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The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
It is a pleasure to serve under your chairmanship, Mr Hosie. I thank my right hon. Friend the Member for West Suffolk (Matt Hancock) for securing this important and timely debate, and I appreciate his support for horse racing not only in his constituency but across Britain.
The Government acknowledge the significant contribution that racing makes to our economy. As has been rightly mentioned by Members from constituencies across the country, it plays a central role in the livelihoods of many people in our rural communities. The employment that it supports across racecourses, training yards, breeding operations and related sectors reflects a powerhouse industry that is respected at home and abroad, and it is one that I am keen to explore even further through a forthcoming visit to a training yard. We absolutely agree that British racing is a substantial asset to the country and remain committed to supporting the industry.
As many Members have said, horse racing is the second biggest sport in the UK in terms of attendance and contributes £4 billion annually to the economy in direct, indirect and associated expenditure. The fact that so many people go to the great races—some 65,000 to 70,000 to the grand national, and 200,000 over the four days of the Cheltenham festival—shows how important it is. I have seen that at first hand during my visit to Newmarket this summer and in discussions with the Jockey Club and Arena Racing Company, as well as the measures around welfare, which were particularly interesting to see in Newmarket. The industry enjoys a reputation as a global leader and is part of the GREAT campaign, which recognises that horse racing is a valuable asset and has a tremendous amount of soft power.
My hon. Friends have noted the importance of the levy. As has been said, in 2017, the levy was extended to online bookmakers and fixed at the rate of 10%, so that it no longer had to be negotiated each year. That has seen a significant rise—almost doubling in amount from £49 million to £95 million—and the forecast for 2022-23 is around £100 million.
On the horserace betting review, the British Horseracing Authority has presented its case that there is a significant gap in its funding that means that it cannot compete with jurisdictions such as France and Ireland. The authority has submitted suggestions on how to close the gap, and we are considering those proposals as we undertake our review, which is due by April next year. Of course, I cannot pre-empt the outcome of that at this stage, but I reassure all colleagues that the decision will be firmly based on the evidence.
Changes would require legislation, so a sensible first step is to explore a voluntary agreement, especially when there are so many competing demands on parliamentary time. We are looking at all options and encouraging racing and betting to work together in the best interests of the sport. Reaching a mutual agreement on the way forward for the levy would be beneficial for everybody. To support that aim, the BHA and the BGC were invited to submit evidence over the summer and have been given extensions to come to an agreement. I met both groups in early September for an update on the discussions, and I look forward to hearing more from them when I meet them again in the next few weeks.
The levy is not the only source of funding for racing. It represented just 6% of racing’s total income in ’22, and far greater proportions were earned from owners, breeders, racegoers, media rights deals and sponsorship. While we review what the levy provides, we have also asked racing and betting to explore jointly how they can maximise other sources of income for racing. I am encouraged by the close engagement that has taken place and welcome the recent changes to the fixture list, which should bring an additional £90 million to racing by 2028.
The BHA and other industry stakeholders have raised concerns about the impact of the financial risk checks that were set out in the Government’s White Paper in April. As the darling of the Racing Post, as I seem to be these days, I want to reassure everyone that I have heard those concerns and take them very seriously. I have already met many Members who are present today, including members of the all-party parliamentary group on racing and bloodstock, and we have many more meetings to come. Given that the constituency of my hon. Friend the Member for Shipley (Philip Davies) is next door to mine, I cannot avoid him, as much as I may try, but I commit to those meetings carrying on long after the consultations have been completed.
Philip Davies
Given that the right hon. Member for West Suffolk (Matt Hancock) and I actually agree on this issue, which does not happen very often, does the Minister accept that we really must be on to something?
Stuart Andrew
If only I could have achieved that when I was the deputy Chief Whip—that would have been great, but there we go.
I have also met with horse racing bettor forums to hear about this from a customer’s perspective, which is incredibly important, and I will continue to engage with all those stakeholders. Let me also take this opportunity to address a couple of important points. The first is to distinguish between the checks that many operators are currently doing and the future system that was set out in the White Paper. At present, the Gambling Commission has not set specific thresholds or requirements for how or when operators must consider customers’ financial circumstances. There has only been an ask to prevent a repetition of the cases in which operators allow rapid losses that would be life-changing for most of us. However, that has led to inconsistency across the sector, with different operators seeking proofs at different points, often in the form of onerous documentation such as payslips and bank statements. We also know that many operators are requesting personal financial information for a range of reasons that are not necessarily related to safer gambling. I have heard concerning reports that some operators are using checks as a way of restricting the accounts of successful bettors. As a result of listening to all of this, I have spoken to the Gambling Commission CEO about these issues. I asked him to challenge operators to be more transparent with customers and more consistent in how they apply the checks now. They are looking at that and I am waiting to hear back in the coming weeks.
My focus is also on the new coherent national framework underpinned by data sharing, which was outlined in the White Paper and the consultation. We want it to be a significant improvement for customers and companies, to have clear requirements and a much smoother process for assessments, and crucially to bring uniformity rather than the process that people are seeing now and which has been described by Members here today. It will ensure that we see no more of those terrible cases where people lose tens of thousands of pounds in a very short time. As the Minister for gambling, I have also had to hear the awful stories that families have raised with me, and it is right that we act in that area.
I agree with many Members who have pointed out the need to be proportionate. The White Paper was clear: we only want checks for those most at risk of harm. We want the checks themselves to be painless for the overwhelming majority of customers, and neither the Government nor the Gambling Commission should put a blanket cap on how much money people spend on gambling. That will be at the forefront of our minds. The point about being frictionless is essential. I reiterate my commitment that proposed checks will not be mandated across the sector until we are confident that they are frictionless for the vast majority of customers who will be caught by them. The Gambling Commission will continue to work closely with gambling operators, the financial services sector and the Information Commissioner’s Office to develop the checks. We are also exploring options such as pilots and phased implementation. I am pleased that the Gambling Commission has agreed to host a series of workshops with the industry to explore these in detail.
It is important that the wider public have their say too. It is great that the Gambling Commission’s recent consultation received over 3,500 responses, many of which focused on financial risk checks and the relationship with racing. The regulator is working hard to analyse those responses and, notwithstanding its statutory independence, we will continue to work closely with it as it refines proposals before introducing new requirements. The consultation was on all aspects and all details, including the levels at which those checks will come in and how we consider the previous winnings.
The Government are keen to ensure that measures such as these checks do not adversely affect racing or interrupt the customer journey. They also cannot push away high-net-worth individuals such as owners and trainers who invest in the sport. We want to protect those at risk of harm, but with minimal disruption to the majority who, I recognise, place bets on horseracing with no ill effect. I also want to point out that the proposals the Commission are consulting on will apply only to online gambling accounts; they will not affect betting shops or on-course bookmakers.
On the point made by my right hon. Friend the Member for West Suffolk about the workforce, the Migration Advisory Committee has recommended adding six racing roles to the shortage occupation list. That recommendation is currently being considered by the Home Office, but I will ensure that I write to my colleagues there to highlight this debate.
The Government remain committed to supporting horseracing in this country. It is vital to the rural economy and a source of great pleasure to many people. I look forward to further discussions on these important issues, especially as the review of the levy continues.
Stewart Hosie (in the Chair)
I call Matt Hancock, for the briefest of wind-ups.