Future of Horseracing

Matt Hancock Excerpts

Wednesday 25th October 2023 Westminster Hall

[Matt Hancock (West Suffolk) (Ind)]

I beg to move,

That this House has considered the future of horseracing.

It is a great pleasure to serve under your chairmanship, Mr Hosie, and to open this debate on the future of horseracing. As we can see by the sheer number of colleagues who have made the time to come today, it is an issue that affects the whole country, and there is a great deal that we need to do to secure the future of horseracing. That is why I was motivated to call this debate.

We all know that British horseracing is essential to this country’s culture, to our language and many of the idioms that we use, to our heritage, and of course to our economy. It means a huge amount to many, many people. Horseracing is the UK’s second-largest sport, in terms of those who watch it and those who go. It provides great joy and excitement. There are 5 million race-goers annually, with almost 100,000 jobs and more than £4 billion-worth of economic activity in the industry. That ultimately means jobs and pay for those who are employed in horseracing. For those on the Treasury Bench, there is more than £300 million in taxation, which I am sure would not go amiss.

There is also a global significance. British horseracing is the pre-eminent horseracing industry in the world, but it is also under significant challenge. Modern technology has improved British horseracing enormously, but ultimately it is the most ancient of sports. As with many other successful things, many places claim to be the first in the world to have horseracing: some in the Gulf, some in the downs of southern England, and also near Chester, where I grew up—there is a case for saying that the first known horserace, or at least the first on which there was betting, was held near Eaton. Of course, betting is integral to the sport of horseracing—I will come to that in a moment.

[Sir Edward Leigh (Gainsborough) (Con)]

My right hon. Friend mentions history, but we believe we have had racing since 1800 in Market Rasen, in my constituency. It depends crucially on betting. Lincolnshire people are sound, sensible and prudent people. The whole future of smaller racecourses such as Rasen is now being put in jeopardy by these affordability tests on betting. I hope my right hon. Friend will give a really powerful speech defending the industry.

[Matt Hancock]

I certainly intend to. My right hon. Friend will be the judge of whether I manage to give a powerful speech, but there is certainly a very powerful case for saying that there is a really serious policy error going on that we need to fix. It is having a really serious impact, especially on the mid-size and smaller racecourses.

I am lucky enough to represent Newmarket, in my West Suffolk constituency, which is home to two of the finest—in fact, the two finest—racecourses in the country. It is the global headquarters of flat racing, and it has grown over the 12 years that I have represented it. It is an incredibly important sport for the whole town, with more than 7,000 people in and around Newmarket employed directly and indirectly in horseracing. It generates over £250 million in my constituency, and obviously attracts thousands of others, positively impacting and supporting local businesses, the hospitality trade and the like. It is also integral to the town. The horses walk through town every morning on the way from the stables to the gallops. As my right hon. Friend suggests, I will speak about the problems that affordability checks have brought.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Of course, Stratford-on-Avon racecourse is one such racecourse that has been adversely impacted. I would really welcome the Minister being cognisant of the fact that there is a problem here, when his Department and the Gambling Commission seem to be peddling what I would only describe as drivel about affordability checks being frictionless or racing not being damaged. Clearly, there is damage being done. On the point about how we support racing globally, there is a straightforward lever that we can pull now on the overseas element of the levy—on bets placed here on overseas racing. It is a no-brainer that we should get that done. I think the right hon. Member promised it back in 2018, and it should happen now.

[Matt Hancock]

I feel very strongly about this subject, not only because I represent Newmarket but because I had the joy of riding in races at Newmarket. I was the first MP in modern times to win a horserace at Newmarket in 2012. Since then, my hon. Friend the Member for Hexham (Guy Opperman), who has been an incredible advocate for horseracing and does jumps, which are much harder, has also ridden winners. He always sends me a photograph of him at the winning post. The Minister should note that the fact that another Minister has turned up to support this debate, even though he cannot speak—[Interruption]—although he can cough—shows the strength of feeling on this issue.

I feel incredibly strongly about this; it is personal to me. It is personal to me for two reasons. First, I represent Newmarket and love the sport; and secondly, I have personally participated. I underwent a weight-loss programme almost as exaggerated as that of the former Chancellor, who has just spoken, my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), in order to do that.

Three things need to happen. The first is the levy reform that I promised as Culture Secretary in 2018.

[John Spellar (Warley) (Lab)]

Before the right hon. Gentleman moves on to the detailed point, there is a slight danger that the debate is becoming very internalised to racing, racing towns and the immediate racing industry. We also ought to acknowledge that this is one of the big attractors to the UK in a broader sense, in the same way as our cultural offer, other sporting events and architecture are. It is part of the whole scene that makes us attractive for inward investment and inward workers. Is it not important for our country, to attract investment and people, to have that broad range?

[Matt Hancock]

I totally agree and could not have put it better myself. That shows the cross-party nature of the work needed to ensure that racing has a bright future, for the reasons the right hon. Gentleman set out and those that I have set out. I completely agree with every word he has said.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Gentleman for securing this debate. He said he would outline three reasons why this is important. Can I add a fourth one? With the costs of stabling and even learning to ride escalating, does he agree that there is a danger that the sport will soon be enjoyed only by the elite? Does he agree that steps should be taken to ensure that people of all classes should have access to the sport and the opportunity to take part? In my constituency, we have that. I hope we can agree that as well in this debate.

[Matt Hancock]

I could not agree more. The hon. Gentleman’s intervention shows that this is an issue for the whole United Kingdom, and for people of all backgrounds across the country. In my constituency, I have Heads of State rubbing alongside those from every background who love horseracing. It brings people together, and we should celebrate that. The hon. Gentleman is right to raise that point.

These are the three issues I want to raise with the Minister. The first is levy reform, which was promised. Critically, although we legislated a decade ago that anyone betting on a horserace through an offshore platform counts for the levy, we should also say that anyone betting on an offshore race counts for the levy. Otherwise, people will be increasingly driven to betting on races that happen overseas, and the international problem is significant. Prize money, which entices people to put horses into GB races, at an average of £16,000 per race, is lower than in Ireland, at £22,000, and France, at £24,000. That is not sustainable.

Levy reform is critical, and it is vital that the horseracing and gambling industries come together, shepherded by the Department for Culture, Media and Sport, and bring forward a strong, credible proposal. I say to those who are in and support the gambling industry that they need people to bet on races—that is, real betting, on unknown outcomes, as opposed to computerised betting on a smartphone, where everybody knows they will lose money if they keep going. Horserace betting is a joy and a pleasure for millions. It is the best way to defend gambling, and supporting the horseracing industry is massively in the interests of the gambling industry.

The second issue, which deeply affects my constituents, is the importance of ensuring that some of the necessary occupations for horseracing are on the Migration Advisory Committee’s shortage occupations list. I have written to the Home Office about this issue and they said, “Speak to the Department for Digital, Culture, Media and Sport.” The DCMS Minister is here today, so this seems an opportune time to raise the issue.

[Sarah Dyke (Somerton and Frome) (LD)]

I thank the right hon. Member for securing this important debate. My constituency, Somerton and Frome, contains Wincanton racecourse, alongside many successful training yards and stud farms—including Paul Nicholls Racing and Joe Tizzard Racing. The industry plays an important role, but it is facing a shortage of workers due to our rural location. As the right hon. Member has said, the Migration Advisory Committee has recommended six horseracing roles to be added to the shortage occupation list, but we are waiting for approval from the Home Secretary. I am sad to see that horseracing has become yet another industry paralysed by these inflexible immigration rules. Does the right hon. Member agree that the Home Secretary should urgently approve these recommendations and help British sport?

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[Stewart Hosie (in the Chair)]

Order. That was a very long intervention.

[Matt Hancock]

I agree that the Home Secretary should sign off on the Migration Advisory Committee’s recommendations; they are based on analysis and fact. If she signs off on them, it shows the system actually working rather than not working. The Migration Advisory Committee has agreed that there is a problem and it is proposing to fix it—and fix it we must.

[John Spellar]

What assurance has the right hon. Gentleman received from the racing industry as to what training programmes they have got going into the future, when they will not need this to be a permanent feature?

[Matt Hancock]

There are significant training programmes already in place in the horseracing industry—for instance, at the British Racing School in my constituency, another British Racing School in Doncaster, and apprenticeship programmes right across the industry. In fact, horseracing is brilliant at taking youngsters, who might not have succeeded in mainstream education, and giving them a wonderful, different career—I know this as a great supporter of those with dyslexia. Horseracing is really good at that and good at the training, but that is not enough; we need to make sure we can hire people from overseas as well.

My third and most important point for the Minister is that the recent gambling review set out to the Gambling Commission the need to ensure that gambling is affordable. Nobody speaks more strongly about the need to control problem gambling than me. As the Secretary of State for DCMS, I brought in the reforms to fixed odds betting terminals, which effectively got their scourge off our high streets. As the Secretary of State for Health and Social Care, I expanded the gambling clinics to ensure that there is direct NHS provision for gambling addiction, which is a very serious problem. However, the way that the Gambling Commission is bringing in these so-called affordability checks makes people move from gambling on reputable platforms into unregulated gambling. That is therefore having the directly opposite effect to the intention.

I understand the intention to tackle problem gambling; I have long supported that goal. The problem here is that, in order to tackle the problem of online games designed to hook people in with an adrenalin rush—and give them a certain loss—instead, those who love to have a flutter at the bookies, online, or at the racecourse are being caught in this net. Many people have already closed their betting accounts because they refuse to give highly personal data to the Gambling Commission—and frankly, I can understand why they have done that. This is already happening. It is happening before the Minister has set out his view. It is happening in response to the White Paper, not to Government policy. It is ultra vires from the Gambling Commission—it is getting this wrong and damaging the very objectives it set out to achieve. The Minister can already act on this by simply setting out that the current way that the affordability checks programme is being put in place is counterproductive. If Members want proof of that, I will give them it.

Research by PwC found that the number of customers using unlicensed betting websites more than doubled in one year, from 210,000 in 2019 to 460,000 in 2020. Billions of pounds are now staked on unlicensed betting websites, which do not have support programmes or any identification of people who might have suddenly lost a large amount of money or who display erratic behaviour. They do not contribute to horseracing in the way that they need to, nor do they offer support for problem gambling. This policy has been a mistake, and the Minister needs to change it.

[Paul Howell (Sedgefield) (Con)]

The right hon. Member talks about illegal betting, and a lot of that comes through the use of illegal drones to film races in the first place, which means that the racecourses do not get any revenue. We need to make sure that there is integrity in the filming of sporting events, so that the revenue goes to the right places. The technology is moving on, and there is illegal use of data through the tools he talked about earlier. We must stop illegal drones and betting sites, and make sure that the revenue is going to the right places.

[Matt Hancock]

I totally agree. That point is another problem that needs to be addressed, and my hon. Friend is right to raise it. All these problems drive down the amount of money going into horseracing, which has two consequences. One is that there is less prize money, which means that there are fewer horses coming forward and that the UK will lose its pre-eminent position, as well as the tax revenues, jobs and prestige that comes with it. For instance, in 2022, the average number of horses competing in a race was at its lowest since records began in 1995. There is a problem that needs to be fixed.

The second consequence is that there is less money for problem gambling programmes, which we know are needed to help the minority of people who have a problem and need support. This is not only ultra vires from the Gambling Commission, but counterproductive to the goals of those who, like me, care about supporting people who have a gambling addiction. The websites to which people are being driven do nothing to promote safer gambling, do not support sports and do not make any contributions to tax, and the intrusive affordability checks happening right now—let alone what might be threatened in the future—are reducing betting turnover. They are impacting on horseracing and on people’s ability to have a flutter on the horses, which is a leisure activity for the vast majority of people who do it.

In a recent survey of over 14,000 punters, 28% said they will stop betting on horseracing altogether if the current plans for affordability checks are implemented in full. That would be a catastrophe for horseracing, and it would be detrimental to the Chancellor’s wish to sort out the nation’s coffers. Most importantly, it means that those who enjoy gambling responsibly—and who do so in what is now a pretty well-regulated overall framework for ensuring that people get the support they need before the affordability checks are put in place—do not have the opportunity to exercise their right to that pleasure.

I will stop there, as I know many people want to speak. I hope to hear cheerful and positive encouragement from the Minister and the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), because our great sport of horseracing needs their support. Critically, we need to make sure that the Gambling Commission supports gambling that people enjoy while also effectively tackling problem gambling, rather than driving people into the darker regions of the internet, where they can get away from any regulation whatsoever. As the Member who represents Newmarket, I am proud to make this case.

[Philip Davies (Shipley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the right hon. Member for West Suffolk (Matt Hancock) on tabling this important debate. I start by declaring an interest: I am a board member of the Racehorse Owners Association. I have been to the races at the kind invitation of a number of people whose names are in the Register of Members’ Financial Interests, and I am a modest owner of racehorses; it would probably be better to say that I am the owner of modest racehorses.

[Matt Hancock]

I completely forgot to also draw the Chamber’s attention to my registered interests. I have been kindly supported by many people from across horseracing over many years. They support me because I make these arguments; I do not make these arguments because they support me.

[Philip Davies]

I am sure that we are all grateful to the right hon. Gentleman for his declaration. Unlike him and my hon. Friend the Member for Hexham (Guy Opperman), I do not seek to ride any winning horses; I just try to back a few, with mixed results. At least when I lose, I know that I am contributing to the levy, as the right hon. Gentleman has encouraged us all to do.

As the right hon. Gentleman said, horseracing is a very successful sport in this country, but it is under increasing threat from foreign competition, particularly from the middle east. Many of our best horses are now sold to race there, where racing is much more profitable than in the United Kingdom.

Whether people like it or not, the vast majority of income for the racing industry comes through betting, one way or another. Owners put an awful lot of money into it without much expectation of return, and I can certainly vouch for that. Betting brings around £350 million a year into the industry. That is much more than the total prize money in the UK. If racing loses that betting income, the problem of horses moving overseas will only get worse. British racing would cease to be the best in the world. That would be terrible for the country as a whole, as well as for individual constituencies.

The right hon. Gentleman was absolutely right to focus much of his remarks on the issue of affordability checks, and I want to concentrate on it in the short time available to me. There is an issue of principle here. Who decides how much people can afford to bet on anything? Who decides what people can afford to spend on anything? We are in an interesting situation where the Government are deciding that people should have an affordability check on their betting, but on nothing else. People who spend a modest amount on betting—for example, those who lose £2,000 over 90 days—will undergo enhanced affordability checks.

I will illustrate how absurd the situation is. A racehorse owner might buy 10 horses, and spend £1 million each year at the sales buying those horses. None of that is subject to an affordability check. They then put those 10 horses in training, and pay fees of around £250,000 a year. None of that is subject to an affordability check. But if they were to spend £2,000 betting on those horses over a 90-day period, they would, at the Government’s behest, be subject to an enhanced affordability check. It is complete nonsense. Surely nobody here thinks that those people should be subject to an affordability check on that basis.

The racing industry worries that people who spend an awful lot of money owning and buying horses, and who enjoy having a bet on their horses when they run, will leave the sport, because that betting part will be at risk if the Government go ahead with their plans. That would be tragic for the racing industry and for those people, and it cannot have been the Government’s intention when they introduced affordability checks.

This blanket number is wrong, and why would it apply only to betting? Why is betting frowned upon to such an extent that the Government want to stick their nose in and find out whether I can afford to spend my money—it is my money, after all—on betting? They do not check whether I can afford to buy a pair of shoes, a coat, a suit or anything else. They want to interfere only if I am betting on anything, including horses. There is an important matter of principle here.

The intention behind some of the rules is ridiculous. For example, if someone loses £2,000 over 90 days, they get an enhanced affordability check, but they can offset only seven days of winnings against that. People’s losses are mounted up over 90 days, but they can offset any winnings made over only seven days. That is absolute nonsense. People could literally win £10,000 on the placepots at Cheltenham in March, go to the grand national at Aintree and lose £2,000, and then have to have an affordability check, even though they are £8,000 up. No account is being taken of how much is won in the previous month or two months—only of what was won in the previous seven days. Those arbitrary figures are ridiculous.

People want proportionate checks. We are basically treating everybody who bets on anything in this country as a potential problem gambler, even though the rate of problem gambling in this country is very low, at about 0.3%.

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[Matt Hancock]

Will the hon. Gentleman give way?

[Gavin Newlands]

I have only a minute or two left, but I am happy to do so.

[Matt Hancock]

I bow to no one in my support for tackling problem gambling. I went toe to toe with the gambling industry by introducing FOBTs as Secretary of State, to its great unhappiness, but is the industry not right on this? The hon. Gentleman just said that the public want action on online gambling, but it comes down to this point: gambling on horseracing is materially different from gambling on games of pure chance, whereby people know they are going to lose over time because the technology is designed in such a way that there is no fluke, no luck and no skill. The two are materially different. If we do not understand that, we will simply end up destroying a sport to try to protect people from something completely different.

[Gavin Newlands]

I accept the premise of the right hon. Gentleman’s point, but that is why the SNP is calling for a smart gambling levy that is scaled to the damage that gambling does. There has obviously been cross-party agreement on FOBTs over the past couple of years, but the levy would be higher. We can agree to disagree on many things, but we can certainly agree on others.

I have another couple of points that I would like to make, but time has defeated me. I should perhaps not be so generous in taking interventions next time around.

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[Matt Hancock]

Very briefly, I welcome the Minister’s confirmation that the levy review will happen by April 2024. However, overwhelming concern has been expressed from Fakenham to Bangor, from Newbury to Newmarket, from The Guardian to the Racing Post, and across the House, by Labour, the Lib Dems and the DUP, as well as the Conservative party—and, within the Conservative party, from the hon. Member for Shipley (Philip Davies) to the hon. Member for Newbury (Laura Farris). When they agree, they must be right. I cannot see how we can ever have frictionless checks—how we should ever have frictionless checks—if the checks involve looking at someone’s income or bank account. I urge the Minister to take away this key point: there is a difference in different types of betting, and there is a serious risk of unintended consequences in the current approach, which is going to make things worse.

Motion lapsed (Standing Order No. 10(6)).