Horseracing Industry

Lord Lipsey Excerpts

Thursday 17th November 2022 Grand Committee

[Lord Lipsey (Lab)]

My Lords, what great timing the noble Lord, Lord Risby, has achieved in securing this debate, because this is the week when, to a fanfare of trumpets, the British Horseracing Authority announced its final agreement to replace the present tripartite and dysfunctional system with a reform designed to stop individual racing interests blocking change. That is a step forward which we can all welcome.

The noble Lord is, of course, a true expert on racing, as a member of the Horserace Betting Levy Board. He will not mind me reminding the Committee that that body exists today only because this House blocked a half-baked scheme cooked up by the Government and racing to hand the whole business of collecting taxes from punters over to a non-accountable body. After this debate, again by a lucky chance, I am off to the 50th birthday party of Alan Delmonte, the chief executive of the levy board—I suspect others here are going too. What a great job he, the noble Lord and their team have done.

I have a few interests to declare. I am member of the Starting Price Regulatory Commission, which oversees the SP, and a past director of the Tote and of the shadow Racing Trust. Much more interestingly, I own or part-own three horses: Lost Connections, who came fourth at Lingfield on Tuesday; Financial Outcome, who won his last two point-to-points; and a baby novice trotter who has not yet run. More significantly, I am also chair of Premier Greyhound Racing, a JV company formed by Arena Racing Company and Entain to supply coverage of the dogs to betting shops and homes. Of course, this afternoon I speak for myself and no one else.

As I say, this is the week of BHA reform and it would be churlish to cavil too much at this welcome change. However, I am afraid I am going to add an ounce of cavil to a pound of welcome. It is quite astonishing how long it has taken for this basic change to happen. I was on the Tote board with Peter Savill when he first started lobbying for change—not exactly this, but change that would have similar effect—20 years ago. Wearing my greyhound hat, I cannot help but compare this pace of change in governance with that in greyhound racing.

We had a big problem in greyhound racing. I was chair of the then British Greyhound Racing Board and the governance was in at least as much of a mess as that of horseracing. The Donoughue committee was appointed. It is sad that Bernard, my noble friend Lord Donoughue, is not here this afternoon to give us the benefit of his advice. He came up with a wonderful report proposing root-and-branch change, which went through in a couple of years. I can say with complete confidence that if he had not produced that report and if we had not had that change, I do not think we would have greyhound racing today, or certainly not on the same scale, with 20 tracks this side of the Irish Sea, three meetings every day for afficionados and punters—the noble Lord, Lord Foster, will forgive me for mentioning punters, about whom his views are well known—and still a position as Britain’s sixth-biggest spectator sport. That shows what you can do with the aid of good governance.

We do not need and do not have a compulsory levy. We have a voluntary levy. A few years ago, I was responsible for brokering an increase in that levy by which bookmakers voluntarily put their money into greyhound racing and in return got a say on how it is spent through the British Greyhound Racing Fund.

One of the things that the new BHA model will want to do is negotiate an increase in the levy. I will say two things about that. First, it would be very unwise to progress this—here I pick up a point from the noble Lord, Lord Risby—until we know the Government’s plans for gambling reform. If they introduce some of the changes that have been advocated—I do not say by the noble Lord, Lord Foster—then bookmakers will take a heavy hit, as will the Exchequer, incidentally. In the light of today’s events, that is something that we would not want to see. The less money that is collected from bookmakers, the less money there will be to go into racing too.

Secondly, I am a sort of economist, and I have my doubts about whether large amounts of the levy going into prize money solves this industry’s undoubted problems. Incidentally, I accept the point about overseas competition for buying racehorses, but it is perfectly clear to me, as an economist, that if you raise prize money people will pay more for horses when they go through the sales ring—and what would you have achieved? You would have lined the pockets of breeders. These unexpected side-effects of half-understood economics have to be borne in mind when we consider the right level for the levy.

That leads me to a proposal. Racing indeed needs a plan, but I am not wholly confident that, even with the new model of governance, it has all the knowledge and understanding that it needs for a robust plan. Of course it will consult, but there is a case for a wider input than consultation alone will bring. Therefore, in my view, racing would benefit from formalised outside help and advice. My proposal is a royal commission—the first one for more than 20 years—on horseracing, including representatives of racing but also outsiders with relevant expertise: an independent economist, a leisure industry expert and someone who understands the betting industry properly, all under a proper heavyweight neutral chair.

I am not soft-minded about royal commissions. The one I was on, on care of the elderly, was a complete shambles, and I signed a minority report to it—so the 20-year gap was probably welcome. But they have something to offer in this kind of circumstance. Give such a body a couple of years and there is every chance that it will come up with a plan worthy of that name to act as a starting point for radical reform of racing that the BHA, the Government and the oft-forgotten punter can get behind.