Draft Horserace Betting Levy Regulations 2017

Lord Garnier Excerpts

Monday 27th March 2017 General Committees

[Philip Davies]

I was presenting as evidence the remarks of a previous Minister; if the Minister would explain why the Department’s legal advice has changed so radically, that would be welcome. Perhaps, when she does, she will explain what will happen if the original legal advice, rather than the latest, proves accurate, and the European Court of Justice comes down on a different side of the fence from the one anticipated.

My second point is about the merits of the levy in the first place. I am astonished at the Labour party and Scottish National party support for it, because we all know that it is taking money from poor punters and giving it to rich owners; it is redistribution of wealth in reverse, so I am intrigued by their support. On the Conservative Benches we are, you will notice, Sir Alan, against subsidies for any industry unless it is farming or horse-racing. People may draw their own conclusions as to why Conservatives are all in favour of subsidies for those two industries but not for others.

The levy figures are clear. Something like 75% of the prize money in the UK goes to about the top 10 owners in the country, so it is a great benefit to Sheikh Mohammed, the Qatari royal family and Coolmore Stud—I am sure they are not really on their uppers. The question is whether we should be subsidising their sport and interests.

I have two more points to make. First, it seems to me that the Government have made changes to the scheme to satisfy the European Commission by extending the levy to the Tote and on-course bookmakers, which were not in the original proposals put out to consultation. Why do not the Government, given that they are now pursuing a policy that they do not support—it was not their original proposal—wait until after we have left the European Union, when they can introduce whatever policy they want without having to refer any of it to the European Commission and risk its going through the European Court of Justice?

Finally, we talk about the amount of money that goes from bookmakers to racing. When the levy started, it was a mechanism to do that. The Government have always been against the levy; they have tried to abolish it, because they think it is a bad system. However, it was a useful mechanism for transferring money from bookmakers to racing when there was no other mechanism for doing so.

I asked the Minister some questions not too long ago about how much money bookmakers give to the racing industry. Racing always wanted about £100 million out of the levy; that was the figure it wanted to achieve—a perfectly reasonable figure. However, let us take 2012 as an example. The levy has gone down since then but media payments have gone up, so the figure is probably still about right.

In 2012, the bookmakers handed over, in levy payments, £74 million. As my right hon. Friend the Member for Newbury said, that has gone down since—I accept that. In the same year, they also gave £153 million in media rights to show the racing in their shops and online, £88 million of which went to racecourses. That figure has gone up considerably since 2012. They also gave £12 million in sponsorship. The total going directly to racecourses from the betting industry was £174 million. However, it cost bookmakers even more than that, given the money taken out with respect to picture rights.

In that year, total prize money in racing, in the UK, was £97 million. If people were asked what proportion of prize money bookmakers in the UK should contribute to UK horseracing, I suspect that some might say half. Some zealots might say all of it. I suspect very few people would think that bookmakers should give virtually double the total UK prize money levels to the racing industry, yet that is what they do every single year. That, to me, seems excessive. The Government seem to be doing nothing to find a way to make sure that the horse-racing industry passes the money down from racecourses to owners and trainers.

If the Government proceed with this, I hope that they do not just try to extract more and more money out of bookmakers, which are actually taking less and less on horse-racing; it is becoming a smaller and smaller proportion of their business. I hope that the Government accept that bookmakers pay a huge amount into racing—I think it excessive, in many respects—and that they find a way to ensure that racecourses pass that money on in prize money, not just to the richest racehorse owners but to those at the bottom. I look forward to hearing how the Minister will say to the racing industry that, yes, the Government will make sure that it gets the money, but that it should make sure that that money goes from the racecourses to the people it is intended to support.

[Sir Edward Garnier (Harborough) (Con)]

rose—

[The Chair]

Sir Edward, give me a second before you proceed. Because of the two Divisions, we can now go on until 6.23 pm—although we do not have to.

[Sir Edward Garnier (Harborough) (Con)]

Sir Alan, I apologise, not only to you but to the Committee as a whole, for my slightly late arrival at the Committee. I will certainly not go on until 6.23 pm or anything like it.

I do not want to have a row with my hon. Friend the Member for Shipley because it simply would not be worth it. However, I do not want him to think that I accept that Leicester Racecourse, in my constituency of Harborough, is at the bottom end of the racing hierarchy. It may not have the cachet of Newbury, which my right hon. Friend the Member for Newbury proudly represents, and it may not be quite like Cheltenham, but it is not a bad racecourse. If this new arrangement enables more racing to be held there, and for there to be better prize money to attract higher-quality racing at the racecourse, so much the better.

I appreciate that my hon. Friend the Member for Shipley speaks with great knowledge of the bookies’ industry. I was also delighted to hear from him that one of his many horses once ran at Leicester, steered by the great Dettori. I look forward to seeing my hon. Friend riding one of his own horses.

[Philip Davies]

No chance!

[Sir Edward Garnier]

“No chance”, he says. There we are—there is a God.

While we are getting excited about what my hon. Friend may think is the unfair nature of this new arrangement on the bookmaking industry, I think it is important that we also discuss the unsung heroes of the racing world who work at and run, shall we say, the less famous racecourses throughout the country.

The last time I went to Leicester Racecourse—last summer, for one of the summer meetings—the number of people working backstage was probably just as great, proportionally, as it would have been at Cheltenham, Newbury or Aintree. However, the cash flow and the money going through that particular racecourse is not nearly as great as at some of the great festival racecourses.

[Richard Benyon]

Does my right hon. and learned Friend also agree that the cost of putting on a day’s racing and complying with all that we now require—on crowd management, health and safety and all of the other good policy changes that have been made for the public’s safety—is extremely burdensome on precisely those smaller courses?

[Sir Edward Garnier]

My right hon. Friend makes the point I was trying to make rather better than I was making it myself; I am grateful to him for having done so.

It is perfectly true that the number of people from the medical services, vets, stewards and other officials now needed to put on a day’s racing is enormous. From the stable yard right the way through to the car park, there are lots and lots of people, all of whom have to be paid, apart from some of the kind volunteers who help out for the love of it. Those are not racecourses that are putting on tens of meetings a year or attracting the greatest of the prize money. Of course, the famous yards that my hon. Friend the Member for Shipley mentioned will no doubt benefit from the regulations, but I hope the money will trickle down and enable racecourses such as Leicester and—is there a racecourse at Hexham?

[Guy Opperman (Hexham) (Con)]

“Is there”? It is the best racecourse in the country!

[Sir Edward Garnier]

Well, there we are. I have achieved publicity for that great racecourse in Northumberland, in addition to the one in Leicestershire.

Even if these regulations lead to an increase in the cash flow coming into the small racecourses by only a small measure, the Government will have achieved a public benefit. I salute the Minister for what she has achieved. I wish this new levy system Godspeed, and I trust that vast sums of bookies’ money will end up in Oadby, the home of Leicester racecourse in my Harborough constituency.