Gambling (Licensing and Advertising) Bill

Lord Cavendish of Furness Excerpts

Tuesday 17th December 2013 Lords Chamber

[Lord Cavendish of Furness (Con)]

My Lords, I apologise to the House and to my noble friend the Minister for not being in my place when he rose. I think I only missed about 30 seconds.

I will not pretend to be an expert on gambling but, having read the debate in another place and heard my noble friend, I do not think I have any difficulty in supporting this Bill and I thank him for introducing it so clearly.

I rise this evening only to draw the attention of your Lordships to one aspect of the Bill that affects horseracing. So much of what I want to say has already been rehearsed, and very ably, by the noble Baroness, Lady Pitkeathley, and my noble friend Lord Risby, that I will try to keep my remarks briefer than I had intended.

I must declare an interest. I am chairman of a small national hunt racecourse in south Cumbria called Cartmel; it is owned by my family. Therefore I know a little about jumps racing and almost nothing about the flat. Perhaps I should add that, in common with so many people involved with national hunt racing, in all the years I have been involved with Cartmel I have drawn nothing in the way of fees, dividends or expenses, but I have helped myself to quite substantial lunches on race days. Of course, if any of your Lordships were to come to Cumbria, I would have enormous pleasure in asking them to join me there.

The horseracing levy is sometimes misunderstood and believed to be some kind of subsidy to racing; it is of course nothing of the kind. Put simply, it was established in 1961 with the power and the duty to collect a statutory levy from the horseracing business of bookmakers and the Tote. In effect, the mechanism was a recognition that betting operators owed something to the racing industry for providing the races on which people liked to bet.

The majority of the levy income is distributed, as noble Lords have heard, by the Horserace Betting Levy Board in direct support of horseracing. That will include improving the breeds of horses, the advancement and encouragement of veterinary science and veterinary education, integrity services and improving horseracing. Overwhelmingly, however, the levy enhances prize money, which in turn generates more levy—and so the cycle goes on.

Parliament’s original intention when establishing the levy was to provide a means of compensating racing for the loss of attendance that was anticipated when off-course betting shops were legalised in 1961. As your Lordships have heard, the levy has decreased sharply in recent years. There are a number of reasons for this but by far the biggest factor in the leakage of levy can be accounted for by the bookmaking industry moving to offshore locations to escape the levy. The consequences of this have been so well described by the noble Baroness, Lady Pitkeathley, that I will not repeat them. Suffice it to say that racing is suffering; racing and all the economic benefits that flow from it are threatened.

The development of offshore remote betting that escapes the levy is of course disadvantageous to racing. It is also unfair to the taxpayer and very unfair on those betting operators who have chosen to remain in the United Kingdom, as well as those companies which have entered into voluntary agreements that mitigate forgone levy payment. The Bill before us will indeed license all remote gambling in Britain at the point of consumption. What it does not do, as has been said, is to make any provision in relation to racing or the horserace betting levy. It is the strong contention of British racing, and my strong contention, that the Bill provides a perfect opportunity to put this right. Here I pay tribute to Mr Clive Efford, who put in heroic work in another place on this subject. The honourable gentleman indeed tabled amendments which, as your Lordships have heard, would have meant that the levy was once more payable by remote betting operators. The Government, again as your Lordships have heard, rejected these amendments on the grounds, I think, that there were concerns in respect of the EU’s stance on state aid. I will return to that in a moment.

The figures on racing and the huge crowds that it attracts speak for themselves but there is more to British racing than the raw statistics suggest. Racing in this country has a long and fascinating history, whose origins stretch back to the very dawn of time when man first saddled a horse—a point which I think was made by the noble Viscount, Lord Falkland. It is not given to many and it is not, I say with some sadness, given to me to really understand the extraordinary, some would say almost mystical, relationship that has developed over time between the two species of man and horse. I see it and observe it. I talk to people who have the gift and rather wistfully admire it, while feeling a little excluded.

If I may divert for a moment, the closest I ever came to sensing that myself was when, many years ago, I was part-owner of a wonderful mare. One dark afternoon, I watched her run in absolutely vile conditions on a northern track—not my own. It was a good race and attracted good horses, and my mare drifted out in the betting. Sure enough, she struggled to keep up with the field and a mile out, I could see that she looked tired and outclassed. Quite suddenly, coming round the final bend, she gathered herself and headed with visible courage and determination through the driving sleet to win by a short head. She was what is known in racing terminology as a genuine horse. It was impossible not to be moved by the shared triumph of jockey and horse.

I relate that incident because it is one of many thousands that happen every year which make British racing the great romance that it is: the romance that brings men and women of all backgrounds to the racetrack; the romance of town meeting country in the fellowship born of shared interests and pleasures; the romance that causes—in jumps racing, at any rate—thousands of people to support racing through attendance, sponsorship and, especially, ownership with no expectation whatever of seeing a return on their money. I think even those who have no interest in racing would accept that the sport is a valuable and much loved part of this country’s heritage.

On my own little track in Cumbria at the attractive village of Cartmel, we race over seven days. Even there, we welcome 70,000 visitors, many from overseas. We cater especially for families and there is a funfair in the middle of the course. On one of our festival meetings there is a racecourse church service in Cartmel’s lovely priory church where local bookies fervently pray, so they tell me, that favourites will not triumph on the following day. I suspect that we are the only racecourse in England to have a chaplain. We are very much part of the local community and inside the track is home to the cricket club—I think my noble friend Lady Heyhoe Flint would approve of that—the football clubs, the scouts and the agricultural show.

The impact of levy leakage on my track is in line with the problems faced by better known tracks. To spell it out would sound like special pleading. In truth, we are better placed than many because we are so popular and because we have favourable fixtures. I speak in support of racing in general. Former sports Minister Mr Gerry Sutcliffe also contributed with distinction to the debate in another place. The honourable gentleman predicted that the issue would be heavily debated in your Lordship’s House, given,

“the horse racing fanatics that are in the House of Lords”.—[Official Report, Commons, 19/11/13; col. 141.]

I cannot imagine who the honourable gentleman had in mind. The noble Viscount, Lord Falkland, hardly fits that description, nor do my noble friends Lord Astor and Lord Risby. I do not think the noble Baroness could be described as a fanatic. Sadly I fear that many of our best fanatics have moved on to pastures new, or fresh gallops. I am just a supporter of racing but I hope the Minister can help this evening.

In the course of this Parliament, British racing has received numerous commitments from the Government that they will fully reform or replace the levy which, in the view of the then Minister in the other place in January 2011, was

“if not broken, in the process of breaking”.—[Official Report, Commons, 20/1/11; col. 1067.]

However, nearly three years later, there has been no material change in this situation, as has been underlined so much this evening. The levy remains ineffective in meeting British racing’s needs and it has required the efforts of both the racing industry and forward-thinking elements of the British betting industry to agree voluntary deals to mask the levy’s inadequacies. This is not sustainable—it is merely a sticking plaster. It is within the scope and remit of this Bill for the levy to be included. Amendments to this effect should be put forward and accepted.

I gave notice, which I hope my noble friend received, of some questions. I urge him to provide a concrete commitment to a consultation early in the new year, as has already been requested, on reform or replacement of the levy to provide a sustainable, enforceable and legally sound solution. Given that my noble friend’s department has also been brooding for some time on the legal position in respect of the recent EU Commission ruling that approved the French parafiscal levy on online horseracing betting, has it reached a conclusion? Might the Government now consider the Efford amendments or something similar as this Bill progresses? Will my noble friend take account of British racing’s own unambiguous legal advice that the collection of levy from remote operators under a point-of-consumption licensing regime does not constitute state aid?

Under this Bill, the Treasury stands to gain substantially. I hope that my noble friend might see that to bring succour to an undeservedly troubled sector, with so slight a change and at no cost to the public purse, can only do good. To do otherwise would be a great disappointment to all of us who have the interest of racing at heart.