Horserace Betting Levy Board and Horse Welfare

George Eustice Excerpts

Wednesday 6th December 2023 Westminster Hall

[Yvonne Fovargue (in the Chair)]

I will call George Eustice to move the motion and then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as per the convention of the 30-minute debate.

[George Eustice (Camborne and Redruth) (Con)]

I beg to move,

That this House has considered the Horserace Betting Levy Board and horse welfare.

I am delighted to have the opportunity to discuss this matter. The British horseracing industry is important and successful, and the UK is a global leader in thoroughbred breeding. However, it is also a sector that faces some challenges: some financial and others relating to the growing pressure on the social licence that is necessary for horseracing to continue. Behind episodes such as the invasion of the course by animal rights activists at the grand national last year, there is a broader but far less vociferous public concern about equine welfare linked to horseracing and, in particular, the fate of horses that retire from horseracing. It is my view that activities that depend on the maintenance of that social licence for their continuation cannot take those matters for granted or dismiss such things as the views of animal rights activists. They have to work constantly to improve their approach to animal welfare.

Thankfully for the industry, there are many fabulous charities. In my own constituency, we have Racehorse Relief, which I visited earlier this year. The charity focuses on rehoming retired racehorses through a combination of retraining them so they can be used for riding and pairing them with the right rider who can take care of them properly and, crucially, is able to handle them. The charity maintains an interest in the horses in its care throughout their lives, even when they might be placed with new owners who will ride and take care of them. Yet like any charity—any Member who visits charities will face this—funding is an issue. As we have seen rising costs, particularly for things such as forage, hay and so on, funding has become a challenge for the charity and many others like it across the country.

Last summer, I went on something of a wild goose chase to try to identify the right place to get funding for great charities such as Racehorse Relief. First, I thought I had come up with a brilliant idea: what we really needed to do at a point of policy was to have a levy on the betting companies that make the money from horseracing and then use that money to support charities such as Racehorse Relief, which deal with some of the externalities linked to horseracing and in particular the welfare of retired horses. I was over the moon to discover that I was not the first person to come up with such an idea. Indeed, this House passed the Betting Levy Act 1961, establishing the Horserace Betting Levy Board, which collects a significant budget each year from bookmakers.

At that point, I had spoken to and investigated the Horserace Betting Levy Board and I was told that it tends not to give direct grants to individual charities and makes money available through other organisations that then deal directly with charities. I thought that was fair enough and I understood that. It was suggested to me that I ought to talk to the charity Retraining of Racehorses. That sounded like a perfectly obvious thing to do, because the name is on the tin. As an organisation that retrains and rehomes racehorses, it seemed to be the right place to go.

When I went to Retraining of Racehorses, it too had no money. I understand that a couple of years ago, the horseracing industry carried out a review of what it called aftercare—that is, the charities such as Racehorse Relief that care for horses when they have retired. It was concluded at that point that RoR should be the lead charity in that space. It is fair to say that the board of RoR and the chief executive at the time sensed a hospital pass coming their way with such a recommendation. They feared they would end up with the responsibility and that everybody would be signposted to them to support such charities, but they had no funding to deliver on that.

At this point, it was suggested to me that what I really needed to do was to talk to the Racing Foundation, which was established following the sale—the privatisation —of the Tote. I thought that this was something, that George Osbourne was a clever chap who had it all in hand and was thinking about these things, and that it is the Racing Foundation that makes grants available for equine welfare. I looked on their website and, rather ominously, under the equine welfare sector, it refers to other organisations that might be able to help; there are a multitude of additional signposts to other organisations. On the specific issue of welfare, the Racing Foundation website simply states that there are no more grants available for equine welfare, since it has decided to make all of its support available through another organisation called the Horse Welfare Board.

It is clear that what actually happened here is that, following the RoR’s decision not to become the lead in this space, the industry decided that what it really needed was another organisation—another board—to make sense of all of its boards and to try to join up all the inactivity of the rest of the organisations. I phoned the chairman of the Horse Welfare Board and said, “All signs point to you. Everyone says that they give the budget to you now and that you are in charge of delivering animal welfare and providing support for the aftercare sector”. He chuckled down the phone and said, “We have no money”. The reason for that is that the other organisations do not give any meaningful budget to the Horse Welfare Board; it operates on something of a shoestring. It does some very good work, and I pay tribute, in particular, to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), who I know was instrumental in the setting up of that board—and also sits on it—but it has very limited resources.

In my experience in government, there is a phenomenon that I used to describe as circular signposting, where every organisation points an individual to a different organisation until they eventually end up back where they started. There are lots of organisations that could—and perhaps should—do something that find it too easy to do nothing and suggest that somebody else should do something. When a Minister comes across that phenomenon, there is a very important question they must ask: who has the money? In this case, it is very clear that the Horserace Betting Levy Board has the money. It collects almost £100 million a year from bookmakers.

The HBLB was established under the Horserace Betting Levy Act 1961, which was amended by several other Acts. The HBLB is currently principally governed by the provisions of the Betting, Gaming and Lotteries Act 1963. That Act sets out three quite broad criteria for the HBLB to pursue, which are improving breeding, investment in veterinary science, and another incredibly broad provision, which is simply to improve horseracing. That can be interpreted in a very broad way.

[Dr Neil Hudson (Penrith and The Border) (Con)]

I am grateful to my right hon. Friend for giving way, and I congratulate him on securing this important debate. As a veterinary surgeon, I declare my professional interest; in the past, with other veterinary colleagues, I have been in receipt of HBLB research funding. I can therefore testify to the benefits of HBLB funding for advancing veterinary science in education and horseracing. It funds the equine infectious disease surveillance team at Cambridge Veterinary School, which is led by Dr Richard Newton. The HBLB also funds disease surveillance through Rossdales Laboratories at Newmarket and produces the codes of practice for equine infectious diseases. Does my right hon. Friend agree that this excellent work, funded by the HBLB, is vital for the health and welfare of horses, for the UK’s biosecurity, and for the future of a thriving British horseracing industry?

[George Eustice]

I thank my hon. Friend for that intervention. I completely agree that HBLB does some very important work when it comes to veterinary research.

However, I want to focus particularly on the aftercare sector, because that is where the HBLB has been found wanting, in my view, and to continue my analysis of the 1963 Act, which, as well as having quite a broad remit, gives the Secretary of State a clear, direct power—a power that is exercised by the current Minister. Section 25 of the 1963 Act says that the HBLB can carry out any of its activities only “with the approval of” the Secretary of State and “subject to any conditions” that the Secretary of State might choose to put in place. It is a very broad power. It goes beyond the Secretary of State just approving a business plan every three years. There is no need for the Minister to wait for that. The Minister has a very clear power under section 25 to intervene and give a direction at any point that he might choose. It gives him the power to disregard any business plan, should he choose to, and to disregard the views of the horseracing industry or, indeed, the bookmakers when it comes to determining the correct level of the levy collected.

Let us look at the current business plan for the HBLB. What does it do with the £100 million that it has? The short answer is that the overwhelming majority of it, £79 million a year, is blown on prize money. Indeed, its report suggests that during the covid crisis, when the Government made available all sorts of grants to help industries in distress, a £21.5 million additional grant from the taxpayer was given to the HBLB. What did it do with that extra money? It spent it on prize money. Don’t get me wrong; I do not begrudge prizes for winners of competitions. But what is wrong with a cup? Between the wars, my great-grandfather used to do a lot of showing of pigs. He did not get huge amounts of prize money, but he used to win all sorts of wonderful trophies—sometimes outright, by winning them year after year after year. That probably should be enough, because after all, it is often quite wealthy individuals involved in horseracing.

[Mr Laurence Robertson (Tewkesbury) (Con)]

I congratulate my right hon. Friend on securing this debate and I draw the House’s attention to my entry in the Register of Members’ Financial Interests, which does not include horseracing ownership. I am sure that he will agree that the prize money in this country is below that across the world, and very serious issues are coming up because of that. He is of course absolutely right to say how important horse welfare is, but the horserace betting levy money does need to be fairly distributed to ensure the continuation of the sport.

[George Eustice]

I do. I was being provocative in my last comments, because I recognise that in horseracing globally there is a culture of prize money and that the UK is trying to compete with others internationally. But I would contest the point in this way. Why can the industry not find sponsors to help to provide the prize money? Why is it always the animal welfare sector that has to deal with the external costs of horseracing and be expected to go round with a begging bowl, asking for charitable donations, while prize money is deemed to be a right and paid for by the taxpayer?

In conclusion, I have a few key proposals. The first relates to the machinery of government. I have huge respect for the current Minister and his interest in this role, but my view is that responsibility for the HBLB should be transferred to the Department for Environment, Food and Rural Affairs. The reason for that is that DEFRA is the principal Department dealing with other levy bodies, such as the Agriculture and Horticulture Development Board. It has a lot of experience of levy bodies and how to govern them effectively. It is also the Department that has all the veterinary expertise, through the Animal and Plant Health Agency, and it is the Department that tends to have Ministers who have a passion for and an interest in equines.

The second proposal that I would make, recognising that such a transfer would take some time, is that the current Minister and the Department for Culture, Media and Sport should be far more assertive in its approach to the HBLB and not see its role as simply arbitrating on a dispute about what the level of the levy should be or just approving a business plan every few years, but should use its power to direct in section 25 to be very clear that it wants more money to go on animal welfare. Therefore, my final request to the Minister today is that he uses his power under section 25 to tell the HBLB that he expects it to give £12 million a year, out of its £99 million budget, to the aftercare sector. I believe that it can do so by top-slicing the budget and making that £12 million available to the Retraining of Racehorses charity, or to the Horse Welfare Board, or to a combination of the two. He has the power to do that; I seek an assurance from him today that he will act in that space.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

It is a pleasure to serve under your chairmanship again this morning, Ms Fovargue.

I thank my right hon. Friend the Member for Camborne and Redruth (George Eustice) for securing this important and timely debate, and I appreciate the support that he gives not only to horse welfare but to animal welfare in general. As he mentioned, the charity Retraining for Racehorses is in his constituency, and he has been in touch with it about the HBLB. I am also aware of the vital work that that charity does in supporting and retraining former racehorses, which go on to “second careers” in areas such as polo, eventing and supporting equine therapy programmes for humans.

The Government acknowledge the significant contribution that racing makes to our economy. As has been rightly mentioned, it plays a central role in the livelihoods of many people in rural communities. The employment that it supports at racecourses, training yards and breeding operations, and across related sectors, reflects a powerful industry that is respected at home and abroad. It is one that I am keen to understand further through the visit to a training yard that I will make next week.

The Government recognise that British racing is a substantial asset in this country, and we remain committed to supporting it. Horseracing is the second biggest sport in the UK in terms of attendance, and according to the British Horseracing Authority racing is worth over £4 billion to our economy, in direct, indirect and associated expenditure. The public’s love of racing is shown by the number of people who attend flagship race meetings, with more than 200,000 people attending Cheltenham over its four days. On my visit to Newmarket this week, and in discussions that I have had with both the Jockey Club and the Arena Racing Company, I have seen at first hand how important racing is. British horseracing and breeding enjoys a reputation as a global leader and is promoted worldwide as part of our GREAT campaign.

My right hon. Friend talked about the importance of the levy. The horserace betting levy has evolved in step with the betting industry since it was introduced in the 1960s, as he mentioned. The statutory purpose of the levy is to support the improvement of breeds of horses, the advancement or encouragement of veterinary science or veterinary education, and the improvement of horseracing. The Horserace Betting Levy Board’s expenditure covers those three statutory purposes, all of which support horse welfare to some extent. That is evident in the goals set out in the board’s three-year business plan, one of which is to drive high-quality care and support for horses involved in racing. The board is now looking to set multi-year allocations of spend in this area.

In total, the Horserace Betting Levy Board spends around £3.5 million annually on horse-related areas, such as science and educational research, and on a number of horse welfare projects. Over the last 20 years, Great British Racing has invested over £47 million in veterinary research and education, with funding invested by the HBLB and more recently by the Racing Foundation.

The largest proportion of the levy is used to support prize money, as my right hon. Friend mentioned. I will say a bit more about prize money, because there is a misconception that it is about lining the pockets of a few millionaires—the owners of the horses. In fact, prize money is a means of injecting funds into the wider racing ecosystem, through the employment of trainers, jockeys, work riders and a whole host of people in more than 500 training yards who are involved in caring for horses and putting on race days.

The ability for prize money to cover the costs of training is a key consideration for people deciding to enter the industry, which in turn determines the number of horses entered for races. Maintaining the field size is an important factor in staging race days that are attractive to owners and racegoers. This generates prize money, both directly through racecourse income and indirectly through levy board support.

In 2017, the Government extended the levy to online bookmakers and fixed the rate at 10%, so that it no longer had to be negotiated each year. The 2017 reforms almost doubled the amount of levy collected, from £49 million to £95 million, and the levy continues to perform well. Even in 2020-21, with racing suspended for two months, and betting shops closed for much longer, it returned £82 million. The forecast for 2022-23 is £100 million. The principle of a statutory levy on betting activity on horseracing has never applied to other sports. The bespoke arrangements for horseracing reflect the unique and interdependent relationship between betting and racing, and are in line with international precedents in other horseracing jurisdictions.

My hon. Friend the Member for Tewkesbury (Mr Robertson) said we should transfer responsibility to DEFRA. Our Department works very closely with DEFRA, which leads on animal welfare—I will say a bit more about that later. However, DCMS oversees the whole of the sporting sector, of which horseracing is a part, and has a strong track record of stewardship of major sporting events. With a wide range of public bodies under the Department’s sponsorship, including other sporting bodies such as Sport England, DCMS is well placed to provide robust sponsorship to the Horserace Betting Levy Board and to ensure that it is meeting its statutory requirements.

The support the Department has provided to the sector can be seen in the support given during the pandemic, as my right hon. Friend the Member for Camborne and Redruth mentioned. A loan was provided and work was undertaken alongside other sporting bodies to help sport to resume behind closed doors, and horseracing was the first sport to do so. I hope all this will reassure my right hon. Friend that at DCMS we do have the best interests of horseracing at heart, and it is at the forefront of our thinking.

As my right hon. Friend mentioned, the British Horseracing Association—horseracing’s governing and regulatory body—is responsible for the safety of horseraces at British race courses. Like all domestic and captive animals, horses are afforded protection under the Animal Welfare Act 2006. Under this legislation, it is an offence to cause any unnecessary suffering to an animal, or for an owner or keeper to fail to provide for its welfare needs.

In February 2020, the Horse Welfare Board published “A life well lived”, its five-year strategic plan for the welfare of horses bred for racing. The strategy includes traceability for horses bred for the sport, a strong focus on safety and wellbeing, a more proactive approach to communications, and improved data collection. The BHA has identified 26 projects to drive continuous improvement in equine wellbeing, and £5.5 million has been invested by the Racing Foundation and the Horserace Betting Levy Board into that equine welfare work. That was certainly welcomed by the Government.

The BHA also works in collaboration with the RSPCA and World Horse Welfare to make racetracks as safe as possible. That was seen this year when, for example, the BHA revised its rules for the use of the whip. The new rules include a threshold on the number of times the whip may be used, as well as changes to the markers on all hurdles and fences from orange to white. I am pleased to see, as a consequence of British racing’s investment in safety and welfare, the number of horses that have suffered fatal injuries has decreased.

However, I recognise the points that my right hon. Friend mentioned. He knows that we are currently reviewing the horserace betting levy. The BHA has presented its case that there is a significant gap in its funding. It believes that that means it is unable to compete with jurisdictions such as Ireland and France, as my hon. Friend the Member for Tewkesbury mentioned, and it has submitted suggestions for how to close the gap. We are considering those proposals as we undertake our review, which is due by April. While I cannot pre-empt the outcome of that, I want to reassure my right hon. Friend the Member for Camborne and Redruth that a decision will be firmly based on the evidence.

[George Eustice]

I am delighted to hear that decisions will be based on the evidence in the usual way. Does my right hon. Friend recognise that this juncture, when he is in a position to arbitrate on what the levy should be and potentially to determine what the future business plan should look like, is a moment when he could really effect change? If he felt that I was being too generous to charities by saying they should have £12 million from the budget, maybe a few million pounds a year would be a start. I hope he might consider that when he engages in those negotiations.

[Stuart Andrew]

My right hon. Friend pre-empts what I was just about to say. He has raised some very important points, and, as I am also the Minister with responsibility for charities, I know how challenging the economic climate has been for them, in terms of raising funds and so on. However, we are in regular conversations, and I have regular meetings with the likes of the British Horseracing Authority, and I can assure him that I will definitely raise the issues that he has highlighted at my next meeting, because the welfare of horses that are no longer racing and the sustainability of the charities that he mentioned are very important.

My right hon. Friend alluded to section 25 in the legislation. I need to explore that further, but I give him my commitment that I understand the points he is making. I understand the challenges that those important charities face, and, recognising the current challenges across horseracing as a whole, I will see what I can do to highlight that important issue.