Horse Racing Levy

George Freeman Excerpts

Thursday 20th January 2011 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

I shall be as quick as I can. I congratulate my hon. Friend the Member for West Suffolk (Matthew Hancock) on securing this important debate and remind us all that thousands of people in the racing industry are watching us closely in the hope that we will be able to contribute to a settlement.

Mid Norfolk is not a racing constituency, but I wish to major on two key points, the first of which is the importance of racing at its grass roots in the rural economy. My constituency is adjacent to Fakenham racecourse, which is a magnificent centre of racing in Norfolk. A large number of my constituents follow racing closely and there is a strong link with the farming community. Through the magnificent West Norfolk Foxhounds and the local point-to-point facilities, racing at its grass roots is embedded in the rural economy and does not exist in isolation.

My second interest is a personal one, and I hope that the House will indulge me. I grew up in and around Newmarket in a racing family. As some of the more senior Members of the House who follow the sport may know, my father stormed to victory in the 1958 grand national on a brave Irish gelding called Mr What. My uncle served for many years as chairman of the then British Bloodstock Agency and my brother trains in north America, along with a large number of people who want to get into this industry, some of whom do not find it that easy. I have spent some time on the back stretch in America and Canada and have seen how different industries around the world are structured.

My hon. Friend referred to the heritage of racing. The fact that racing is not just an industry is an important point. Racing sits at the heart of what it means to be British: people who do not follow racing have surely heard of Red Rum and Desert Orchid; Bob Champion and the story of Aldaniti is a national legend; and Frankie Dettori is a national figure. I defy those who have not been to a point-to-point meeting, to Cheltenham or the Guineas meeting to say different; people are aware of racing and its part in our national heritage and history.

This afternoon, we are principally discussing racing as an industry—as a business. I want to make the point that it is an important national business. At a time when the Government are rightly putting a lot of emphasis on rebalancing the economy and doing everything they can to promote business and growth beyond the City of London, this giant industry is struggling and we would be well advised to help it. It generates more than 100,000 jobs and a turnover of more than £3.5 billion, as well as a huge local underpinning of that through the trickle-down to farriers, vets and those who sell clothing and equipment—all the secondary industries that feed racing.

So what is the problem? The racing industry as we have grown to know and love it is unsustainable. Its financing model is broken. It is incumbent on all of us who care about it as an industry and about our economy to tackle that. My hon. Friend the Member for West Suffolk and others have spoken at more length and with more expertise than I on the nature of the broken financing system. I want merely to point out three things. In France, the return from betting to the industry is, I believe, in the order of €700 million a year, whereas in Britain it is in the order of £30 million to £35 million. The levy contribution to racing is falling from £100 million to £60 million—a huge drop. The return from betting to racing, expressed as a ratio percentage, is about 1%. In Japan it is 5%, and in America 8%. That is an unsustainable platform for the industry that we have a duty to tackle.

The crucial and central point is that those who depend on racing have a duty—and an interest in that duty—to ensure that it is sustainable. Too many people have been taking too much out and not putting enough in. To stretch a metaphor, rather than force-feeding the goose that lays the golden egg, we are neglecting her. The truth is that one cannot push, as the betting industry has, for more meetings—that is totally understandable, as they want more product—and lower prize money. The industry cannot sustain that. That is symptomatic of the situation across a number of fields of modern life and in other sports. We concentrate too much on the top of the pyramid and neglect the grassroots. We neglect the smaller meetings, smaller tracks and smaller trainers and owners that prop up the more celebrated, well known and better off ones at the top. We do so at our peril.

I have spoken to a number of trainers and those involved in racing in the past few days and weeks. A number of them made the same point as my hon. Friend the Member for Thirsk and Malton (Miss McIntosh): with the cost of living and fuel prices rising as fast as they are, a number of smaller owners and trainers cannot even afford to get to the races; it simply does not make sense when prize money is as low as it is. Of course, one group of people who suffer from that underinvestment at the top when horses are winning races, which by definition most do not, are those at the bottom—the often lowly paid stable lads and others who prop up the industry. We cannot properly improve the quality of their lives and incomes without improving the prize money at the top. It says something about the state of the industry when a legend as highly regarded and skilled as Pat Eddery decides that the game is not worth the candle.

Accelerating my speech, I want to support the comments of my hon. Friend the Member for West Suffolk about the importance of some new settlement for the industry. I urge the Minister to take those comments very seriously. I have worked in biomedical research, where intellectual property rights sit at the heart of the industry, protecting the interests of those at the bottom. That concept works well and I commend it to the House. It could give us a chance to create a new settlement for this great industry and ensure that it is sustainable for the generations that follow.