Horse Racing

Lord Spellar Excerpts

Thursday 23rd September 2021 Commons Chamber

[Matt Hancock]

My hon. Friend has made his point very clearly. Thanks to the vaccine, we have been able to reopen racing after more than a year in which there were no crowds—and for 11 weeks in 2020, it was closed altogether. It is thanks to the vaccine that the crowds are back, and long may they remain so. I will avoid the particular issue of the passports question; I know that my hon. Friend feels very strongly about it, and perhaps it can be the subject of the next Adjournment debate.

Let me pick up the economic point that my hon. Friend has raised. Nationally, aside from its contribution of about £4 billion a year to the UK economy, racing as an industry has acted as a bridgehead for significant trade with and investment in the UK. I really want to land this point. Examples include massive investment in business, property and universities by investors who come to the UK because of our racing. As we work to build an outward-looking, international, free-trading global Britain, that investment is vital. In this mission, soft power is incredibly important, and when it comes to soft power, there is little more powerful than horse racing. Through the sport’s historic connection to what could be described as our oldest and most important soft power asset, the monarchy, countries and investors around the world are eager to see and invest in horse racing here in the UK. Our horses compete around the world, are watched on television around the world, and are loved around the world. For instance, Royal Ascot and the Grand National are broadcast to nearly 600 million people in 200 countries annually. We must safeguard and cherish this national treasure. We must not allow horse racing to fall behind in Britain.

Like many industries, racing has been hit significantly by the pandemic. We know that the lockdowns saved lives, and that without them we would have suffered much more, but we also know—and I know—that forcing businesses to close had a significant impact on our economy and on many industries. As I said earlier, in 2020 racing was closed for more than 10 weeks. Thanks to the vaccine, it has been able to reopen, but it is estimated that it lost between £400 and £450 million in revenues. I pay tribute to the Minister’s Department, to the policy officials, to Mark Hicks, the private secretary—he was my private secretary, and an excellent one at that—and to the Chancellor of the Exchequer, for implementing one of the most generous and successful support packages in the world. From speaking to my constituents, I know that without the furlough scheme and the £21 million of funding in the sport winter survival package, the racing industry, and all the jobs of those who work in racing, would have been wiped sideways.

In spite of that great work, however, we still have a significant problem as we come out of the pandemic. Prize money—which is the lifeblood of the industry, enabling owners to generate a return on their investment—has fallen by 20% from 2019 levels. Sales of horses have fallen by over 20%, and more than 60% of major breeding operations are reporting declines in turnover. If we do not take action now, we will be overtaken by countries around the world as the global hub of racing, and we must not let that happen.

[John Spellar (Warley) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests. I congratulate the right hon. Gentleman on securing this important debate for his constituency. Is it not the case that much of the prize money comes from the betting industry, and that that is an important part of the ecosystem? Although we may need to deal with problem gambling, we should recognise that for many gambling is an innocent source of pleasure. He also mentioned the effect of the lockdown. Would it not be much better for the industry to have vaccine passes rather than another lockdown, which would be disastrous?

[Matt Hancock]

I certainly do not want to see another lockdown, and I know that the right hon. Gentleman does not, because he was unenthusiastic about the ones that we had in the past. I do not want to get into the vaccine passport issue, but I agree strongly with what he said at the start, which is that we must tackle problem gambling. I bow to no one in my desire to tackle problem gambling, which I addressed when I was in the Department for Digital, Culture, Media and Sport. At the same time, however, many people enjoy a flutter, and a day at the races is an enjoyable experience that is enhanced for many people by gambling in a completely responsible and controlled way. The symbiosis between horse racing and gambling is important, and I would argue that gambling—especially gambling in person at a racecourse—is a much safer proposition than some of the modern electronic and online offers.

I want to come back to the point about the risk, because we are at a moment of peril—

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Chris Philp)]

I thank the hon. Members who have joined this evening’s Adjournment debate.

I thank my right hon. Friend the Member for West Suffolk (Matt Hancock) for securing and initiating this debate and, indeed, for advocating on behalf of his local industry with such passion and evident tenacity, which I look forward to experiencing again. I am informed by the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), that not only is he willing to accept that invitation to Newmarket but he has already scheduled a trip to Newmarket next week, when he will be meeting members of the horse racing fraternity and, I hope, my right hon. Friend the Member for West Suffolk. Diary permitting, I would be delighted to follow in his footsteps at a later time.

My right hon. Friend is right to highlight the vital contribution of racing to the economy not just in his constituency, where Newmarket and its supporting infrastructure is such a significant employer, but throughout the United Kingdom. As he rightly says, horse racing is the second largest sport in the UK by attendance, employment and annual revenue. According to its governing body, the British Horseracing Authority, racing is worth over £4 billion per annum to the economy in direct, indirect and associated expenditure, much of which is focused on rural areas.

More than 20,000 people are directly employed across 59 licensed racecourses, hundreds of training yards and thousands of breeding operations. As my right hon. Friend said, tens of thousands of additional jobs are supported in the wider rural economy through the supply chain and all the sectors he outlined during his excellent speech. I also agree entirely with the points he made about horse racing’s contribution to the UK’s soft power. Clearly, people from around the world come to the UK to participate and watch our fantastic horse racing meets, and to invest here in stud farms and horse racing yards directly as well. So racing significantly adds to the UK’s international prestige and our global leadership in this industry is something we should cherish and certainly be preserving.

The horse-race betting levy, the topic of my right hon. Friend’s speech, was of course introduced more than 50 years ago, in the 1960s, when the betting industry was somewhat deregulated and placing bets away from racecourses was permitted. At the time, there were fears that people would leave the racecourses and bet on the high street, and the levy was introduced to try to mitigate that risk. Thankfully, over those past 50 or 60 years racing has proved enduringly popular, despite the concerns articulated back in the 1960s. Nothing better illustrates its enduring popularity than the vibrancy of its recovery as we have returned to normal after covid and restrictions on flagship meetings were removed. I understand that attendance at the recent Qatar Goodwood festival this year was close to the figures in 2019, which is fantastic news. Racing was the first sport to return, behind closed doors, after the first national lockdown—I wonder whether my right hon. Friend’s hand may have been behind that move, in some way, in June last year. I am pleased that horse racing has continued without interruption since then. The fact that it has been able to return so swiftly is thanks in no small part to the British Horseracing Authority to incorporate covid measures into the already meticulous protocols.

[John Spellar]

I congratulate the Minister on his appointment. He referred to the outdated view that the interests of bookmakers on the high street, regulated and onshore, were somehow in conflict with those of the racecourses. Should we not, as the right hon. Member for West Suffolk indicated, actually see them in a symbiotic relationship, as part of the same ecosystem, supporting each other?

[Chris Philp]

I was referring to the fears articulated during the 1960s, which of course have subsequently proven not to have come to pass, as the right hon. Gentleman has just said. The horse racing levy is a direct expression of the symbiosis that he refers to: the support that that two industries give one another. The one would certainly be weaker without the other, so I entirely agree with what he just said.

I also wish to reflect on the support that has been provided to racing during the pandemic, which my right hon. Friend referred to. Of course, horse racing has benefited from the economy-wide support that all businesses have received—the rates relief and the support on jobs, through things such as the furlough scheme, which have been provided by the taxpayer. In addition, the horse racing industry, by way of the Horserace Betting Levy Board and The Racing Foundation has also received £28 million in terms of cash flow and hardship support, and £20 million of levy funds were aimed at supporting racecourses, with £8 million from the foundation supporting individuals in the sector. So the sector has received substantial support not only generally, but specifically. Since then, the HBLB has agreed to make additional contributions to prize money until the end of December, which will help to mitigate the lower amounts made available by courses due to covid—this partly addresses the concern that my right hon. Friend raised a little earlier.

As my right hon. Friend said, racecourses are also accessing support through the sports survival package, organised by the sport Minister, the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire, where a £21.5 million loan has been made to the HBLB to enable it to provide extra. The HBLB has earmarked £15 million of that to be distributed via prize money this year, 2021, keeping a further £6.5 million in reserve for 2022. Of course, it has not been a one-way street, because horse racing has given back. It has donated £2.6 million to NHS charities from betting on the grand national, and a great deal of voluntary work has been done as well. I pay tribute to the horse racing industry’s contribution to our country during this time of crisis.

Given that time is pressing, let me address directly some of the requests my right hon. Friend made in his excellent speech. On a review of the horserace betting levy, it was of course reviewed relatively recently in 2017, when my right hon. Friend was a Minister in the Department, albeit not directly responsible for this policy area. In that review, the Government fixed the levy at 10% of bookmakers’ gross profits, to avoid annual negotiations, and based the levy on gross gambling yield—in effect, the gross profit—rather than turnover, so that there was a certain amount of risk-sharing between the gambling industry and the horse racing industry. One could conceive of circumstances in which, for some reason—unexpected events—the gambling yield might go down. That would clearly affect both parts of the sector, which are symbiotic, rather than falling wholly on the shoulders of the gambling industry, which is why the levy was originally constructed in that way.

A review is due to take place in three years’ time, in 2024. I am of course willing to listen to detailed representations if there is a case for looking at it again sooner. I think that the measures that I have set out addressed the issues in respect of covid, but if there are particular reasons why a review ought to be considered sooner, I would be happy to look at detailed representations from either my right hon. Friend or the industry, and I would consider them carefully. Having been appointed only a week ago, almost to the hour, I do not want to race to make any commitments in this policy area, but I will of course listen carefully.