Horse Racing Levy

Debate between Baroness McIntosh of Pickering and Justin Tomlinson

Thursday 20th January 2011 Commons Chamber

[Miss McIntosh]

My hon. Friend’s horses are obviously in the right place. I can imagine no better place than North Yorkshire in which to train them, and I hope that that is reflected in their success.

I do not know whether time will permit me to deal with betting shops. Small independent betting shops and chains of betting shops obviously exist in market towns such as Thirsk, Malton, Filey and Easingwold in an average constituency such as mine, but they have alternative means of making a living. They increasingly provide one-armed bandits and other forms of betting, not least on the outcomes of political elections.

[Justin Tomlinson]

I met an independent bookmaker who is responsible for 11 bookmakers, including some in my constituency. The changes to the threshold rules might mean an increase of 78% in their levy contributions. A lot of extra alternative sources of income would have to be found to allow that business to remain viable.

[Miss McIntosh]

I am grateful to my hon. Friend for making that point, and perhaps I should say that trainers are struggling financially, rather than that they are in severe financial straits. This is also about the ability of trainers, on an ongoing basis, to sell their wares and persuade the horse owners to stay with the industry, which obviously they love, rather than investing in other areas. Nobody has yet focused on feeding costs, which are putting up the cost of training the horses. The reduction in prize money has been mentioned and I hope that the Minister will address it. I also add that trainers are major employers in rural areas and their businesses support countless other businesses in rural communities, as the hon. Member for South Down (Ms Ritchie) mentioned, so it is vital that they are seen to have a fair return on that.

I welcome the fact that this debate has touched on the importance of racing to the fabric of rural life—to the economic, social and cultural way of life in the countryside—which is particularly true in North Yorkshire. Yorkshire boasts some of the finest racecourses in the country, not least those at Thirsk and neighbouring Wetherby and York. Like all the other 60 racecourses, the one at Thirsk plays a vital role in the local economy, providing employment not only for its staff, but for trainers, jockeys, stable lads and lasses, farriers, vets and breeders. Malton is an internationally renowned racehorse training centre and, along with Thirsk, is home to some of the country’s top racehorse trainers. As I have mentioned, more than 30 trainers are based in just one constituency.

The hon. Member for Bradford South (Mr Sutcliffe) used to be the Minister responsible for this subject, but I put this question to the current Minister: is it possible to replace the levy by a £1 per shop race fee to raise £90 million per year? The right hon. Member for Bath (Mr Foster) made a serious point. I was an intern, as we now call such people—they were rather glamorously called “stagiaires” when I was one—in the Directorate General for Competition for some six months. I understand that for a levy to count as state aid it would have to be shown that there was a direct subsidy to an industry in one member state and thus a disadvantaging of industries in other member states. The right hon. Gentleman and others told us that levies were being sought in other countries as well, so I hope our case will be put, including by some of our powerful colleagues on both sides of the other House who will be able to advise us in this regard. I do not have much sympathy with the argument that the proposed changes to the levy are state aid or would distort trade between member states. I take some comfort from the fact that all of us who take an interest in the industry can reach out to the industry in other member states, using our good offices to make these points to the Commission.

My second plea to the Minister, which other hon. Members have also made, is to keep the Tote within racing. I pay tribute to the previous Government’s acknowledgement of the vital importance of racing, which is undermined by the arguments about state aid. I have addressed that matter and I hope that we can take it forward.

The third point I wish to make to the Minister relates to a proposal to close all the loopholes being exploited by bookmakers and the betting exchanges in order to raise £60 million a year via a percentage deduction transaction fee on all bets on the exchanges. As I said, I represent a host of betting shops and I take some comfort from the fact that the manager of one of them has written to me in the context of this debate. He said:

“The current issues facing the Horserace Betting Levy are less to do with the total amount generated by the levy and more to do with how it, and other income streams, are distributed within Racing.”

That issue has to be addressed. He continued by saying:

“I…support the ‘minimum tariffs’ initiative recently announced by the Horsemen’s Group”.

I wish to place on the record my tribute to the work of that organisation and its pan-industry view, and I hope that its voice will be heard on this matter.

I do not believe that a positive way to bring the industry together is by thinking that the trainers, racehorse owners and all those employed in the industry are on one side, and the betting shops and gamblers are on the other. The danger to the system—this is the challenge the Minister will face—is the offshore aspect, to which my hon. Friend the Member for West Suffolk referred. Addressing that situation is the purpose of today’s debate.

I conclude by saying that all hon. Members who have racecourses and the racing industry represented as strongly in their constituency as I do in mine benefit from such a committed industry. I wish to pay tribute to the fact that racecourses attract enormous amounts of tourism; small racecourses such as Thirsk’s are very attractive. Obviously it meets mostly in the summer months—we avoid the winter months—when the evening meetings are particularly well subscribed, as are the weekend meetings. I also wish to lend my support to point-to-pointing, which has an enormous attraction in rural communities and allows amateur jockeys to benefit. I invite the Minister to recognise the all-pervasive nature, in a very positive sense, of the racing industry. I understand the particularly difficult position that he is in, but I hope that, through him, we can avail ourselves of the good offices of the Secretary of State to make the case in the strongest way to the European Commission and to ensure that all aspects of the racing and gambling industry have a vibrant long-term future.