Horse Racing Levy

Debate between Lord Foster of Bath and Jacob Rees-Mogg

Thursday 20th January 2011 Commons Chamber

[Mr Foster]

I entirely agree, and it is borne out by evidence from the wonderful racecourse in my own constituency of Bath, as it doubtless is by Wincanton, which I was asked to mention by my hon. Friend the Deputy Leader of the House, and indeed by the wonderful course in the constituency of my hon. Friend the Member for Cheltenham (Martin Horwood). That is true because, as we have already heard, since 2003, when the levy brought £110 million into racing, it has fallen to about £65 million. Such a reduction has inevitably had an impact.

[Jacob Rees-Mogg]

I just want to claim a share of Bath racecourse, which I believe is in North East Somerset.

[Mr Foster]

Given the boundary changes, I have to concede that to my hon. Friend. I share the same passion he does for the course’s continued success.

I was explaining that the mutual interdependence has existed for 50 years, but it has become increasingly difficult. It is now critical to find a sustainable future for the link between the racing community and the gambling community. In so doing, we have to remove the involvement of politicians. I entirely agree with the Secretary of State when he said at the end of last year:

“Frankly, the government should never be the last resort in an essentially commercial negotiation”.

A sustainable way forward should not involve politicians, but politicians will have to help find that way forward, which must be based on a number of fundamental principles.

The first principle is to be absolutely clear about what the levy is about. Many hon. Members will have come across a leaflet put out by William Hill, which says under the heading “Real People, Real Jobs”:

“For every additional £1 million that the bookmakers are forced to pay in horseracing levy, 100 industry jobs may be lost for people like this”.

It goes on to provide examples of such people. That is a bit rich from an organisation that has recently moved its internet betting operation—and is soon to move its telephone operation—offshore, losing many hundreds of jobs and about £12 million of tax revenue for the Exchequer. My key point, however, can be seen on the other side of the leaflet, which says:

“Whilst racing can depend on a 1960s state subsidy it will never have the incentive to modernise.”

My clear understanding of the levy is that it is not a state subsidy; it is a relationship between two organisations. It cannot—as some have sought to portray it—be defined as state aid. We must be clear that this is a relationship between two organisations that get mutual benefit from each other. That is crucial to understanding what we are talking about.