Matt Hancock
Main Page: Matt Hancock (Independent - West Suffolk)(13 years, 4 months ago)
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Matthew Hancock (West Suffolk) (Con)
I beg to move,
That this House notes that the horseracing industry supports employment of 100,000 people in Britain and that the racing industry contributes £3.5 billion to the UK economy each year; celebrates the contribution the industry makes to the cultural and sporting landscape of Britain; recognises Newmarket’s role as the global headquarters of racing; but further notes that the horseracing betting levy yield has been falling in recent years; further recognises the changing nature of the gambling industry; is concerned that betting operators are increasingly based offshore and so do not fully contribute to the levy; and considers that the Government should bring forward proposals to improve the system of funding for racing and the relationship between racing and bookmakers before the end of 2011.
I am delighted that we have three hours to debate this important topic, because the future of horse racing in Britain is at stake. This golden sport, which brings together man and beast, flat cap and top hat, the rural charm of Bangor-on-Dee and the pomp and ceremony of Ascot—this jewel in the crown of British sporting culture—faces an uncertain future and immediate and urgent woes.
All is not lost. As anybody who has seen today’s Racing Post knows, attendances are up—racing is the second most attended sport after football. Britain’s bloodstock has rarely been of a higher quality, and A. P. McCoy won the BBC sports personality of the year award. However, racing’s finances are at risk, and it falls within the power of the House to support today’s motion, which calls on the Government to act to secure for our nation the future of the sport that is the cause of such pride.
For centuries, since King Charles II took his court to Newmarket twice yearly for a month of relaxation and raucousness, Britain has led the world in horse racing. In the past, racing provided the impetus for the training and breeding of cavalry horses during times of peace, and now it supports more than 100,000 jobs across the country and, in all, £3.5 billion of our economy. It contributes to our culture, and even to our language.
In Newmarket alone, 5,000 jobs are related to that town’s place as the global headquarters of the sport—not only owners, trainers and champion jockeys but modestly paid stable staff, grooms, farriers and those performing all the ancillary services. That complex economy, like an ecosystem, is in delicate balance, and that balance is under threat.
The levy system set up 50 years ago is broken, and the funding that underpins racing is seeping through the holes in that outdated system. I shall briefly set out what has happened, why, and what should be done about it. To explain what has happened, I shall delve into the ecosystem that I described. Money comes into racing from punters who like to punt and owners who like to own. The Tote, which was set up by racing, not by the Government, adds to the pot, and I look forward to its future being secured with the appropriate recognition of racing.
Money comes in from people who spend a day at the races, from media rights and from the levy contributions of those who make a bet. That, in turn, feeds into prize money, which goes partly to jockeys and stable staff—we should always remember that they, too, benefit when their horse crosses the line first—but mostly to owners. It is that hope and aspiration, the golden bauble of the pot of money at the finish post, that attracts owners into the industry and lures them to race. Say it quietly, but the amount of money injected by owners actually outweighs the amount that they win back in prize money by a ratio of about 3:1. If my father-in-law is watching, I hope he takes note of that. Owners, in turn, use their money, some of which they have won back in prize money, to pay horsemen to train and breed bloodstock.
There are many reasons to own a racehorse, as some Members know.
Matthew Hancock
Well, it is not only the triumph of hope over expectation but the glamour of the winners’ enclosure and the thrill of the race. Without the chance for owners to win prize money, racing’s finances are on tenterhooks. Prize money is at the core of racing’s economy—it is the chlorophyll in the ecosystem, or some have called it the lubricant of the wheels of racing. It attracts people in and brings in far more money than is provided for it.
What has happened to prize money? Over the past two years alone, the annual amount that the levy has paid has fallen from more than £100 million to £65 million. Prize money from the levy has fallen, too, from £65 million two years ago to £34 million, a drop of almost half. At Worcester, prize money from the levy has fallen by more than two thirds. Even before that precipitous decline, Britain ranked 38th in the world in prize money, miles behind Dubai and Hong Kong but also behind America, Italy, South Africa, Sweden, Australia, Ireland, Germany and Turkey.
The comparison with our nearest neighbour, France, is stark. Maiden race prize money in 2009 at Longchamp averaged £20,000, whereas at Newmarket it was £8,000. At Deauville, average prize money was £20,000, compared with £11,000 at Ascot. We find a similar contrast at the more provincial racecourses. At St Malo, average prize money was £12,000, but at Catterick it was £4,000—for comparable races, prize money in this country is still lower. At Le Lion D’Angers, prize money was £12,000, but £5,000 at Yarmouth.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate my hon. Friend on securing the debate. I am closely following what he is saying. What impact has the additional number of race meetings through the year had on prize money?
Matthew Hancock
That is an extremely important point. The amount in the prize pot is falling, but the number of races is expanding, and it is doing so at the behest of the gambling industry, which understandably wants continuous racing throughout the year. Those two dynamics make the consequences for the racing industry even worse, because the amount of prize money that owners get for coming second or third in a race is small, which leads to an even greater problem for people who run their horses. That is an important point.
British trainers are being diverted from running and owning in Britain to France and further, which threatens not only those moving their horses, but the breeding industry in this country, which is undoubtedly the best in the world. Without that first-rate racing, the industry will not survive here for long—it will decline—but it has taken decades to build up Britain’s reputation as the best place for training and breeding bloodstock.
Pete Wishart (Perth and North Perthshire) (SNP)
I, too, congratulate the hon. Gentleman on securing this important debate. I am glad that he mentions transport and travel. Friends of Scottish Racing is concerned about the distances involved in getting infrastructure to race courses such as Perth and the additional costs that must be met by owners and trainers. Has he considered that in the context of the future of the levy and horse racing throughout the UK? What would he say about some of those difficulties with travelling distances?
Matthew Hancock
That is an extremely important point. I was speaking to a successful and wise trainer yesterday who told me that trainers will often not send horses to race in Scotland unless another horse goes on the lorry. Of course, that takes out runners, which does not help the gambling industry—it is a circular process.
I received a phone call yesterday from a Mr Staddon, who owns five horses. He took one to Hereford last week. It jumped all 19 fences and came third. Hon. Members might think that that is pretty good, but his prize money was £205, and it cost him £650 to race and travel. He came third, but did not get even a third of his costs back. He is seriously considering giving up. If he takes his five horses out of training, the trainer will have to cut staff, farriers and all the services that go with stables. He fears job losses in racing on a mass scale.
The task is urgent. We know where the money that is made in racing lies. In Britain, there is a 1% return to racing from betting turnover, compared with 5% in Japan or 8% in the US and France. The gambling industry’s gross win on racing is more than £1 billion a year. Yesterday, we were all delighted that William Hill reported a sharp increase in profits.
Mr George Howarth (Knowsley) (Lab)
I congratulate the hon. Gentleman both on the topic that he has chosen and the way in which he is presenting his argument. He accurately describes some of the difficulties, but does he not accept that they exist under the levy, and that it might well be better for everybody concerned if racing and the bookmaking industry came to a commercial agreement rather than fall back on the Government?
Matthew Hancock
The right hon. Gentleman is an astute Member of the House, as I have learned in my short time here, and he nicely anticipates what I am about to say.
Before I address that point, the second question is: why has that decline in the levy happened? There are four holes in the levy through which contributions are leaking: offshore operators, betting exchanges, thresholds and overseas racing. They are set out in the racing united charter, which I urge all hon. Members to sign—they would be joining not only me, but A.P. McCoy and even a member of Abba.
Philip Davies
I commend my hon. Friend for his initiative in introducing this debate. Before he describes the holes in the levy, will he acknowledge that the amount given by bookmakers to racing averaged out, between 2006 and 2010, according to the independent members of the Horserace Betting Levy Board, at £164 million a year—in TV money and levy combined—and that this year it will be £160 million, which is a drop of only 2.5%? Will he also acknowledge that, at the same time, Arena Leisure’s profits increased by 52%? When he is looking at prize money, will he focus less on the betting industry, which still gives lots of money despite the fact that horse racing is a smaller and smaller part of its business, and look at racecourses, which are not passing on their increased income in prize money?
Matthew Hancock
My hon. Friend makes an important point, but his phraseology lets slip the error in the argument. The betting industry gives no money to racing; it pays money to racing. I want a system in which that is sustainable. Of course, people who watch a sport should pay towards it. How much of the money made from media rights gets to the front line of racing is an important question, and I hope that those rights will be negotiated very tightly by racing in future. The amount of levy has fallen from more than £100 million to £65 million, but the levy reflects the fact that when people make bets, part of their stake is a contribution to the cost of putting on that race. It is appropriate for racing to charge bookmakers for using its output and product. That is the nub of the argument.
The first hole in the levy is offshore betting. UK consumers are reported to spend about £2.5 billion on internet and phone gambling, but operators licensed by the Gambling Commission represent less than a quarter of that—the rest is spent offshore. Three quarters of online betting, therefore, does not contribute to the levy or other taxes, and consumers are not protected under UK rules. Ireland’s recent budget began to tackle that, and I hope that the Minister will follow suit. I am sure that such a measure would have the support of the gambling industry. I spoke to the big gambling organisations in the run-up to this debate. Each firm told me that it considered going offshore only because all the others are doing so. Let us bring all those firms onshore and subject bets to the levy and the appropriate tax here in Britain.
Betting exchanges are the second hole in the levy. Currently, exchanges pay 10% of the levy on profits that derive from commission from winning bets on each market. However, that produces very little for the levy—less than 0.5%—compared with the return from the same activity with traditional bookmakers. According to Betfair, some users of betting exchanges place around 1,000 bets per hour, but pay no levy or tax because they close their bets before the race is concluded. I am delighted that Betfair paid around £6 million to the levy last year, and by its widespread sponsorship, but the loss to the levy from the fact that exchanges are treated inappropriately is roughly £25 million, and I urge the Government to act.
Claire Perry (Devizes) (Con)
I congratulate my hon. Friend on securing a debate that is hugely important in my constituency, where we have a lovely combination of free-draining soil, chalk and turf that does not freeze very easily, hence our important training and racing industry. Exchange transactions are frequently concerned with how many goals will be scored in a football match or whether a player will show up, and other things that do not have a cost associated with them and have almost no benefit to the rural economies we are so proud to represent. Does he agree that part of the reason for securing a change to the levy is so that the industries that employ thousands of people and have a material benefit in our rural communities—they are hugely important—can be adequately supported?
Matthew Hancock
My hon. Friend makes her case with the passion to which we have become accustomed.
The third hole in the levy is that outdated threshold rules exempt approximately two thirds of betting shops from paying the full rate. Thresholds were brought in to protect small independent bookmakers, but because the threshold applies to the shop and not to the company, we have a proliferation of corporate betting shops up and down our high street—in Newmarket, we are about to get our 12th. This allows betting shops to profit from fixed odds betting terminals while avoiding some of the levy. Independent members of the levy board say that this threshold error costs racing some £10 million. They think that it should be abolished, and I hope that the Minister will listen.
Justin Tomlinson (North Swindon) (Con)
As the vice-chair of the all-party group on small shops, I have real concerns about the point that my hon. Friend has just made about the threshold. Yes, many such shops are part of the big national companies, but a lot of them are independents. Even those bigger companies could close down many of their smaller shops, leading to job losses and further pressure on the high street and village shopping centres—it would decimate them.
Matthew Hancock
Job losses in the racing industry, if it does not have a secure future, would far outweigh job losses that my hon. Friend mentions. What is more, large corporate betting shops are often split up to have two shops below the levy. It was introduced to protect independent bookies, and we would all welcome it if they were to be protected under a future scheme. But protecting small shops that are owned by large corporates was not the intention.
The charter proposes payments for customers in Britain who place bets on overseas racing. That hole costs some £13 million, and the independent members of the levy board say that that should be closed—I hope that the Minister agrees.
What should we do? In the short term, the Government can keep the ecosystem of racing alive by plugging the holes in the levy, by finding this year in favour of racing in the determination of the levy, and by fulfilling their promise to resolve the future of the Tote in a way that recognises its support for racing. But all sides agree that the levy is broken and needs radical reform. The bookies think that the levy is broken, racing thinks it is broken, the Secretary of State thinks that it is broken, and Members on both sides of the House seem to think that it is broken. No one wants the annual spectacle of ministerial decision about the funding of racing, not least because it unnecessarily antagonises relationships, wastes time and money and prevents a proper commercial relationship between racing and betting. Anyone who has witnessed the ugly and inaccurate adverts in past weeks can see the waste of money.
We need a system that leaves racing and betting to their commercial future and ensures that racing’s product is appropriately financed and protected. Some say that the levy should be abolished and nothing put in its place. They are saying that gambling should get something for nothing. Racing is clearly an input into betting, so of course betting should contribute to the costs of putting on a race. Everyone would like something for nothing, but no one would say that it is the basis for a commercial relationship, which is what the bookies say they are looking for. So let us have that commercial relationship. Let us formalise what it is that racing sells. If someone invented a new cancer drug, would someone else be allowed to replicate it without paying them for the research that went into developing the drug? We have all seen the scary warnings at the start of rented films saying that piracy is a crime. If hon. Members made a film, would they let someone else print off copies of it without contributing to the cost? Of course not.
Charlie Elphicke (Dover) (Con)
We do not have any racecourses in my constituency, but I have many constituents who like to gamble. If they were listening to my hon. Friend’s powerful argument, they would be deeply distressed that the betting industry does not pay its fair share and agree that it should do so.
Matthew Hancock
My hon. Friend is a very wise man.
Racing is no different from other intellectual property. We need a new, fair structure that keeps British racing the best in the world and ensures that those who profit from racing help to pay for racing, so I support a racing right.
Ian Lavery (Wansbeck) (Lab)
I congratulate the hon. Gentleman on bringing this topic to the Floor of the House. The motion requests that proposals are made on the funding of racing, including the levy and commercialisation. Does he agree that, if we have a wholesale review of the funding of racing, greyhound racing should be included, so that a statutory levy could be introduced to fund that sport?
Matthew Hancock
The hon. Gentleman makes an important point, and the relationship with greyhound racing—in which racing has again lost out in recent years—is an important consideration.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Another form of racing that has not had a mention yet, but which is important in this context, is the amateur version—point-to-point. Some 4,000 horses are in training and it has a huge social and economic relevance to this debate. Will my hon. Friend comment on its relevancy?
Matthew Hancock
Most betting on point-to-point racing happens on course, and bookies who go on course pay for the privilege, so there is a transfer from betting to racing there. I adore point-to-point as a good day out and I hope that it is properly financed in future. It needs to be part of the mix, but we should recognise that most of the betting in point-to-point is on course.
Steve Rotheram (Liverpool, Walton) (Lab)
I congratulate the hon. Gentleman on securing this debate. I am not an expert in this area, although I have been contacted by representatives of Aintree race course, home of the world famous grand national, which backs on to my back garden—[Hon. Members: “Oh!”] Not all of it—my garden is not that big. The racecourse primarily sits in the constituency of my hon. Friend the Member for Sefton Central (Bill Esterson). As people will know, Aintree has world class facilities and race meetings. Does the hon. Gentleman agree that the levy is important even to racecourses at the top end so that they can continue to improve the racing that they offer, which will then attract tourism to cities such as Liverpool and contribute wider economic benefits to the sub-region?
Matthew Hancock
Aintree is undoubtedly my favourite jump course, and I spent much of my youth on Grand National days as a fence judge, catching horses with fallen riders, and occasionally putting the riders back on board—the especially brave ones. So I have a particular love of Aintree, and I agree that this issue is important for every racecourse in the country, especially those at the top.
A racing right, which protects the property of a racecourse that puts on an event, would benefit the racing industry. It would benefit the bookies who survive on a strong racing industry with year-round fixtures. Some say go further. I have been contacted by the Football Association and the England and Wales Cricket Board, which support a betting right for all sports—and I understand that the International Olympic Committee also supports it. I can see the merit and logic in that argument. France does it, Australia does it and the Californians are looking at it. But my focus—and the focus of this debate—is unambiguously on racing.
In horse racing, Britain—and my constituency—is the home of one of the greatest sports on the planet. The sleek beauty of the thoroughbred as he crosses the line, the tough determination of the national hunt, the dedication of the horsemen and the great amphitheatres of the crowd all have their future in our hands. I passionately believe in the future of racing in Britain. I ask this: years from now, will we look back in wonderment at this sport of beauty and skill and speed that fell into ruin? Or will we say that, in the nick of time, we gave this great sport we love the future that it deserves?
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Before I talk about the horse racing levy and the impact of its decline on Newcastle racecourse, which is in my constituency, I should declare a non-declarable interest in the matter. The racecourse has a proud place in the history of Newcastle and the wider region, but it also has a prominent place in my life. In addition to my own, less frequent, visits to it, it is arguably where my father spends his happiest times—other than time spent in the bosom of his family, of course. His Christmas present for many years has been a family club-together to buy him an annual pass for the races, and his father’s day gift a subscription to Racing Ahead. We recently celebrated his 60th birthday there in style, enjoying the hospitality offered at the race course. I must therefore declare a strong personal interest for the sake of my father and many like him, who I am sure have a deep fondness for, and interest in, the safeguarding of Newcastle racecourse’s future.
There has been horse racing of one kind or another on Tyneside for the past 350 years. Newcastle’s town moor hosted the first recorded Northumberland plate in 1833 and continued to do so until 1881, when the race moved to the now-famous High Gosforth park. The 812-acre High Gosforth park estate had been bought for £60,000 from Newcastle’s prominent Brandling family to be operated by a
“body of speculators actuated with the desire to promote sport in a proper fashion and get a fair return for their trouble and outlay.”
I believe that that summarises the subject of our debate today quite adequately. The Northumberland plate was first run at High Gosforth park in 1882. It is now an annual event anticipated and enjoyed by many people in Newcastle and across the region.
Like the 59 other racecourses around the country, Newcastle racecourse continues to play an important role in the local economy, providing significant employment and acting as a social, commercial and community hub all year long. The racecourse hosts 30 race meetings throughout the year, and employs 26 full-time permanent staff and as many as 250 casual or part-time staff on race days. All those people are from the local area and rely on that full-time or additional income to support themselves and their families.
As right hon. and hon. Members might be aware, I am a passionate supporter of apprenticeships, which is why I have introduced my ten-minute rule Bill, the Apprenticeships and Skills (Public Procurement Contracts) Bill, which is due to have its Second Reading on 11 February. I am delighted that Newcastle racecourse has recently agreed to take on its own apprentice, through the Essential Partners organisation, which works with local colleges to deliver funded apprenticeships for 16 to 18-year-olds in customer service roles.
Newcastle racecourse, with its regional conference and exhibition facilities, makes a vital contribution to the city’s impressive leisure and cultural offering. This is incredibly important, as the growth of the tourism industry and visitor economy in the past decade or so has been one of the real success stories for Tyneside and the wider north-east region. I hope that Ministers at the Department for Culture, Media and Sport will be aware that the increase in visitor numbers to north-east England has been outstripped only by London in recent years, and that the industry in the Newcastle-Gateshead area is worth £1.23 billion and supports around 19,000 jobs. Let me take this opportunity to invite the Department’s Ministers to visit Newcastle and the north-east—which I believe they have yet to do—where they can sample for themselves the excellent attractions and facilities that Newcastle has to offer the discerning visitor. Newcastle racecourse is one of the highlights of the area.
But I digress, Madam Deputy Speaker. I am sure that hon. Members are aware of the purpose of the horse racing levy. The hon. Member for West Suffolk (Matthew Hancock) set out eloquently the arguments for the levy and for ensuring that there is a fair return, and I will not repeat them. I appreciate that the betting industry takes a very different stance from that of Racing United and the British Horseracing Authority on this issue, but the facts of the matter are clear. The mechanism through which British horse racing has been supported since the 1960s, given the significant profits that it affords the betting industry, is producing rapidly diminishing returns. It is argued that the levy system developed 50 years ago simply does not properly account for modern-day methods of betting on horse racing. I agree with the concern of the hon. Member for West Suffolk that the situation is putting prize money at risk, which in turn could make horse racing less viable, as the levy funds half of all the prize money awarded by the British Horseracing Authority.
Matthew Hancock
Is the hon. Lady aware that, over the past year, the contribution from the levy to prize money at Newcastle race course, which she so loves, fell by 41%?
Catherine McKinnell
That concern has indeed been raised with me by Newcastle racecourse, but the situation applies across the board. As the hon. Gentleman has pointed out, Britain is, on average, 37th in the world in terms of prize money awarded. That is a matter of great concern. The declining level of the horse racing levy also threatens to jeopardise the safeguarding of the sport’s integrity and standards, veterinary science and education, training programmes and, indeed, the very future of our racecourses.
The impact of the declining horse racing levy and the continued uncertainty about its future were summed up very well by the general manager of Newcastle racecourse in a recent conversation with me. He told me:
“The levy money we receive is hugely important as it underpins our desire to employ more staff, invest in the business and grow the race course in the community. The reduction in the levy means that this is not currently possible and jeopardises our vision for the future. The levy reduction is already affecting our staffing plans for race days in January and February.”
Mr Foster
I am grateful to the hon. Gentleman for reminding me of why I raised the point. There has to be clarification. Personally, having studied the various issues in some detail, I do not accept the definition that we just heard from him. Incidentally, even if he is right, which I do not believe he is, it would not threaten the levy as it was already in existence way before the establishment of those rules. There would not be a problem.
Matthew Hancock
My hon. Friend the Member for Shipley (Philip Davies) mentioned the European Commission’s view of the French system, but would it not be better to look at the view of the British system? The levy board does not define the levy as state aid precisely because it is a transfer between two industries. Moreover, a racing right would establish a property right on which our whole constitution is based.
Mr Foster
Since we are getting into this topic, I shall go into a little more detail and omit some other parts of my speech. Having looked at the issue, it is clear to me that levy grants and loans are not paid by the state; by definition, therefore, they are not state aid and they are not provided through state resources. They do not impose a selective advantage; they do not distort or threaten to distort competition; and they do not affect trade between EU member states. On all criteria, this does not amount to state aid.
I hope that we can sort out three things when we come to finding a sustainable future. The first is the offshore issue. I have long argued that we have to do something about that and I was delighted that the hon. Member for Bradford South (Mr Sutcliffe), when he was the excellent Minister with that responsibility, instituted consultation on the issue. I want to see a situation where any firms or organisations regulated offshore—whether they be in the European economic area or are white listed—that want to advertise within the UK must have a secondary licence, which would require them in turn to contribute to the levy and to research, education and treatment for gambling addiction. I hope that we can resolve that issue.
Secondly, we need to resolve the issue of betting exchanges. They cannot be allowed to get away with having no involvement in the levy. As other hon. Members have said, however, I welcome it when some of those organisations make voluntary contributions.
Thirdly—a totally separate issue that is also important—I believe that we need to support our bookmaking industry, particularly the small independent firms that are losing out. I believe that the current charging regime of the Gambling Commission penalises them unfairly. I am worried that the current threshold, which was designed to help them, does not in fact do so, because each individual shop within a large chain reaps the benefit, rather than the small independent bookmakers. The levy board has proposed that we should remove the threshold, but I hope that we will not remove it, but reform it to provide more benefit to the small independent bookmakers.
We need to move forward rapidly, but the deal must be done between the two mutually related independent bodies—the racing industry and the gambling industry.
Ian Austin
I shall come to our views shortly. Our role at this point, four and a half years away from an election, is to listen to all sides of the argument, as in this debate, and to interested parties outside, and that is what I want to do. Then, at some point, we will arrive at a view. The Government are going to make this decision in the next few months. [Hon. Members: “What do you think?”] I think it is my job to listen to all sides of the argument, to ask the Government questions about their intentions, and at some point—not now, with four and a half years to go until an election—to arrive at a view on this and on all sorts of other issues.
What consideration has the Minister given to ensuring that betting exchanges and the professional bookmakers who use them, but do not pay full tax and levy, make an adequate contribution to British racing, or the same contribution to British racing as the rest of the onshore betting industry?
Several right hon. and hon. Members have queried the threshold rules introduced by the previous Government. Does the Minister believe that those should be altered? Racing argues that payments for customers in Britain who place bets on racing overseas should be reinstated. The betting industry argues that thresholds were previously reduced substantially in exchange for removing the levy on foreign racing, and that it would be odd to charge a levy payable to British racing on events that are nothing to do with British racing. What thought has the Minister given to this issue?
Labour Members recognise the enormous contribution that horse racing makes to Britain and to so many of its communities in so many ways, particularly in rural areas, and we want to see the sport strengthened and placed on a secure and stable financial footing for the long term. Our manifesto promised that as betting on sport increases, we would bring forward measures for consultation on generating a fair return to sport based on a contribution from the profits of the betting industry. We will work with the levy board to ensure that all operators taking bets on British races pay to support British horse racing.
As I have said, the Government have to establish next year’s levy, but we want a wide-ranging discussion that develops proposals to put racing on to a secure financial footing for the long term. We believe that ordinary racing fans want to see racing thrive in Britain, funded by the industry’s profits. We want plans to be developed to reform and modernise the funding arrangements for racing.
The Labour Government made the commitment that half the proceeds from the sale of the Tote would go back into racing. We also want the Tote, under future arrangements, to make a permanent contribution to racing. We want its ownership to be transferred into safe hands to ensure racing’s financial future.
I will conclude my remarks on that point to give the Minister his full 10 minutes. I congratulate again the hon. Member for West Suffolk on securing this debate, and all hon. Members who have taken part in what I have found to be a fascinating and informative discussion.
Matthew Hancock
It has a been a pleasure to hear today’s debate and the passionate declaration of support for the racing industry. I declare my support for, and support from, the racing industry. That passion has shown the value of this Backbench Business Committee debate.
What have we learned today? There is a broad consensus on the need to reform the levy and clear support for the need for a fair return. The Minister joined us in recognising the value of a property or racing right in that respect. For him that was one option, but for me it is the preferred option. We also heard of a previous Minister’s support for a sports betting right, which is significant. Finally, it was a great pleasure to hear the Minister refer in the terms that he did to the impact of offshore betting on the industry. The symbiotic relationship between betting and racing can be improved by a commercial relationship, but only if that is based on what racing has to sell and its right to sell it.
Lastly, the level of support, the fact that speeches have had to be short, and the number of people who have spoken show how important and urgent the issue of the racing levy is. I am delighted that the Minister accepts the motion and that he is prepared to take up the gauntlet—I will ensure that he does, and that it fits when it is finally put on.
Question put and agreed to.
Resolved,
That this House notes that the horseracing industry supports employment of 100,000 people in Britain and that the racing industry contributes £3.5 billion to the UK economy each year; celebrates the contribution the industry makes to the cultural and sporting landscape of Britain; recognises Newmarket’s role as the global headquarters of racing; but further notes that the horseracing betting levy yield has been falling in recent years; further recognises the changing nature of the gambling industry; is concerned that betting operators are increasingly based offshore and so do not fully contribute to the levy; and considers that the Government should bring forward proposals to improve the system of funding for racing and the relationship between racing and bookmakers before the end of 2011.