Offshore Gambling Bill
Debate between Baroness McIntosh of Pickering and Philip Davies(11 years, 10 months ago)
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Miss Anne McIntosh (Thirsk and Malton) (Con)
I beg to move, That the Bill be now read a Second time.
I am delighted to present the Bill on behalf my hon. Friend the Member for West Suffolk (Matthew Hancock). As one of its early sponsors, I want to take this opportunity to pay tribute to him for initiating it and thank him for his excellent work, which has stood us all in good stead. I am pleased to be taking the Bill forward today with his support and I congratulate him on his preferment and the excellent work he is doing as the Minister responsible for skills and apprenticeships. It is already bearing fruit, bringing extra apprenticeships to my constituency of Thirsk, Malton and Filey.
The Bill aims to amend the Gambling Act 2005 to regulate remote gambling on a point of consumption basis; to require all operators selling into the British market, whether in the United Kingdom or overseas, to hold a Gambling Commission licence to enable them to undertake transactions with British consumers and to advertise in the United Kingdom; and to provide that all relevant operators contribute to the horse race betting levy.
Philip Davies (Shipley) (Con)
It would help if my hon. Friend set out the main purpose of the Bill and if we pinned down its main thrust at this stage. Is it better to regulate the online market to raise revenue for the Treasury or to raise more income for the horse racing industry?
Miss McIntosh
I am grateful to my hon. Friend, who takes a close interest in horse racing. He and I share a love of horse racing, and I shall a say little about the contribution that racing makes to the rural economy in my constituency. The Bill’s main purpose is to bring things onshore to the United Kingdom, where the racing takes place, and to emphasise that when a bet is placed online the point of consumption is in this country. The whole thrust of the Bill is to bring money back into racing, and I shall explain how. The Treasury’s proposals, which I understand can be introduced in any Budget—perhaps not this year; possibly next year—will restore the tax situation to those offshore betting companies. That is not the purpose of this Bill. The main difference between it and the draft Gambling (Licensing & Advertising) Bill, which has been drafted by my right hon. Friend the Minister, whom we welcome to the Chamber—we look forward to his response—is that this Bill relates to the levy.
Miss McIntosh
On a closer reading of the Bill, my hon. Friend will see that it
“extends to England and Wales, and Scotland”
and, in part, to Northern Ireland. That is obviously a matter for debate.
Horse racing is important for both business and tourism, with a number of race courses in and around my constituency. Thirsk is the main local race course, but there are also courses at York, Wetherby and Ripon. The industry is vital, and a large number of trainers, jockeys, breeders, bloodstock agents and stable lads and lasses depend on the racing industry for their livelihood. My constituency home is on a former stud farm. The contribution that racing makes locally in Thirsk, Malton and Filey is considerable. There is a direct link to point-to-point racing, as well as a contribution to local pubs, shops and restaurants, which benefit from the visitors, thus making a contribution to leisure tourism. One need only visit Thirsk on race day, or race evening, to see the town come alive.
I thank my constituency chairman, Peter Steveney, who has been extremely helpful in enabling me to prepare for the debate and introducing me to many of the main players in the racing community both locally and nationally. I thank everyone who briefed me for today’s debate.
Philip Davies
My hon. Friend will be delighted to know that I contribute to the local economy in her constituency by owning and breeding a number of horses stabled there—at great expense, I might add; I cannot advise anyone to get involved in that activity on commercial grounds. Does she agree that it is not just the trainers and the breeders but the stable staff who work in our constituencies who rely on the racing industry, not just for income but for their jobs?
Miss McIntosh
I shall try to speak more slowly, because I referred to the stable lads and lasses. I yield to no one in my admiration for the work they do. Mucking out horses, taking them out of the stables and returning them to the stables at this time of year is a hard job. I have visited a number of stables, but I have not had the good fortune to see any of my hon. Friend’s rides saddled in my own constituency.
I should like to recall the tragedy that occurred in Malton three or four years ago. Two successful jockeys—rising stars—lost their lives in a tragic fire. For that reason, we very much hope to establish an injured jockeys facility in Malton.
Philip Davies
Has my hon. Friend had the pleasure of seeking out the advice of Mr Michael Easterby, the trainer of my horses and a supportive constituent of hers? If she has not, I suggest that she does. I am happy to facilitate such a visit, because she will learn an awful lot from him, not least some colourful language.
Miss McIntosh
Indeed, my ears are still smarting from my last visit, when I witnessed the severe flooding suffered by the Easterby stables. We must not forget Michael Easterby’s brother, Peter, and I congratulate all the trainers based in my constituency on having the good sense to bring horses such as those owned by my hon. Friend to a marvellous constituency where there are many excellent opportunities to train them.
Having said that, I have visited Middleham in the constituency of the Foreign Secretary, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), where there are some major racehorse trainers, which only emphasises how important racing is to the north Yorkshire economy. Indeed, many rural market towns depend on local race courses as a source of enjoyment and employment, and as a contribution to the local economy. However, those race courses are under increasing pressure, and it is all too easy for smaller, rural race courses to be under threat from other purposes such as housing. The House would wish to record its disappointment at the recent closure of race courses such as Folkestone and Hereford, and I hope that that process will be halted and kept under review. This is a desperate state of affairs, and many fear that local communities are losing out, with jobs being lost and people being made redundant.
In 2011, 93 races were held at Thirsk race course, with 2,253 entries. These fixtures attracted 55,000 people over one year. This proves that racing is entertainment, which draws people to the area to spend money and contribute to the local economy. In 2011, according to the Sheffield Hallam economic impact study, York race course contributed £58 million to the local economy. The wider racing industry in Yorkshire, with nine race courses, the Northern racing college, Doncaster bloodstock sales, and 120 training yards and stud farms, was calculated to contribute more than £220 million a year to the economy and to support more than 2,300 full-time jobs from the core activity. A further 830 jobs were also supported in the region.
York race course is widely recognised for its good racing. I was honoured to attend during the Royal Ascot at York week. In the past decade York race course has invested over £30 million in capital projects, including the new stands, the track and race-goer facilities. The key part of its income is from the levy board, which helps to fund prize money, and from the wider investment that York race course enjoys through non-interest-bearing loans for capital expenditure for things such as the new stands. Funding from the levy went towards the major developments of the Knavesmire stand in 1996, the excellent Ebor stand in 2003 and the upgrading of the Melrose stand in 2011, as well as the track project in 2009. There is currently a £5 million development at the northern end of the race course to provide a new weighing room, a pre-parade ring and a saddling box. If York race course had not made the improvements to the track, it could not have hosted Royal Ascot at York because the track was not big enough.
The current situation with the levy, which needs to be addressed, means that eventually there will be fewer and fewer entries in races. My hon. Friend the Member for Shipley (Philip Davies) has given us a few markers as to why. Owners and trainers will want to enter their horses in races held overseas to capitalise on the high prize money available there. This would be devastating for north Yorkshire, Yorkshire as a whole and the rest of the country, as the number of active race courses in the UK would decline, a large number of people would lose their income, and livelihoods dependent on racing would decrease.
Philip Davies
I hope my hon. Friend will not over-egg that pudding. Most small owners—and most owners are small owners—own horses because we want to see them run. It is therefore not very likely that we would send them off to be trained in France because the prize money is better there. The races with the most prize money tend to have the fewest entries, and the races with the lowest prize money tend to have the most entries, so I am not entirely sure that the correlation my hon. Friend is presenting stands up to a great deal of scrutiny.
Miss McIntosh
That is a matter for debate. The five-year trend shows that there has been a 15% drop in prize money in flat racing. Perhaps my hon. Friend enters horses only in jump races and is not affected by that.
Philip Davies
My horses run on the flat and over jumps. Any prize money that anybody gets back from owning a horse is a bonus. Most people write off the money and do not expect to get anything back. About 85% of all prize money goes to the top 10 or 15 owners, so increasing the prize money tends to be an exercise in throwing apples into already full orchards.
Miss McIntosh
I think that the hon. Gentleman might find some reassurance in the remarks I am about to make. I will answer the point the hon. Member for West Ham (Lyn Brown) made earlier about enforcement. I hope that the Bill will satisfy her in that regard. The Select Committee’s excellent report sets out why we need the Offshore Gambling Bill, as opposed to a remote gambling Bill. I will now go through the relevant clauses.
Philip Davies
The hon. Member for Newcastle-under-Lyme (Paul Farrelly) is a far more distinguished member of the Committee than I am. Has my hon. Friend given any thought to the legality of her proposal to add the levy requirement on to this issue, because it seems to me that it might contradict European law? She is much more of an expert in that field than I am, so I wonder whether she could tell us about it. If it did fall foul of the European Union, perhaps that would encourage her to join me in voting no when the referendum comes.
Miss McIntosh
I believe that the debate we are about to have on clause 4 goes to the heart of that matter, but I would like to remain in order and to go through clauses 1, 2 and 3 first before addressing the issue of the levy, which is set out in clause 4 of the Bill, which I am promoting on behalf of my hon. Friend the Member for West Suffolk.
Clauses 1, 2 and 3, as the Select Committee has made clear, set out the problem. The Bill proposes to put the operation at the point of consumption, which means where the customer is in the United Kingdom. I do not think that any customer placing a bet, either through a betting exchange or online—I saw yesterday for the first time a betting exchange work on someone’s mobile phone, but I am afraid that I resisted the temptation to place a bet—assumes that the company through which they are placing it is based anywhere other than the United Kingdom. I think that it would come as a surprise to them to learn that the company is based in Gibraltar, the Isle of Man or some other such place.
The background information provides a reason for bringing offshore operators into the United Kingdom for the purposes of advertising, licensing and the levy. Betting companies that provide gambling facilities for British customers will be required under the Bill to be licensed by the Gambling Commission, which will ensure that the correct tax and levy are paid, and the tax situation will be resolved in future by the Treasury. If a bet is placed in the UK, under the point of consumption licensing, that bet and the company behind it should be covered by UK law and domestic regulation to protect consumers. That should be welcomed by the betting companies because it gives them, to use the idea expressed by the hon. Member for Newcastle-under-Lyme, clarity and legal certainty and sets the relationship on a sound commercial basis on which they can operate. It will be completely transparent and open to scrutiny by the regulator.
Philip Davies
If the Gambling Commission had to license each individual betting operator wherever they operated around the world, as opposed to simply accepting a white list and the regulation that takes place in a particular jurisdiction, has my hon. Friend given any thought to what the resource implications would be for the commission and how many extra staff it would need to take on to deal with that extra licensing?
Miss McIntosh
I hope that my hon. Friend will not mind me answering in plain Yorkshire by saying that that is plain daft. The Gambling Commission had the right number of people in place from the outset; they are just not being put to good use. The so-called white list is being completely avoided, contrary to the terms set out by my hon. Friend’s own Committee, which wants to discourage the formation of a grey market. The white list is not working—a grey market is coming in and undermining companies such as bet365.
It is absolutely clear that an unintended consequence of the Gambling Act 2005 was the movement offshore of the major betting operators. All it took was for one operator to move offshore and the others followed, as it became less competitive for them to remain in the UK. This was neither the wish nor the stated intention of the House when the Gambling Bill was going through its stages, and now the problem must be rectified once and for all. The Offshore Gambling Bill would restrict what betting operators can do on the internet without a licence, and it would make it harder for operators to find customers in the UK, because they would be banned from advertising and marketing if they did not obtain a licence.
Philip Davies
My hon. Friend claims that that what I said was daft, but could she give some examples of betting companies that operate on the grey market and that do not offer proper protection to punters? As far as I am aware, there is very little evidence of betting by UK punters on any grey market whatsoever. The danger is that the Bill would create a grey market, not that there is a grey market at the moment. We would all be interested to hear whether my hon. Friend has evidence of any companies with UK customers that are operating on what she would describe as a grey market.
Miss McIntosh
I do not think that the purpose of this debate is to draw up a grey list or a black list; the purpose of the debate is to set out the problem, as identified by my hon. Friend’s Committee, and to address it.
Obviously, it is impossible to restrict all internet use because of its sheer size, but we want to make the situation much fairer and clearer for anybody placing a bet and put everything on to an even keel. I think that one point that my hon. Friend and I would agree on is that we want to bring more money back into the UK so that it can then be spent on racing.
Because of the increased use of the internet for gambling purposes, it is crucial that the integrity of the sport is maintained. Therefore, information-sharing between betting operators—for example, the information on account holders—must occur when suspicious gambling takes place.
As I said earlier, the Gambling Commission would play a crucial role in the public policy aspect of clauses 1, 2 and 3 in protecting the young and vulnerable. It surely must be in the interest of bookmakers to have a healthy racing industry. The purpose of the Bill is not to pit bookmakers against other sectors of the racing industry; its purpose, and that of the positive conversations that I have had with those in the racing industry, is to promote partnerships. That is something that successive Government have done. The Labour party chose to call them, rather vulgarly, stakeholders, but we prefer a more cuddly partnership approach. That is precisely what we want to achieve—a partnership with bookmakers, whom I think have become one step removed from other partners in the racing industry. We also want to create fair competition between onshore and offshore bookmakers.
Hon. Members may raise the fear later in the debate that the operation of online betting will be moved further offshore to China. I would like to know from those hon. Members how that can happen when it is completely illegal to place a bet in China, either online or offline. China is a bad example to use.
Miss McIntosh
My hon. Friend throws new light on the debate with an issue of which I was unaware. I do not know whether my hon. Friend the Member for West Suffolk knew of it when he was drafting the Bill, but I am sure that it has caused great consternation to the House.
Racing is still the main sport that attracts those who place bets online or offline into a betting shop or on to a computer to place a bet, and that is why this Bill is so important.
Philip Davies
Thank you, Mr Speaker. I am grateful to my hon. Friend for giving way, but would she accept that most of the corruption she mentions with regard to sport and gambling has had nothing to do with any UK-based company or even one based in Gibraltar? It has been fuelled by illegal activity in the far east—perhaps that is why she got mixed up on China earlier. Any changes to regulation here would make no difference at all to that illegal betting activity in the far east.
Miss McIntosh
What we are trying to do is help racing in the UK by bringing activities that are deemed to be in the UK back here so that they fall within the remit of the Gambling Commission. That would lead to, I hope—mindful of those placing bets—a duty to behave responsibly and would provide legitimacy for licences based in the UK. I will come in a moment to why it would introduce a level playing field.
Miss McIntosh
Perhaps I am not being very clear, but I think that the wish of the House is to include clause 4 to address the levy situation. Together with any potential Treasury action in the Budget, we need to ensure not only that a sensible rate of tax is set by the Treasury but that the levy and tax contributions together cannot be left as voluntary. We have recently seen too much of corporations such as Amazon and Starbucks avoiding tax in this country.
Philip Davies
I understand the thrust of my hon. Friend’s point. However, when the Secretary of State comes to a determination on the levy, or an agreement is reached on it, the mechanism used is designed to reach a particular figure of, say, £75 million. If the Bill succeeded and money were added on, the target figure of £75 million would still apply. All that would happen is that the mechanism used to calculate it would change in order still to hit £75 million. We would not get any more money through the levy; we would just have a different mechanism for getting to that figure.
Miss McIntosh
That is a matter for debate. I would hope that there can be some flexibility in this regard. Tax is a matter for the Treasury, while the levy is a matter for the Department for Culture, Media and Sport.
As the levy already exists, there should not be a problem in extending it to overseas operators to equalise the conditions of competition so as not to generate a new state aid issue. If it is thought that the levy raises such an issue, the Gambling Commission has waited an incredibly long time to say so. The levy is not paid directly to economic operators in the field of horse racing but directly to the Horserace Betting Levy Board, which then distributes it for the improvement of horse racing as an industry, including veterinary science and education. Without the levy, it is hard to see what contribution bookmakers would make. The levy fell to a very low level, but it started to rise and now seems to have stabilised again.
Miss McIntosh
I do not want to appear ungracious and I congratulate the Minister on the work he has done in preparing the remote gambling Bill. However, there is a sense of urgency. Every time I visit a stable yard—whether or not it is the one housing the horses of my hon. Friend the Member for Shipley—I have the acute impression that a crisis is hanging over the racing industry that we need to address. Competition is currently distorted and some companies are reaping the benefits of the industry—consumers wanting to place bets—but do not contribute financially to the long-term upkeep and maintenance of horse racing.
Although the levy is provided from state resources, its extension to overseas operators would only equalise, not distort, competition. The overall impact of betting operators having moved offshore has been the decline in prize money I referred to earlier. Race courses have therefore had to fund part of the prize money themselves, as well as fund the levy, which is its biggest overhead. Therefore, if the levy decreases, race courses have to contribute more to maintain the same level of prize money. That is difficult to do, because if more money goes into prize money, less is available to spend on the integrity of the sport and things such as the photo finish and dope testing.
Philip Davies
That is not necessarily the complete picture, as I am sure my hon. Friend knows. Racing and race courses get income not just from bookmakers through the levy; increasingly it comes from picture and media rights, which those have gone up massively in recent years to the extent that, if the levy and media rights are taken together, we see that bookmakers are now paying far more for the racing product than ever before.
Miss McIntosh
As I have said, other reasons include the cost of keeping a horse in training, to which I am sure my hon. Friend the Member for Shipley will testify. Feeding costs have gone up hugely for all livestock, including horses. Bedding costs have gone up hugely. Alternatives to straw are being considered. Corn is being produced so that more corn goes to cereal and there is less straw, which has a huge impact on the stabling costs. Many of the stables I have visited had considered alternatives such as cut-up newspaper. However, I understand that stabling horses with newspaper—this also applies to using newspaper for chickens—leads to a cough and is a health hazard that can prevent horses from running.
There are therefore reasons other than economic ones—though costs are increasing—for smaller field sizes and fewer runners. In turn, that reduces the footfall at the race course, and so yields less income from admission prices. Figures for the past five and 10 years show that average attendances are down by a considerable 7%. Trainers are training fewer horses, and therefore require fewer stable staff and fewer farriers, which will have huge knock-on effects in rural areas such as my own of Thirsk, Malton and Filey. The trainers require fewer saddlers and horse boxes. The knock-on effect on the whole rural economy is potentially huge.
The results are the same if there is less prize money, because owners enter their horses in races from which they will see a greater return, and at this point in time that means overseas. My hon. Friend the Member for Shipley seems to be bucking the trend, because it appears that the number of owners is down. The number of sole owners has dropped in the past 10 years by 13%, which is less than the drop in partnership or company owners whose numbers are down by more than 31% in the past 10 years, and by almost 20% in the past five years. I do not think the House can argue that the racing industry is not facing a crisis. That is why the Bill is so urgent. My hon. Friend the Member for Rochford and Southend East (James Duddridge)—I am delighted to have had the honour to represent that area in the European Parliament between 1989 and 1994—must now be satisfied about why the racing industry is in penury and why racing needs the money.
It is true that the wealthy end of the sport—I am looking at no one in particular—is unaffected by the reduction in prize money. However, at the budget end of the sport, the smaller syndicates and individual owners are struggling.
Philip Davies
Lest anyone be confused by my hon. Friend’s musings, I assure her that I am certainly not at the wealthy end of any spectrum, and that I own my horses through small syndicates, which she said were not decreasing in number as much as sole owners. I am at that end of the market rather than the Sheikh Mohammed end.
Miss McIntosh
I have a link with Sheikh Mohammed—his horses were at stud where I live in the constituency—but I take my hon. Friend’s point.
The fact is that the problem affects the race courses that are in far more remote areas of the country, located further away from racing centres. I am not thinking particularly of my area in that regard, but of further- flung courses in Scotland and the UK, which are feeling the effects of the reduction in the levy because they have less to offer to owners and trainers. A further consideration is the price of fuel and the location of the race course in relation to the trainer’s yard. The trainers to whom I have spoken have made that point most vigorously. They take not just one horse to one course on a given day, but multiple horses to multiple race courses. That makes certain race courses far less appealing than others.
I have argued that state aid rules should not be a significant issue, but if they are, a way around them has been suggested: all betting operators could require a UK licence. However, in order to obtain that licence, they must enter into a commercial deal with the British Horseracing Authority that ensures that a percentage of their gross profit goes back into racing. That approach has already been taken up by one betting operator, to which I have referred. Pressure must be placed on others to follow. There could be a further incentive: betting operators must have a commercial deal if they want to sponsor the big races and meets.
On the so-called problem of competition law—[Interruption.] I ask for the Minister’s attention at this point, because this is the crux of my argument and the main difference between the Gambling (Licensing & Advertising) Bill, which deals with remote gambling, and the Offshore Gambling Bill. I struggle to see why the Minister, the Department or the Government should so categorically state that extending the levy to overseas operators would breach the rules on state aid. I mentioned my own background information in that regard, but I have also taken advice from a legal counsellor.
To state the obvious, the levy already exists, so its extension to overseas operators would purely be to equalise the competition conditions and ought not to generate any new state aid problem. Those arguments arose at the time of the sale of the Tote—I argued vigorously with successive Governments that there were no state aid issues. We are often fearful in this country of debating with the European Commission, and yet, in my experience, Commission officials are even more open than officials from UK Government Departments. The existing levy of the 1960s pre-dates our entry into the Common Market in 1973 and has grandfather rights, as I have said. If it is thought to raise a state aid issue—as I have explained, there are good reasons why it should not—why has the Commission waited so long to raise this point? I put it to the Minister and the House that the Commission has chosen not to do so because there is no state aid issue. I want to help the Government and my right hon. Friend the Minister in this regard. The Government might be nervous that the Commission is currently examining the state aid aspects of the parafiscal levy on online horse race betting in France. France has been notified that such a measure is, in the Commission’s view, a state aid.
The Commission has opened proceedings under article 108(2) of the treaty on the functioning of the European Union. The case that the Commission brought against France commenced in 2010 and has still not been completed some three years on. It relates to a levy to finance the public service mission of
“improvement of the equine species and the promotion of horse breeding”—
this is from official journal, which is the reason for the legalese—and
“training in the horse racing and breeding sector and rural development.”
The invitation to submit comments under the treaty on the functioning of the EU was published in January 2011.
The case against France is that the French authorities notified the Commission of a proposal for a parafiscal levy on online horse race betting in order to fund a public service mission entrusted to horse racing companies. The notified measure comes in the context of the opening up of certain online games of betting and chance under the French law of 12 May 2010. That law ends the monopoly on online horse race betting held by Pari Mutuel Urbain, commonly known as PMU, an economic interest grouping of 51 horse race companies that, however, retains the monopoly of online horse race betting through its physical network of sales outlets. The French authorities argued their case that the purpose of the levy was to fund the public service mission improvement. They subsequently submitted this to the Commission and it considers that the aid measure contains all the features constituting the concept of state aid, and published its decision inviting comments and consultation.
My question to the Minister today is: have we, as a party, joined that case? Did the Government respond to that invitation to clarify the legal situation? That would have been immensely helpful to the Minister, both in responding to the Offshore Gambling Bill today and in preparing his own remote gambling Bill. I want to strengthen the Minister’s and the Government’s arm. We have nothing to fear on this point from the European Union. We have a very strong case to put, and it appears to me that there are distinctions between it and the French case. I hope the Minister has joy and that the Government did respond to that consultation and can use it as an opportunity to clarify the difference between the French proposed parafiscal levy and our levy which has existed since the early 1960s and enjoys grandfather rights, which by no stretch of the imagination can be said of the French proposed parafiscal levy. If the Minister did not respond to that consultation, he owes the House an explanation of why the Government chose not to respond, as it would have been a unique opportunity to clarify the law in this regard.
There are distinctions between the French case and the Horserace Betting Levy Board. Most importantly, the levy in this country is not paid to economic operators in the field of horse race betting, but paid direct to the Horserace Betting Levy Board, which then distributes the proceeds of the levy for the improvement of racehorses: and breeds of horses, and for the advancement of veterinary science and education. There is no direct participation by bookmakers in the proceeds of the levy, and if any advantage is conferred on them it is only on the maintenance of the stock of good quality horses, the provision of grants to cover the costs of regulating races and to provide loans for the improvements to racehorses. It is very hard to reconstruct what contribution bookmakers might have made without the levy, but it cannot be sensibly said that the levy relieves bookmakers of the burden that they would otherwise have had to assume. Indeed, the paradox before us today is that the existing levy confers an advantage on overseas operators, since they derive, albeit indirectly, the benefit from a healthy horse stock and well-provisioned race courses without having to make the contribution that their domestic competitors have to make. That must surely distort competition.
We are not proposing state aid. In no way would the Government, were it to agree to clause 4, be proposing state aid. Clause 4 seeks to equalise unfairness and to remove the distortion to competition between bet365 and others who place their bets in the UK, and those offshore operators who place their bets in Gibraltar and in other offshore territories. It may be that I have to concede that the levy is provided from state resources, because it is a statutory levy. However, there seem to be powerful arguments that its extension to overseas operators would tend to equalise the conclusions of competition, not distort it.
I therefore put it to the Minister that today is his opportunity to explain his views, his Department’s views and the Government’s views on state aid once and for all. We have never had the opportunity in the House to discuss this—this is a unique opportunity to do so. It is incumbent on the Minister to explain why, if he did not, he did not respond to the consultation’s points in the official journal called by the European Commission to the French-proposed parafiscal levy. I ask the Minister to explain his views on state aid, and explain why they are at such variance from mine and those of the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk who is sat next to him on the Front Bench. We believe that this does not constitute state aid but merely seeks to close the gap and remove the existing distortion from competition.
Philip Davies (Shipley) (Con)
We have had an excellent debate today, and I commend everybody who contributed to it. It has been very informative. Some strong opinions have been expressed on both sides of the argument, but I think that they have also been well informed.
Before I get into what I want to say, I refer Members to my entry in the Register of Members’ Financial Interests. Unusually, I do not think there is anything in there that is worth declaring, but in case anyone does, I would like them to have a look at it and pore over it themselves to see what they can find. Just to give a complete disclosure, the only thing that I think is of any relevance is a subscription from which I receive no financial benefit whatsoever, from a company called Peninsula Business Services Ltd. It does what it says on the tin: it deals with employment services, and that is how I dealt with it when it approached me about an employment matter. It happens to be owned by Peter Done, the brother of Fred Done, who owns Betfred and now the Tote. You might think it a rather tenuous link, Mr Deputy Speaker, but others might not, so it is all there on the record for anyone to pore over. I reiterate that I receive no personal financial benefit from it. If I was ever to invoke the subscription I receive, it would be to the benefit of the taxpayer, rather than me.
Even though we have had an informative and extensive debate, I think it would be fair to say that it has not been incredibly helpful to the Minister or the Government. My hon. Friend the Member for Thirsk and Malton (Miss McIntosh) made an excellent speech. I did not necessarily agree with all the points she made, but she made them very well. In my first intervention on her, however, I asked her what she thought the main thrust of the Bill was—whether it was to improve regulation of the gambling industry and player protection, whether it was to raise money for the Treasury, or whether it was to provide more money for the racing industry. I stand to be corrected, but my hon. Friend seemed to say that the thrust of what she is trying to achieve was to bring in more money to the racing industry. As she made perfectly clear, she represents a community in which racing has a large presence, and she is, quite properly, trying to do the best for her constituency, constituents and local community. That is why she feels so passionate about it, and more power to her elbow in that regard. I take it that that is why clause 4, which relates to the levy, is so important to her and why its omission from the Government’s own Bill, which covers many of the same matters, is unacceptable to her. That is her opinion and we all appreciate the clarity with which she expressed it.
The hon. Member for Newcastle-under-Lyme (Paul Farrelly) also made an excellent speech. I, like him, commend bet365, and not just because it has stayed in the UK to pursue its business interests and has not gone abroad like everybody else. It has been helped by the fact that it is family-owned and does not have any shareholders to account to. I think I am right in saying—I will apologise to the company profusely if I am wrong—that, when its representatives gave evidence to the Culture, Media and Sport Committee as part of our inquiry into the Gambling Act 2005, they themselves acknowledged that had bet365 been a public company on the stock market, they would have found the pressure to move abroad irresistible. Nevertheless, it could still do that as a family-owned business. The fact that it has not shows—this is what I took from the evidence its representatives gave us—a deep-seated commitment to its local community. That should be commended. They are very proud of the fact that they employ so many people in Stoke and of the impact that they have on the local community—the hon. Gentleman mentioned the football club—and that is to their credit.
However, by talking so much about bet365—as he is entitled to do, because it is a big employer of his constituents—the hon. Gentleman seemed really to be focusing on the tax implications of the Bill and the idea that it offered an opportunity not only to level the playing field with regard to the competition that bet365 faces from people who have moved abroad, but for the revenues that such a move would generate for the Treasury. This seems rather inconvenient for the Government and, no doubt, for the Minister.
The Minister’s knowledge of these matters is greater than mine, so I would happily be corrected, but, as I understand it, the thrust of the Government Bill, which so closely mirrors this Bill—the point of consumption bit is virtually the same, if not identical—is not actually about bringing money in to the horseracing industry, which may well fall foul of European law. It would probably be tested in the courts and, as we have seen in the past, it is very difficult to predict the verdict of the European Court of Justice.
To illustrate the point, there was a court case in which the racing industry was trying to argue that it had data that it could sell on to bookmakers on a commercial basis. I think that the industry was very certain that it was going to win its case against William Hill when William Hill challenged it in the courts, and it seemed to be a great surprise to the industry when it lost. Court cases seem to be unpredictable.
Miss McIntosh
I am following my hon. Friend’s remarks carefully; I apologise for missing the start of his speech. Is he aware of the basic concept in European law that the European Commission is the arbiter of competition law, and that it has had an unconscionable length of time in which to bring the British Government to task if it wished to do so? I believe that we are on very strong ground in that regard.
Philip Davies
I accept what my hon. Friend says. She is far more of an expert on these matters than I will ever be. The House will listen to her opinion with great interest and deference because she is an expert on this subject. I am not a lawyer. People like my hon. Friend the Member for Bury North (Mr Nuttall) are much better qualified to speak on legal matters than I am. I am not an expert, I do not pretend to be an expert, and I will just have to see how events unfold, as will everybody else.
My hon. Friend the Member for Thirsk and Malton may well be right, but whatever the merits of the case, I suspect that were the purpose of the Bill to increase levy payments for the racing industry—notwithstanding the fact that she thinks that is perfectly reasonable—it would face a legal challenge that the Government could probably well do without. Furthermore, it would in many respects entrench the levy system in the industry at a time when the Government have been trying to get away from that system for funding horse racing, so it seems to be moving in the wrong direction in that regard too. I accept my hon. Friend’s legal opinion on the matter, but this measure would certainly add a legal complication that I suspect the Government would rather avoid.
As regards raising revenue for the Treasury. I think I am right in saying that the same issue applies. If it is felt that the reason for the point of consumption legislation is simply to fill the coffers of the Treasury, that in itself could well fall foul of the European Union’s rules, because it certainly would not want to get into a situation where people in one part of the EU are introducing point of consumption taxes on places in other parts of the EU, because the whole thing starts to fall apart at that point. If that was the main motivation behind the legislation, I think that the EU would want to avoid it.
Miss McIntosh
The point of consumption tax has already been established in other member states for the purposes of licensing and advertising activities. That is a separate point from the levy, which is the purpose of clause 4. As I said at some length, the tax issue should rightly be separated from this Bill. I understand that the Treasury has already consulted on the tax situation in 2012. It is for the Treasury to come forward with tax proposals.
I do not wish to mislead my hon. Friend and the House, so I merely say that the purpose of clauses 1, 2 and 3 is purely to establish the point of consumption for the purposes of obtaining a licence, being a licensed operator, having a commercial deal, and advertising the activity, all of which are deemed under the Bill to take place in the United Kingdom. There is common ground between what the Government are proposing and what my hon. Friend the Member for West Suffolk (Matthew Hancock) and I are proposing. Clause 4, on which the debate and the Bill hang, would extend the levy in the way that I set out.
Philip Davies
My hon. Friend is right. Such measures have been established in other parts of the European Union, and there is no problem with having point of consumption in principle. I have no problem with that, and if I remember rightly my hon. Friend quoted the conclusions of the Culture, Media and Sport Committee on which I serve. She was absolutely right; it was a unanimous report in every regard. There was no minority report or any divisions on the recommendations, and the Committee agreed the report in full. I certainly stand by the recommendations highlighted by my hon. Friend.
This is not about the principle of point of consumption, but the Government may run into problems when considering the purpose for which such a measure is being introduced. If they can satisfy the European Union that they are introducing it to regulate better the gambling sector, they will be on strong ground, and I suspect that test was satisfied in other parts of the EU where such measures have been introduced. In those cases, however, people may have been starting from scratch and deciding to start their regulation of the gambling industry on that basis. That would not apply in the United Kingdom where we already operate on a different basis that we would need to change, thereby introducing a complication that might not have applied elsewhere.
The Government want this debate to focus on why a point of consumption tax, this Bill and the Government’s version of it are so necessary. This is not about increasing funding to the racing industry by increasing levy payments, because that would introduce a complication, and the Bill’s main purpose is not one of increasing revenues to the Treasury—the Government do not want to go down that route because they will run into different legal problems. The Government want to concentrate on the fact that the Bill is necessary only to regulate the gambling industry better. That it may also increase revenues to the Treasury, or that my hon. Friend the Member for Thirsk and Malton may use it to increase revenues for the racing industry, is merely a useful coincidence, and, as I understand, certainly not what the Government would like us to believe the Bill is about.
As the Minister knows, I have an awful lot of respect for him—he is a great man and we are very lucky that he holds that position. I suspect, however, that he has been passed what might in rugby terms be described as a hospital pass with this Bill, and it will take all his considerable abilities, charm and finesse to extract himself and the Government from this situation. His position was not helped—he will certainly not want to agree with me on this, although he is entitled to feel it—by our right hon. Friend the Chancellor of the Exchequer who signposted the proposed legislation in his Budget speech.
Perhaps I may remind hon. Members of what the Chancellor said:
“One area where I am today making substantial changes is gambling duties…The current duty regime for remote gambling introduced by the last Government was levied on a ‘place of supply’ basis. This allowed overseas operators largely to avoid it, and much of the industry has, as a result, moved offshore. Ninety per cent of online gambling consumed by our citizens is now supplied from outside the UK, and the remaining UK operations are under pressure to leave. This is clearly not fair—and not a sensible way to support jobs in Britain. So we intend to introduce a tax regime based on the place of consumption—where the customer is based, not the company—and, from this April, we will also introduce double taxation relief for remote gambling. These changes will create a more level playing field, and protect jobs here.”—[Official Report, 21 March 2012; Vol. 542, c. 803.]
The genesis of the legislation is therefore clear—the Chancellor’s Budget. It will be no great surprise that my hon. Friend the Under-Secretary of State for Skills, whom all hon. Members regard highly, was and remains a close friend and ally of the Chancellor of the Exchequer. I suspect it will not be difficult for people to put two and two together and think, “Well, hold on a minute. The Chancellor said what he said in the Budget, and we have the Offshore Gambling Bill. Hey presto! That is how the Government will introduce the legislation.”
The problem is that the Chancellor made no reference in his Budget to the need to introduce the measure to improve player protection or better regulate the gambling industry. He made no reference to that being a problem that needed solving. We are beginning to understand what motivated the Government to introduce the Bill. I do not criticise the Chancellor: what he said was perfectly reasonable and fair, and many hon. Members on both sides of he House agree with his analysis, but I suspect that it has been unhelpful. He may not have been aware of the legal minefield he was in at the time, but people have become aware of it, and the Government have backtracked to change the nature of the debate. The debate must now be based, therefore, on player protection and the regulation of gambling rather than on—we can probably guess this is the real motive for the measure—getting money into the Treasury, which is no bad thing, and levelling the playing field for companies such as bet365 so that they do not go abroad, which no hon. Member wants.
I believe the Chancellor was also hinting that, if we get the measure right, we may even be able to reverse the trend. It would be fantastic if we were not just trying to stop bet365 leaving the country, but putting a regime in place that encouraged companies that have left the UK to come back. Not only would we retrieve lost revenue; we would also get jobs back. Lots of people in the UK would love the jobs that have been exported to places such as Gibraltar because of the current situation to come back to this country. With the best will in the world, neither the Offshore Gambling Bill nor the Government’s alternative Bill will make any difference in that respect.
There is no prospect whatever of any of those organisations relocating to the UK, whatever rate of tax the Government introduce. I think that would be a missed opportunity. My hon. Friend the Member for Rochford and Southend East (James Duddridge) mentioned a rate of 5%. If we had that rate and the Government asked the gambling industry whether it would agree to come back in return for that rate, there might well be scope for negotiation, but VAT will scupper such a plan, because gambling industries in the UK cannot reclaim their VAT. The money they spend on advertising is not reclaimable, but it is reclaimable overseas.
The House would support a regime that levelled the playing field, and that means companies paying more in taxation than they currently pay—no one would argue with that. The House would support a regime that gave companies an incentive to bring their operations back to the UK and the jobs that would come back with them. Surely that is a great prize to aim for, and I urge the Minister to lobby the Chancellor. All that is required is for the Chancellor to help with taxation—not just point of consumption taxation for the online industry, but VAT relief. Those two things combined could get those jobs and companies back. That is what we should be aiming to do. It is a strange state of affairs when we are spending lots of time trying to stop one company leaving—it is a negative thing to try to achieve—when much bigger prizes are at stake.
In many respects, the main thrust of what my hon. Friend the Member for Thirsk and Malton said concerned the levy. I should thank my hon. Friend, because from what she and my hon. Friend the Member for Mid Norfolk (George Freeman) were saying, it seems that, in essence, the Bill is designed to help me. As we discussed earlier, I am a very modest owner of racehorses. I am an owner of very modest race horses, too, to be perfectly honest. Contributing to the odd shares and legs and other parts of the anatomy—I am sure that it does not make a great impact on the considerable wealth of Mr Michael Easterby, in the constituency of my hon. Friend the Member for Thirsk and Malton—provides me with a great deal of pleasure. I seem to be the kind of owner that my hon. Friend says she wants to help. I regret to inform the House that I am also a very small-scale breeder of racehorses, too. The saying goes in racing circles that the only thing worse than having one broodmare is having two. There is no better way of leaking money as quickly as possible than breeding horses. The only thing that can compete is owning horses. Whichever one chooses, the only possible outcome is that one will be considerably poorer at the end of it than at the start. I think that somebody once said that the best way to gain a small fortune out of owning and breeding racehorses is to start with a large fortune—there is a considerable amount of truth in that. I should therefore be grateful to my hon. Friend for having me in mind to try to boost the modest returns I get from my horses. It is a rare pleasure when any of them trouble the scorers.
In passing, my hon. Friend the Member for Mid Norfolk encouraged us all—I think I am right in saying this; we can all check Hansard later—to back a horse called Wind for Power in the 1 pm at Lingfield today. I am sure that that was partly directed at the hon. Member for Brighton, Pavilion (Caroline Lucas), who was waiting to debate her Bill. I am sure she would have been encouraged to back a horse with that particular name, and I am delighted to announce that the horse won. If anybody took my hon. Friend’s advice, they are now considerably richer than they were when this debate started.
Philip Davies
I am very grateful, Mr Deputy Speaker. You are, as ever, absolutely right. I was getting carried away with my hon. Friend’s tipping prowess and I promise not to return to it. I will take your chastisement as an indication that you are keen to acquire a leg or two of your own, and I will certainly be happy to negotiate a deal for you.
Even though the horse racing levy is supposed to benefit people like me, I am not entirely convinced by the argument given by my hon. Friend the Member for Thirsk and Malton. Clause 4 is well meaning and I do not want to decry that, but I do not think that it will have the impact she thinks it would. I spoke about this briefly in an intervention. The levy is determined, hopefully, by agreement—it has been recently, which is to be welcomed—between the betting industry and racing industry through the auspices of the levy board, and we should all thank it for its work. When they come to an agreement about how much money should be handed over from the betting industry to the horse racing industry, rather than concentrating on the mechanism of how that money is raised, people are really thinking about how much it will raise. People think, “Well, what we need is a certain amount of money from the betting industry to make the racing industry viable which is reasonable to ask the gambling industry to provide based on the money it makes from the horse racing product.” A figure is therefore arrived at that seems reasonable.
I cannot remember, but I have a feeling—the Minister will be able to help out on this—that the last time the Secretary of State determined what the Government thought was a reasonable price for the betting industry to pay the racing industry, the figure arrived at was somewhere around £75 million. The Government then introduced a mechanism in the levy, making slight amendments to try to deliver £75 million—or whatever figure they thought was a fair amount for the gambling industry to pay—and that was that. The mechanism was arrived at to deliver the figure.
My hon. Friend the Member for Thirsk and Malton seems to presume that everyone will continue with the same mechanism, which will simply deliver more money to the racing industry, but I suspect it would not really work like that. I suspect that the levy board would still go through the same deliberations and work out what was reasonable to expect the gambling industry to provide, and that a mechanism would be worked out to deliver around £75 million. Therefore, the 10.75% of gross horse racing profits that go to the levy would probably be reduced to hit that target. As a consequence, the Bill —clause 4 in particular—would generate no more money for the racing industry. Rather, it would simply mean that the money came from a different mechanism.
Miss McIntosh
Obviously we hope to hear the Minister give the reassurances that we have requested, but the whole point is that—I hope he will confirm this—we have set in place a six-month time frame for the current levy board-led process to come up with a replacement. That is why the Bill, particularly clause 4, is so pertinent and so appropriate at this time, and why we need it on the statute book.
Philip Davies
I understand my hon. Friend’s point, but in some respects she argues against herself. As she says, the Government are looking at this issue—indeed, everybody has been looking. I think even she said in her speech, in passing, that the levy system was broken to a certain extent—everybody starts these debates like this—or that it was not ideal and was not delivering the right outcome. However, it seems rather strange to say, “The levy system’s broken; let’s introduce a measure that entrenches it even more.” I do not quite follow how that is the solution to the problem that she rightly highlights.
I am not a big fan of the levy system either. My hon. Friend the Member for Rochford and Southend East would describe himself as a layman, but he made some pertinent points about other sports and industries being subsidised, and all the rest of it. I certainly do not think there is any justification for that. Really, the levy is something historical, because that is how it started. If we were starting again now, would we have the levy system? Possibly not—I do not know; probably we would come to a commercial agreement—so I am not sure that entrenching the levy system is the solution to the problem that my hon. Friend the Member for Thirsk and Malton identifies, nor would it deliver any extra funding for racing. Therefore, I am not sure that this proposal is worth persevering with, given that it would also add legal complications—again, I accept her point about the legal position as she sees it—that the Government could well do without. I see lots of downsides for the Government in pursuing this proposal; I do not really see any great upside, for the reasons I have given. Therefore, it is probably not worth while persevering with. Again, however, I am sure that the Minister will have a view on that.
Let me return to the point about the levy. There is a slight misnomer—I am certainly not alleging that anybody is trying to mislead anybody when they trot it out—that can give a false picture, which is the idea that the levy is essential for the small trainers, the small owners and the small breeders, whom we have got to support, and that without the prize money the levy generates, they would go under. I do not think that that is the case. If we look at the figures more closely, we can see that it is not quite as simple as that. There is an element of that involved: the levy board supports fixtures at the bottom end that might not otherwise be viable, and I am not going to decry that, but that is not the only destination for the levy board’s money. It might not even be where most of it goes; I am not entirely sure. It would be interesting to have a breakdown of where the board’s funding goes, so that we can see whether it represents a sensible way of diverting resources.
As I said, a very high percentage of prize money in this country goes to a very small number of people, including the top owners and the top trainers. In effect, we are asking for money to be transferred from poor people in betting shops—they are the ones who pay the levy, after all; it is the punters, not the companies, who are paying in one form or another—to wealthy racehorse owners. That set-up represents a strange redistribution of wealth, and it is not one that I recognise. There are not many calls in the House for the very poorest to pay more to the very wealthiest people in the world, but the levy, in essence, brings about just such a transfer of wealth. I do not think that that arrangement stands up to scrutiny.
The levy is certainly used to prop up the prize money of some of the top races in the country. I am sorry if I am returning to a subject that you would rather I did not mention, Mr Deputy Speaker, but with the best will in the world, a small owner like me is not going to win the top classic races on the flat. That is simply not going to happen, so I will not benefit from an increase in the levy. The people who win that kind of race are Sheikh Mohammed, the Coolmore stud in Ireland and the new people from Qatar, who are a welcome addition to the racing industry. It would be stretching the imagination to suggest that any of them were struggling to get by, based on what they have at the moment. We cannot pursue that particular avenue too far. We should be careful about what we say the levy is used for; it is not used just for the purposes that my hon. Friend the Member for Thirsk and Malton claims it is.
The figures that my hon. Friend gave earlier rightly showed how the levy had reduced over the years. My hon. Friend the Member for Bury North was right to point out that it had stabilised and started to move back up again, and I am sure that everyone is happy about that. It is not right, however, to say that the only contribution that bookmakers make to the racing industry is through the levy. In recent years, for example, they have been asked to pay a vastly increased contribution to race courses for picture rights. That money is going to the race courses and the media companies.
I accept where my hon. Friend the Member for Thirsk and Malton is coming from and what she wants to achieve, and I would like to think that there is no greater supporter of horse racing in the House than me. It is my great passion in life—to be perfectly honest, it is a greater passion than politics—and I want to see the horse racing industry thrive. My point is, however, that the money that bookmakers pay for the racing product is not being efficiently passed down the racing food chain. A lot of it gets stuck with the broadcasters who are supplying the pictures, for example. Perhaps we could explore the possibility of finding a better mechanism for getting the money from the broadcasters down into the racing industry, as my hon. Friend the Member for Thirsk and Malton wants to do. It is also possible that the race courses are piling up the money from the picture rights and not passing it on in prize money.
Food Prices and Food Poverty
Debate between Baroness McIntosh of Pickering and Philip Davies(12 years, 10 months ago)
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Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate the hon. Member for Wakefield (Mary Creagh) on calling the debate. In welcoming it, I draw attention to my declaration in the Register of Members’ Financial Interests. However, there are many other issues that the hon. Lady could have mentioned, which exercise those who live in rural communities. I recognise that Wakefield may not be quite as rural as Thirsk, Malton and Filey, but if we consider poverty among the farming community over the past 10 years, particularly in small upland farms, it is fair to say that farmers are not in a position to employ many outside their own family. Normally the farmer, his wife and his family work on the farm, and that has led to diversification when possible. In some of the most successful examples, such as Shepherds Purse cheeses and Get Ahead Hats, the wife has diversified or gone out to work separately.
The hon. Member for Wakefield also failed to tackle the increasingly important issue of farm-gate prices, as opposed to rising supermarket prices. I would like to draw attention to that. In my constituency, I can point to pockets of rural poverty in the Hambleton district. In the Ryedale district there is a poverty gap, for those on low incomes, between their low wages and the particularly high cost of housing.
DEFRA’s farm business income report showed that the cost of fertiliser and animal feed rose by nearly 30% each in 2010-11, the last year for which figures are available. That means that the livestock and horticulture sectors have suffered falls year on year. I draw the attention of the hon. Member for Wakefield to the fact that livestock farm income fell by 29% in lowland areas and by 19% in upland areas, with horticulture income down 27%.
The hon. Lady did not consider exchange rates, which my right hon. Friend the Secretary of State mentioned. What if the unthinkable were to happen and the euro failed—or what if even one member country fell out of the euro? The question being asked coming up to spring in auction marts, particularly in the north of England, where most of the lambs are exported, especially to France, is: how and in what currency will farmers be paid? They are starting to wonder whether they will be paid at all. We had the opportunity to cover some of those issues in today’s debate, and I am disappointed that we did not.
I welcome the debate, but, as my right hon. Friend the Secretary of State explained, we are looking at the high cost of fuel as well as the increased costs of feedstuffs and fertiliser. As the Chancellor of the Exchequer has said on so many occasions, oil prices are set globally. The price of cereals and many farm commodities are set internationally.
I want to focus on the role of supermarkets, and particularly the part of the motion that deals with the groceries code adjudicator. I draw the House’s attention to a successful one-off evidence session that the Environment, Food and Rural Affairs Committee held. The hon. Member for Wakefield has included kind words about the Committee in her motion. At the evidence session I was very moved by a category of people to whom, again, the hon. Lady did not refer—individual fruit and vegetable growers and horticultural growers, who have the loosest possible arrangement with supermarkets and virtually no protection. We were shocked to realise that their contracts could be terminated at a moment’s notice. They need protection and the ability to make a complaint anonymously. As we said in the letter that we submitted to the Chairman of the Business, Innovation and Skills Committee:
“For many years there has been a ‘climate of fear’ in the groceries supply chain. We therefore endorse the provision in the draft Bill that will allow the Adjudicator to receive anonymous complaints from direct or indirect suppliers about retailers breaking the Groceries supply Code.”
I hope some good can come out of today’s debate and urge my right hon. Friend the Secretary of State to use her good offices to put pressure on the Secretary of State for Business, Innovation and Skills; that is the responsible Department.
I commend all the Committee’s conclusions without hesitation, but I shall draw attention specifically to two of them.
Philip Davies
My hon. Friend will know that the vast majority of suppliers to supermarkets are, by definition, huge organisations—multinational companies such as Mars, Coca-Cola, and Proctor and Gamble. Does she think that they need the protection of a grocery ombudsman, or does she agree that they are more than big enough to look after themselves?
Miss McIntosh
I am so fond of my hon. Friend that I have great difficulty in saying that I must draw his attention to the remarks I have just made. His big organisation—Asda—is revered in north Yorkshire because it stemmed from Associated Dairies, which not only set the price but provided a market for local milk suppliers. Individual growers need protection, because they are unable to speak for themselves. We all have big constituencies and may not always be aware of such individuals. I hesitate to say whether big companies are “good guys” or “bad guys”, but Asda and Morrisons source a lot of their food locally—almost 80% or 90%. We need to protect the small individual growers.
The Environment, Food and Rural Affairs Committee believes that two of its conclusions could have an impact if the Secretary of State for Environment, Food and Rural Affairs can persuade the Secretary of State for Business, Innovation and Skills to amend the draft Groceries Code Adjudicator Bill. First, the ability of suppliers to make anonymous complaints is fundamental to the success of the groceries code adjudicator. Secondly, the adjudicator should have the power to launch investigations. We are all agreed that he should have the power to fine, but he should also have the power to launch investigations.
Horse Racing Levy
Debate between Baroness McIntosh of Pickering and Philip Davies(13 years, 10 months ago)
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Miss Anne McIntosh (Thirsk and Malton) (Con)
As this is the first debate in which I have participated in my capacity as the newly elected Member for Thirsk and Malton, it would be remiss of me not to pay tribute to my predecessor in the Ryedale and Filey part of the constituency. John Greenway was a stalwart of the racing industry, and the immediate predecessor of my hon. Friend the Member for Tewkesbury (Mr Robertson) as one of the co-chairmen of the all-party parliamentary racing and bloodstock industries group.
The new constituency resulting from the marriage between Thirsk and Malton and Filey contains 31 trainers with nearly 1,000 horses. Given that each trainer will probably employ one member of staff per 3.5 horses, about 270 people are directly employed by trainers. Obviously that excludes those in ancillary professions, such as vets, and many businesses.
Although the subject of the debate—which I am delighted that my hon. Friend the Member for West Suffolk (Matthew Hancock) has managed to secure—is the future of the horse racing levy, I hope that it will be inextricably linked with the issue of a vibrant future for the horse racing industry per se. As a number of Members have pointed out, the industry is struggling. Trainers in particular feel that they are in severe financial straits. I referred earlier, in an intervention, to the reduction in prize money, and a Member representing a Scottish seat mentioned rising fuel costs. The cost of diesel is at a record high in north Yorkshire, and, as we have already heard, it is pushing up the costs of transporting horses, jockeys and stable lads and lasses to race meetings.
Philip Davies
My horses are trained in my hon. Friend’s constituency. I think that this is the first time that Mr Michael Easterby, who has the pleasure of training them, has been described as being in dire financial straits. However, I am sure that he would agree with my hon. Friend, even if no one else would.
Nearly 50% of betting shops make a profit of less than £17,000 a year. Does my hon. Friend have some regard to their dire financial straits as well?
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.