Horse Racing Levy

Catherine McKinnell Excerpts

Thursday 20th January 2011 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Before I talk about the horse racing levy and the impact of its decline on Newcastle racecourse, which is in my constituency, I should declare a non-declarable interest in the matter. The racecourse has a proud place in the history of Newcastle and the wider region, but it also has a prominent place in my life. In addition to my own, less frequent, visits to it, it is arguably where my father spends his happiest times—other than time spent in the bosom of his family, of course. His Christmas present for many years has been a family club-together to buy him an annual pass for the races, and his father’s day gift a subscription to Racing Ahead. We recently celebrated his 60th birthday there in style, enjoying the hospitality offered at the race course. I must therefore declare a strong personal interest for the sake of my father and many like him, who I am sure have a deep fondness for, and interest in, the safeguarding of Newcastle racecourse’s future.

There has been horse racing of one kind or another on Tyneside for the past 350 years. Newcastle’s town moor hosted the first recorded Northumberland plate in 1833 and continued to do so until 1881, when the race moved to the now-famous High Gosforth park. The 812-acre High Gosforth park estate had been bought for £60,000 from Newcastle’s prominent Brandling family to be operated by a

“body of speculators actuated with the desire to promote sport in a proper fashion and get a fair return for their trouble and outlay.”

I believe that that summarises the subject of our debate today quite adequately. The Northumberland plate was first run at High Gosforth park in 1882. It is now an annual event anticipated and enjoyed by many people in Newcastle and across the region.

Like the 59 other racecourses around the country, Newcastle racecourse continues to play an important role in the local economy, providing significant employment and acting as a social, commercial and community hub all year long. The racecourse hosts 30 race meetings throughout the year, and employs 26 full-time permanent staff and as many as 250 casual or part-time staff on race days. All those people are from the local area and rely on that full-time or additional income to support themselves and their families.

As right hon. and hon. Members might be aware, I am a passionate supporter of apprenticeships, which is why I have introduced my ten-minute rule Bill, the Apprenticeships and Skills (Public Procurement Contracts) Bill, which is due to have its Second Reading on 11 February. I am delighted that Newcastle racecourse has recently agreed to take on its own apprentice, through the Essential Partners organisation, which works with local colleges to deliver funded apprenticeships for 16 to 18-year-olds in customer service roles.

Newcastle racecourse, with its regional conference and exhibition facilities, makes a vital contribution to the city’s impressive leisure and cultural offering. This is incredibly important, as the growth of the tourism industry and visitor economy in the past decade or so has been one of the real success stories for Tyneside and the wider north-east region. I hope that Ministers at the Department for Culture, Media and Sport will be aware that the increase in visitor numbers to north-east England has been outstripped only by London in recent years, and that the industry in the Newcastle-Gateshead area is worth £1.23 billion and supports around 19,000 jobs. Let me take this opportunity to invite the Department’s Ministers to visit Newcastle and the north-east—which I believe they have yet to do—where they can sample for themselves the excellent attractions and facilities that Newcastle has to offer the discerning visitor. Newcastle racecourse is one of the highlights of the area.

But I digress, Madam Deputy Speaker. I am sure that hon. Members are aware of the purpose of the horse racing levy. The hon. Member for West Suffolk (Matthew Hancock) set out eloquently the arguments for the levy and for ensuring that there is a fair return, and I will not repeat them. I appreciate that the betting industry takes a very different stance from that of Racing United and the British Horseracing Authority on this issue, but the facts of the matter are clear. The mechanism through which British horse racing has been supported since the 1960s, given the significant profits that it affords the betting industry, is producing rapidly diminishing returns. It is argued that the levy system developed 50 years ago simply does not properly account for modern-day methods of betting on horse racing. I agree with the concern of the hon. Member for West Suffolk that the situation is putting prize money at risk, which in turn could make horse racing less viable, as the levy funds half of all the prize money awarded by the British Horseracing Authority.

[Matthew Hancock]

Is the hon. Lady aware that, over the past year, the contribution from the levy to prize money at Newcastle race course, which she so loves, fell by 41%?

[Catherine McKinnell]

That concern has indeed been raised with me by Newcastle racecourse, but the situation applies across the board. As the hon. Gentleman has pointed out, Britain is, on average, 37th in the world in terms of prize money awarded. That is a matter of great concern. The declining level of the horse racing levy also threatens to jeopardise the safeguarding of the sport’s integrity and standards, veterinary science and education, training programmes and, indeed, the very future of our racecourses.

The impact of the declining horse racing levy and the continued uncertainty about its future were summed up very well by the general manager of Newcastle racecourse in a recent conversation with me. He told me:

“The levy money we receive is hugely important as it underpins our desire to employ more staff, invest in the business and grow the race course in the community. The reduction in the levy means that this is not currently possible and jeopardises our vision for the future. The levy reduction is already affecting our staffing plans for race days in January and February.”

[Nigel Adams (Selby and Ainsty) (Con)]

Over the past three years, the reduction in the levy’s contribution to the industry has been £50 million, which represents a significant sum of money coming out of the industry. Does the hon. Lady agree that we need to act on this matter quickly? My hon. Friend the Member for Tewkesbury (Mr Robertson) suggested delaying a decision for three years, but I am not sure that the industry can wait that long.

[Catherine McKinnell]

I would leave to the Minister’s discretion the question of whether this should involve a gradual process or a more immediate emergency response, but I want to make a plea today for an immediate response on the percentage of the horse racing levy that is going to be contributed this year.

[Mr Laurence Robertson]

Just to clarify the matter, I was not suggesting that a decision should be delayed for three years. I just think that there should be an end date to the statutory levy in order to speed up the examination of other opportunities for funding to horse racing.

[Catherine McKinnell]

I thank the hon. Gentleman for that clarification; that was my understanding of the point he was making in his speech.

I find the words of the general manager of Newcastle racecourse deeply worrying, not only because of the economic implications at a time when Newcastle and the north-east face difficult times as a result of the Government’s cuts but because of the potential knock-on effect on commercial activity and the tourism industry in the region. I would hope, given this Government’s apparent commitment to supporting regions such as the north-east to grow their private sector in order to replace the thousands of lost public sector jobs, that the Secretary of State and the Minister will be equally troubled by what Mr Lane had to say. It is disappointing that we have reached a stage at which the Secretary of State has had to intervene on this issue, but I would urge him to reach a fair and equitable decision on the levy for 2011-12 as a matter of urgency.

For all the reasons that I outlined earlier, it is also vital that British racing is placed on a secure financial footing for the long term, thereby allowing racecourses such as Newcastle that want to continue to thrive, further invest in their business and staff, and provide entertainment and pleasure to people such as my dad, to do so for many years to come. I look forward to hearing the Minister explain how he intends to secure that outcome.