even during the difficult year we had last year—the year running to March 2021—the levy still collected £80 million, which was substantially in excess of the amount collected before the reforms. The levy has not only exceeded expectations but proved remarkably resilient even during the difficult circumstances of the past year.
My right hon. Friend raised an interesting question about international horse racing. It is worth recalling that the original rationale for the construction of the levy as it is dates back to those 1960s concerns, which it turns out were largely unfounded, that high street betting would in some way detract from on-course betting. The levy was therefore constructed in relation to UK-based horse racing because people were worried about horse racing on UK courses. There is, then, a rationale for why the levy has developed in the way it has. To make the change my right hon. Friend proposed would be outside the originally constructed purpose. We are, though, always willing—and as a new Minister, I am particularly willing—to listen and to consider new evidence as it arises. I would be happy to study any detailed submissions that make the case advanced by my right hon. Friend and give them careful consideration, because this is a Government who listen and who consider evidence, as alluded to by my hon. Friend the Member for Tewkesbury (Mr Robertson) a few moments ago.
I can see that the hour of the final Adjournment prior to the conference recess is almost upon us, so let me conclude by saying how strongly this Government support the horse racing industry and everything that it does: the jobs that it creates; and the addition that it makes to our national prestige. We will always engage constructively and in detail on topics such as this in a way that it is not really possible to do in a half-hour debate, but there is a lot of detail that I am sure we can discuss later. It serves our national interests and the interests of all our constituents to have a vibrant and successful horse racing industry. My colleagues and I look forward to working with Members across the House to ensure that that remains case for many, many decades to come.
Question put and agreed to.