Horse Racing Levy

Gerry Sutcliffe Excerpts

Thursday 20th January 2011 Commons Chamber

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

It is a great pleasure to take part in this debate, and I congratulate the hon. Member for West Suffolk (Matthew Hancock) on securing it. As he will know, I was the previous Minister responsible for sport and gambling and, as such, the levy and the relationship between racing and betting are issues close to my heart, and I have sympathy with the Minister and the Department because the issue is back on their desk for them to deal with.

I agree with the hon. Member for West Suffolk that the levy is broken. It has become very divisive, with both sides putting their cases as strongly as they can and perhaps taking their eye off the ball in relation to what is going on in the two sectors. The two sectors are linked—there is no point in saying otherwise—even though the bookmaking and betting industry would say that revenue from horse racing constitutes a lower percentage of its turnover than from other sports. However, the two go together. He might remember the on-course bookmaker pitch problems, which fortunately were resolved through common sense; that common sense has to apply again.

The industry cannot afford to lose the money from the levy, which, as the hon. Gentleman said, has fallen over recent years. The sector cannot rely, and has not been relying, on the levy: it tried the racing for change project, and the various partners that make up racing have been looking to the future. Everybody agrees that the sport is part of the cultural life of our country. Anybody from anywhere can enjoy it at whatever level they want—and they should be able to continue to do so—but the two sides have to come together and, in my view, the solution has to be a commercial one.

What should the Government’s role be? They should try to get out of the levy, if they can, and ensure that something is there to take its place. It has been tried before: in 2006, Lord Donoughue attempted to come up with a solution to meet the requirements. The hon. Gentleman is right to say that time is running out, however, and that we need to sort this out. The betting industry is changing. We have the offshore problem, for example, and I would be interested to hear what the Minister has to say about the review that I commissioned into that and about what might flow from it. Is he able to update the House?

The relationship has to be a commercial one. The nature of betting shops has changed as well, with fixed odds betting terminals now representing more than 40% of their income. The Government should consider what can be done about the FOBTs. The right hon. Member for Bath (Mr Foster) knows that I was looking into that matter—although without great success, I have to say. There needs to be a change in outlook on that.

[Miss McIntosh]

May I place on the record my admiration for what the hon. Gentleman achieved as a Minister in the previous Administration? Does he think that a proposal to replace the levy with a “pound-per-shop-per-race” fee would be feasible? It would raise £90 million a year, but would not address the overseas problem. Does he think that it could work in this country?

[Mr Sutcliffe]

I thank the hon. Lady for raising that issue. Everything has to be considered. As a Minister, I tried to bring the sectors together to hammer out a possible solution. There was a lot of good will on all sides among the bodies represented, but we could not decide on the best way forward, so we had to rely on the levy. That cannot and should not continue, and I would be supportive if the Government decided that this is the last time they should have to determine the outcome of the levy.

I am moving towards the idea of a sports betting right. That is now the way forward. The European Union now has competency for sport, and at the meeting of Sports Ministers I attended last year, the idea of a sports betting right started to develop. If a sport offers its services—with all the costs that go with it—it is only fair that a sports right should be considered in legislation. I think that Ministers will move towards a sports betting right, and I would support that campaign.

[Philip Davies]

May I say to the hon. Gentleman, for whom I have a lot of time, that this is a novel concept for a Labour politician? Most sports betting is on premiership football, so presumably the money raised would go there. It is novel that a Labour politician would want to take money out of poor punters’ pockets in betting shops in order to add it to the wages of John Terry and Carlos Tevez in the premier league. Does that not seem a bizarre redistribution of wealth?

[Mr Sutcliffe]

The hon. Gentleman knows that I am not going to get involved in John Terry’s wages any more—they are not my problem. However, there are issues about where money from sports rights should go, and about the grass roots and how we fund grass-roots sports. However, the money would go not just to the premier league, but to grass-roots sport as well.

[Mr Sam Gyimah (East Surrey) (Con)]

First, I thank my hon. Friend the Member for West Suffolk (Matthew Hancock) for securing this debate. A racing right would ensure that gambling contributes to the upkeep of racing, which—I say this in response to the point raised by my hon. Friend the Member for Shipley (Philip Davies)—is essential if we are to keep racing and to keep Britain ahead, as my hon. Friend the Member for West Suffolk said.

[Mr Sutcliffe]

The hon. Gentleman makes his point, but the gambling industry would say that it already makes a contribution. My Member of Parliament, the hon. Member for Shipley (Philip Davies), is an advocate of what the gambling industry has said about the rights it pays already—television rights, sponsorship and so on.

There has to be an adult relationship and a commercial coming-together. The Tote can help with the way forward. The previous Government made the decision to sell the Tote, and gave a manifesto commitment to give 50% of the money raised from its sale back to racing. I know that defining racing makes that difficult, but it could be a starting point.

[Andrew Griffiths (Burton) (Con)]

The Tote was enacted by a piece of legislation introduced by Winston Churchill. It is true that in their 2001 manifesto the Labour Government made a commitment to giving racing 50% of the proceeds from the sale of the Tote. Does the hon. Gentleman think that waiting nine years and failing to do that had a detrimental effect on the racing industry?

--- Later in debate ---

[Mr Sutcliffe]

I do not think it had a detrimental effect. The hon. Gentleman will know the history. We were trying to relieve ourselves of the Tote while ensuring that 50% of the profits went to racing. The issue then was about the definition of racing and whom it should go to. However, we held active discussions with the racing sector on how that could happen, and I hope that it is still on the table and that the Minister will tell us what the relationship will be and what further discussions he has had.

We need a fair return for racing, for the reasons that hon. Members have given, including its impact on society through full-time jobs in the racing and gambling sectors. I ask the Minister to consider the impact of the FOBTs and what can be done about it. I also ask him to consider what can be done about the offshore problem and the review we commissioned, and about ensuring that 50% of the proceeds from the Tote sale goes to racing. Then, we should get the sector together and make it realise that Governments of all shades are no longer interested in being the referee—it is now about the sector coming up with the solution. I hope that that will happen. This should be an excellent debate.