Horse Racing

Matt Hancock Excerpts

Thursday 23rd September 2021 Commons Chamber

[Matt Hancock (West Suffolk) (Con)]

I thank Mr Speaker for granting this debate at what is a critical time for the British horse racing industry. Racing is a sport that means so much to me, not only because I love riding out, but because I have seen the positive impact of horse racing on communities across my West Suffolk constituency and across the country. I am grateful for all the support I have received from racing over the years, and I want to put that on the record. I am also grateful that the Department for Digital, Culture, Media and Sport has fielded not one but two Ministers for this important debate, which shows how seriously the Government take this vital industry.

Racing is the sport of kings, and it reaches all parts and is loved across the land. In fact, racing is the second biggest sport in the UK on any measure—by attendance, by revenue, by employment. Only football surpasses racing on the numbers, but not by grace or beauty. In 2019, before the curse of covid struck, over 5 million people attended racecourses in Great Britain, and experienced the thrill of the turf. From flat cap to top hat, Chepstow to Cheltenham, and Perth to Pontefract, people are working, riding and enjoying racing and all that the sport brings.

Racing is also one of the biggest employers in Britain. The breadth of skill and craft is extraordinary. Think of farriers, vets, stud staff, feed suppliers, saddlers, sales companies, bookmakers, transportation, equine schools, breeders, owners, trainers, jockeys; racing employs directly or indirectly around 80,000 people.

[Jim Shannon (Strangford) (DUP)]

I am pleased to see the right hon. Gentleman participating from the Back Benches—it is always better on the Back Benches. He is right that racing attracts people across the whole United Kingdom. It is also a major contributor to the economy in Northern Ireland. We all know that racing is important in Northern Ireland and, indeed, in Ireland, and this is not just about the jobs. When it comes to the benefits of this wonderful sport, does the right hon. Gentleman agree that the implications of gambling should not be overlooked?

[Matt Hancock]

I do, and I will come on to that point, because it is at the nub of how we ensure that we have a flourishing industry while taking into account the impact of gambling-related harm, which the hon. Gentleman knows is a matter close to my heart. However, it is possible to have policy that leads to a flourishing horse racing industry and the sport doing well that is symbiotic with that. That is what we need to achieve, and I have some suggestions for how we get there.

Newmarket, of course, is the centre of flat racing not just in this country but in the world, and is home to more than 3,500 horses in training. The number of horses in training there grew by 10% before the pandemic, despite falling numbers across the UK. One in three local jobs in Newmarket is related to racing, and 28% of all flat-race or dual-purpose horses in training under licence in the country are trained there. In fact, the success of the racing industry is providing jobs and improving livelihoods throughout West Suffolk, and I know from other Members who have significant parts of the racing industry in their constituencies—my hon. Friend the Member for Tewkesbury (Mr Robertson), who represents the Cheltenham racecourse, is present—that the livelihoods and the jobs, as well as the joy, that come from the sport are paramount.

[Mr Laurence Robertson (Tewkesbury) (Con)]

Let me first draw the House’s attention to my declaration in the Register of Members’ Financial Interests. Does my right hon. Friend recognise that it is important to allow racecourses to recover from the pandemic, and that any talk of vaccine passports would hit the sport very hard indeed?

[Matt Hancock]

My hon. Friend has made his point very clearly. Thanks to the vaccine, we have been able to reopen racing after more than a year in which there were no crowds—and for 11 weeks in 2020, it was closed altogether. It is thanks to the vaccine that the crowds are back, and long may they remain so. I will avoid the particular issue of the passports question; I know that my hon. Friend feels very strongly about it, and perhaps it can be the subject of the next Adjournment debate.

Let me pick up the economic point that my hon. Friend has raised. Nationally, aside from its contribution of about £4 billion a year to the UK economy, racing as an industry has acted as a bridgehead for significant trade with and investment in the UK. I really want to land this point. Examples include massive investment in business, property and universities by investors who come to the UK because of our racing. As we work to build an outward-looking, international, free-trading global Britain, that investment is vital. In this mission, soft power is incredibly important, and when it comes to soft power, there is little more powerful than horse racing. Through the sport’s historic connection to what could be described as our oldest and most important soft power asset, the monarchy, countries and investors around the world are eager to see and invest in horse racing here in the UK. Our horses compete around the world, are watched on television around the world, and are loved around the world. For instance, Royal Ascot and the Grand National are broadcast to nearly 600 million people in 200 countries annually. We must safeguard and cherish this national treasure. We must not allow horse racing to fall behind in Britain.

Like many industries, racing has been hit significantly by the pandemic. We know that the lockdowns saved lives, and that without them we would have suffered much more, but we also know—and I know—that forcing businesses to close had a significant impact on our economy and on many industries. As I said earlier, in 2020 racing was closed for more than 10 weeks. Thanks to the vaccine, it has been able to reopen, but it is estimated that it lost between £400 and £450 million in revenues. I pay tribute to the Minister’s Department, to the policy officials, to Mark Hicks, the private secretary—he was my private secretary, and an excellent one at that—and to the Chancellor of the Exchequer, for implementing one of the most generous and successful support packages in the world. From speaking to my constituents, I know that without the furlough scheme and the £21 million of funding in the sport winter survival package, the racing industry, and all the jobs of those who work in racing, would have been wiped sideways.

In spite of that great work, however, we still have a significant problem as we come out of the pandemic. Prize money—which is the lifeblood of the industry, enabling owners to generate a return on their investment—has fallen by 20% from 2019 levels. Sales of horses have fallen by over 20%, and more than 60% of major breeding operations are reporting declines in turnover. If we do not take action now, we will be overtaken by countries around the world as the global hub of racing, and we must not let that happen.

[John Spellar (Warley) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests. I congratulate the right hon. Gentleman on securing this important debate for his constituency. Is it not the case that much of the prize money comes from the betting industry, and that that is an important part of the ecosystem? Although we may need to deal with problem gambling, we should recognise that for many gambling is an innocent source of pleasure. He also mentioned the effect of the lockdown. Would it not be much better for the industry to have vaccine passes rather than another lockdown, which would be disastrous?

[Matt Hancock]

I certainly do not want to see another lockdown, and I know that the right hon. Gentleman does not, because he was unenthusiastic about the ones that we had in the past. I do not want to get into the vaccine passport issue, but I agree strongly with what he said at the start, which is that we must tackle problem gambling. I bow to no one in my desire to tackle problem gambling, which I addressed when I was in the Department for Digital, Culture, Media and Sport. At the same time, however, many people enjoy a flutter, and a day at the races is an enjoyable experience that is enhanced for many people by gambling in a completely responsible and controlled way. The symbiosis between horse racing and gambling is important, and I would argue that gambling—especially gambling in person at a racecourse—is a much safer proposition than some of the modern electronic and online offers.

I want to come back to the point about the risk, because we are at a moment of peril—

[Scott Benton (Blackpool South) (Con)]

I thank my right hon. Friend for allowing me to intervene, and I draw the attention of the House to my entry in the Register of Members’ Financial Interests. He will be aware of the recent increase in the number of drone pilots that have been spotted at horse race meetings. This practice creates opportunities to bet via the black market during live races. Indeed, recent reports have suggested that the amount betted online via the black market has doubled in recent years to £2.6 billion. This is a practice that the horse racing authorities are working to address. Will my right hon. Friend urge the Government to assist them in trying to stamp out the use of drones at horse race meetings?

[Matt Hancock]

Yes I will, and I can see the Ministers discussing exactly that question right now on the Front Bench. This is another issue that needs to be resolved. It is another loophole in how the sport operates.

Races are put on to allow people to bet on them—they are not only put on for that reason, but it is one of them—and it is therefore important that some of the funding should come back from the gambling to the racing, without which we could not have the gambling in the first place. It is a symbiotic relationship, and that is why there is a place for the Government in ensuring that it is all arranged properly. The problem at the moment is that while gambling revenues have increased during the pandemic, particularly from online gambling, the amount that is going into horse-racing is not sustainable. The risk is that horse racing will increasingly move overseas and that we will lose all these great benefits. That is why we must act.

This is not just about the statistics. This is real. The decisions of only a few significant investors to relocate their investment to other jurisdictions would significantly and permanently damage British racing’s leadership position. We have seen countries around the world, including Ireland, France and Australia, stepping up to back their racing industries more, and if we do not follow suit we will be overtaken as the home of racing. We must not let this happen. Just recently, Shadwell, a major multi-million pound racing and breeding operation, announced that it would be undertaking a review of its activities, with operations in the UK, Ireland and the USA to contract. The extent of any contraction in the UK would have serious implications for jobs, for the economy and, I believe, for our place in the world. This is not just about statistics. It is real. There is an urgency for action, and I know the new Minister is a man of action and ready to act.

In this country, we are in the fortunate position that our recovery is the strongest in the G7. I come not to ask for public funds—although I do not rule that out for the future—but to ask for policy, to ensure that racing gets its fair share from the industries it supports, notably through fixing loopholes in the horse race betting levy. So the Government have a decision to make: step up, save the horse racing industry and reap the rewards of prosperity, jobs, prestige and trade, or step back and lock the stable door after the horse has bolted. Racing is of course part-funded by the levy, which represents the value of horse racing to the gambling industry. The levy provides for the infrastructure of racing and, in part, for the prize money that attracts investors who are crucial to the sport. We must ensure that the levy meets the costs of the racing industry in providing a competitive, compelling betting product from which the bookies benefit. It is failing to do that now. At the time of the last review in 2017, the Department for Digital, Culture, Media and Sport confirmed that the levy would be reviewed by 2024, but earlier if necessary, in order to be

“responsive to future changes in the market”

and to ensure that the yield is meeting the levy’s statutory purposes.

It is clear that the levy’s yield has never met the level of costs envisaged in 2017. There will be an estimated £160 million shortfall in industry revenues between now and 2024. Given the pandemic, an early review is required to ensure the levy is providing an appropriate return both to meet its statutory objectives and to support an internationally competitive British racing industry.

Two changes are needed, and this is what I am asking for. First, the levy should be based on a percentage of turnover, not a percentage of profit. This would result in less volatile yields and remove unhealthy perverse incentives in the sport.

Secondly, and most urgently, the levy should apply to all horse racing globally that is bet on by British customers. Betting customers in Britain can safely enjoy and benefit from horse racing in a wide variety of countries, and British participants often compete in these international events, driving interest and UK betting turnover. However, British racing does not receive a return from betting activity on these races.

An extension of the levy to cover racing overseas would see the levy apply to all thoroughbred races held worldwide, rather than solely races run in Great Britain. This is how it works elsewhere, such as in France and Ireland. This second reform can be quickly and easily enacted and would generate around £20 million annually for British racing. Closing this overseas levy loophole is fair, right, good economics and based on historical and international precedent.

I close by inviting the Under-Secretaries of State for Digital, Culture, Media and Sport, my hon. Friends the Members for Croydon South (Chris Philp) and for Mid Worcestershire (Nigel Huddleston), to Newmarket to see racing in action, from behind the scenes and from the grandstand, so they can see for themselves the huge value of this remarkable sport. I invite them to meet the British Horseracing Authority so that we can work together on the detailed evidence and proposals that have been developed.

I pay tribute to the Government for their support for racing throughout the pandemic. I know the Minister has heard this heartfelt plea on behalf of a sport that so many love, and I will not be letting this drop, so I look forward very much to working with him to ensure British racing can thrive in the years ahead.