Horse Racing (Funding)

Laurence Robertson Excerpts

Tuesday 22nd November 2011 Westminster Hall

[Mr Laurence Robertson (Tewkesbury) (Con)]

It is a pleasure to serve under your chairmanship, Mr Williams, and to follow the hon. Member for Bradford South (Mr Sutcliffe), who works so very hard to try to resolve what are extremely difficult issues. I congratulate my hon. Friend the Member for West Suffolk (Matthew Hancock) on introducing this important and timely debate, and thank him for many of the things that he said.

I want to declare two non-declarable interests. I am joint-chairman of the all-party group on racing and bloodstock industries, along with the hon. Member for Mansfield (Sir Alan Meale), whom I am pleased to see present. With respect to other Members, I also have the honour of representing what I consider the greatest race course in the world—Cheltenham race course, where each year we have the world-famous Cheltenham gold cup. That is one of the greatest, if not the greatest, steeplechases in the world. I am delighted that my hon. Friend the Minister is a holder of one of those gold cups. I know that it is not the tradition of Government to have people who know what they are doing in post, but he is a very welcome exception to that rule.

I can only really endorse a lot of what my hon. Friend the Member for West Suffolk and others have said. In this country, we have what is probably the greatest racing in the world. It is certainly up there with the best, if not the actual best. As the hon. Member for Bradford South said, we had the most fantastic spectacle at Haydock on Saturday, when Kauto Star won against all expectation, providing such excitement in the world of horse racing and in the world of sport. Last year, Tony McCoy—AP McCoy—won the BBC sports personality of the year because of his exploits, yet all that gets overshadowed by the constant wrangling about funding and the constant falling out over the levy—not just the level, but the details.

I agree with my hon. Friend the Member for West Suffolk, who said that that is one of the best reasons for getting rid of the levy. It is divisive. It pits bookmaker against people in racing, whatever racing means in that respect. The levy was finally decided at quarter to 12 on the night of Halloween, which made for an unedifying spectacle. This is a very outdated and impractical system. As has been said, it has also delivered falling revenue. As the hon. Member for Mansfield said, that is important in many respects, not just for prize money, although it is significant with regard to prize money. Prize money is not everything, but it does filter down and find its way to trainers, jockeys and stable staff. It is extremely important not just so the rich can get richer, to coin a phrase, but so that those who work at the bottom can continue to work in the sport. Therefore, it is important to find a better funding mechanism, if mechanism is the right word. I will come on to that.

The principal point made by my hon. Friend the Member for West Suffolk was about how overseas operators are avoiding paying the levy. I do not object to anything he said, but I have quite a bit of sympathy with the point made by my hon. Friend the Member for Shipley (Philip Davies). We have to analyse why people have gone abroad. It is not just because of the levy. To draw a brief analogy, I have the honour of chairing the Northern Ireland Affairs Committee and one recent proposal was for the Northern Ireland Assembly to have the right to set a corporation tax that would be attractive to companies and businesses, compared with corporation tax in the Republic of Ireland. The tax is 12.5% in the Republic and 26% in the UK—a bit of a no-brainer when thinking about where to put a factory or business. We should explore why companies have gone abroad in the first place and consider having the kind of tax regime that attracts them. That is not just about bookmakers; I could expand that argument to all sorts of other businesses, especially in the competitive world in which we live. I therefore hope that that point will be considered.

I have no objection to the proposals that my hon. Friend the Member for West Suffolk made to the Minister, nor indeed to the considerations that the Minister is making, but we ought to think about why businesses went abroad in the first place. The constant pursuit of the exchanges is not healthy for the sport, or indeed for bookmakers, at this point. If we are talking about a levy replacement, let us get on with replacing it. Let us not get on with trying to tinker with the existing levy arrangement. If we do that, all we will end up with is levy mark 2—a similar arrangement to the one we have now, but called something else. I want us to move on from that.

How do we find the future funding for horse racing? That will not be particularly easy. If it were easy, the problem would have been solved a long time ago. We have heard a lot about a commercial solution. In terms of name and concept, I am all in favour of that commercial solution, but I am a little concerned that some of the proposals are not a commercial solution at all, but a rerunning of the levy. We need to avoid that.

There has been a call for any arrangement that is designed and agreed to be underpinned or guaranteed. We have to be very careful over how we go about that. Are we talking about underpinning through legislation? If we are, we have not really moved on much from where we are now. Indeed, we could find ourselves up in the European Court in relation to state aid rules. My view on state aid is that we are an independent country with a Parliament here, and we should do as we will. I would not bow to—[Interruption.] I thought that my hon. Friend the Member for Shipley would agree with me on that point. However, we are where we are at the moment, although we may change those rules in the future, and we do not want to fall foul of state aid rules. Any solution that we reach must be compliant. If the Minister will allow me to say so, we were rather too obsessed with state aid rules when it came to changing the status of the Tote—we gave them far too much credibility—but there is an issue here, no question about that.

[Matthew Hancock]

On the question whether a transfer should be underpinned by legislation, would it not be better in the long term to have it underpinned by contract—by agreement—based on, for instance, a racing right or sports betting right? That could be the basis of a commercial agreement. However, is it not important in the short term to solve the offshore problem, so that we have an appropriate basis from which to go forward to a truly sustainable position?

[Mr Robertson]

Just as many hon. Members anticipated my hon. Friend’s next statement, he has anticipated mine. The arrangement has to be consolidated and underpinned by the civil law, rather than by legislation. I entirely agree with him for a number of reasons, and the state aid issue is one. Another is that, if we are going commercial, we are going commercial—that is the way we should go. I understand his point. We have to bring offshore companies back onshore, but I would prefer to explore that through the way that I have described—perhaps by making it attractive for companies to do business in this country. We may need to go a little further than that, but it should certainly be explored.

On coming up with the commercial solution, I am not entirely convinced that the Government should decide the replacement for the levy. The Government have proposed three options, although I do not suppose that they are the only options that they would consider. However, there are other options that are perhaps not for the Government, but for racing and bookmakers, to put in place.

My hon. Friend the Member for Shipley talked about the increase in media rights. I understand that over the next year, from 2011-12 to 2012-13, they will increase by 26%. That could be considered different from the levy, but when an owner gets his cheque for £5,000 or £10,000, I do not think he is too concerned whether that has come from media rights, race courses, the levy or wherever; he is concerned about the size of that cheque. The whole cake is the important thing, not necessarily which particular segments have come from where.

[Martin Horwood (Cheltenham) (LD)]

I will not take up the Boundary Commission’s strange oversight in not including Cheltenham race course in the Cheltenham constituency this time. What does the hon. Gentleman think of the mechanism of having a requirement for all bookmakers, whether offshore or onshore, to hold a Gambling Commission licence in the UK? That Government proposal has merit, and I think the Jockey Club also supports it.

[Mr Robertson]

I am grateful to the Member for the Cheltenham constituency but not for the racecourse for his intervention. He makes a fair point that needs to be considered. The workings of the Gambling Commission are being looked at, which is a welcome step. That may be a way of tying people in, so that all bookmakers are caught up in the agreement that is eventually reached between racing and bookmakers. I hope that that could be explored.

On the commercial solution, I mentioned media rights. I also mentioned sponsorship, which is rarely discussed, although many bookmakers voluntarily put money into it—not only bookmakers, but many other companies. I am reliably informed by many in racing who are involved to trying to fund the sport that racing does not pursue sponsors and sponsorship as much, as often or as deeply as it could. That certainly needs exploring. It might not necessarily be part of a system or structure, but that money is available. Companies often sponsor more than just one sport: they might sponsor cricket and football and racing. That has to be further looked into.

[Sir Alan Meale]

I agree with much of what the hon. Gentleman has just said, but we still need somehow to extract a price guarantee for the product. I find it difficult to accept that trainers, owners and jockeys will participate in a venture that produces a race for the industry to consume and make money from. Even at the minor level, £1.5 million is bet off-course on every single race, yet we have a scenario, which was referred to earlier, in which the owners and trainers of the race horses do not get enough money, even after winning the race, to provide the diesel and cover the transport costs of getting to the race course. That has to change and we must be given some access to a price guarantee for such people to make it worth doing at all.

[Mr Robertson]

I agree with the co-chairman of the all-party group on that matter. My only point is that the system should be guaranteed commercially and not necessarily underpinned by legislation or by the Government. I agree entirely with his point—I simply do not know how people continue to fund owning racehorses. If they cover their training fee for one month, they have done extremely well. That cannot be done every time—an owner will not win a race each month to cover the training fees, and indeed, they would still be no better off. In this country, the official figure for costs recovered is about 23%, which cannot be sustainable.

My final point on a commercial solution is that race courses, as well as bookmakers, are a big player. I agree with a lot of what has been said by other hon. Members in that there are too many other, bit-part players involved. It might be more polite to say that too many middlemen are involved, which clouds the issue and causes too many problems. Race courses and bookmakers are probably the main players in finding a solution, and we must find that solution. Horse racing is an outstanding sport that gives much pleasure, enjoyment, exercise and discipline to many people each and every day. We must find a way forward to maintain the very high level that horse racing has achieved over many years.