Gambling (Licensing and Advertising) Bill
Debate between Philip Davies and James Duddridge
Philip Davies
Yes, the levy would kick in only if my horse won some prize money, and given how rarely that happens I suppose it would not make much difference. It is a distant dream one way or the other.
I want to concentrate on taxation, because I thought that the question I asked at the start of the Minister’s speech was rather simple and got to the nub of the issue. If this is all about regulation and player protection, surely the first question the Government must have asked is how many people are currently playing on illegal betting sites. I cannot believe that nobody has looked into that, because it seems the obvious question to ask. I did not hear an answer, and I am not sure whether there is one, but I venture that it will be at least 95%. If anybody wishes to argue with that, they are welcome to intervene.
Commercial Lobbyists (Registration and Code of Conduct) Bill
Debate between Philip Davies and James Duddridge(11 years, 9 months ago)
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James Duddridge
I thank my hon. Friend. I think that that is the first intervention that I have taken from him and I look forward to many more.
There is a great deal of complexity in this matter. The Royal Society of Chemistry has a great way of lobbying Members of Parliament. It does identify an individual who is on its membership for each Member of Parliament. My constituent came and had tea with me in the Pugin Room and said, “I do not want to lobby you on anything in particular, but hopefully you will be here for a few years—maybe four, maybe longer—so this is the beginning of an ongoing relationship.” That is a kind of hybrid example.
We need to consider these matters in a lot more detail. We have talked about considering the Bill in Committee, but there seems to be an increasing list of things that we must consider in Committee. I wonder whether the Bill has more flaws than can be resolved in Committee.
Philip Davies
As my hon. Friend knows, I agree with him on most issues, but I am in danger of parting company with him on this. I do not see the distinction that he sees between a constituent who works for an organisation and has been asked by it to lobby their local MP, and the public affairs manager for the same organisation who lobbies as many MPs as agree to see them. I do not see the great distinction that we should be so troubled about.
James Duddridge
The fact that this matter has driven my hon. Friend to disagree with me is evidence enough that it is complex. It is a criticism of the Bill as a whole if there is no shared understanding of how we should proceed on these matters.
The lobbying industry responded to the report of the Public Administration Committee in March 2010. The three main lobbying organisations were involved in that. I shall not repeat their names because the hon. Member for Dunfermline and West Fife has given some background on them. There was an agreement to maintain a register of those engaged in lobbying and of the organisations and clients on whose behalf they lobby.
It is right that there is clarity on who the lobbyists are working for, particularly given the issue of what might happen in the last 15 minutes of the meeting. Lobbyists will sometimes start the meeting on a nice warm and cosy issue, and then hit the Member of Parliament with the landmines issue or, dare I say it, the nuclear issue—a harder subject that the Member of Parliament might be less likely to accept a meeting on when pressed for time.
James Duddridge
My hon. Friend is right. However, he has as much experience of constituency meetings as I have, and will know that quite often, lobbyists come to meetings with constituents. If it is a meeting with somebody who is purely commercial, the Member of Parliament can say, “Sling your hook! We agreed to have a meeting for an hour on this subject and you are going off the subject and abusing the office and the time that I gave you.” However, I have occasionally found myself, perhaps wrongly, allowing an issue to be raised because a constituent is there and is happy for it to be discussed.
Philip Davies
To probe my hon. Friend further, will he tell the House what is the problem with listening to a point of view on a subject other than the agreed subject? It is as if lobbying is a bad thing. Surely lobbying is a good thing if it helps us to understand a point of view a bit better. What is the harm in listening? We do not have to agree or sympathise with a given point of view.
James Duddridge
My hon. Friend makes a good point. However, the promoter of the Bill was referring to systematic abuse. He was not talking about somebody saying, “While I’m here, can we discuss X or Y, rather than arrange a second meeting?” He was talking about the sole purpose of the original meeting being to gain entry into the MP’s office to raise an issue that they had not agreed to discuss.
I prepare quite heavily for meetings with constituents or lobbying organisations, because I do not want to be bamboozled by special interests, but want to be sure that I have an independent view on the subject. If the meeting is hijacked, there is no time for such preparation or to give a good view. When I have meetings, I want to be able to summarise the matter and take a view, rather than saying, “Let me go away and think about it.”
James Duddridge
I am a little confused. I stand to be corrected, but I think that such a company would need to register while we remained part of the European Union. Interestingly, the register there is free, so the European Union is looking at getting the maximum amount of information and funding that from general taxation—our taxation.
Philip Davies
I should point out—I suppose this is an indication of how confusing the issue is—that my hon. Friend the Member for Bury North (Mr Nuttall) makes a valid point, because the definition of lobbying in clause 4 refers to
“activity carried out in the course of a business or employment which are undertaken for financial gain and are designed to influence the Government of the United Kingdom, Parliament, any local authority in England or any member or employee of any of those bodies in formulating its official policy.”
Surely it is clear from that definition that what my hon. Friend said about the register not applying to people working with the European Parliament is correct.
James Duddridge
I now understand the point that my hon. Friend the Member for Bury North (Mr Nuttall) was making. My hon. Friends are absolutely right: under this Bill, there is nothing to compel an organisation from the United Kingdom—or, indeed, anywhere else—that lobbies the European Parliament. I wonder whether, because of the nature of the European Parliament’s rules, there are any EU regulations about that. Logically, I expect that we would be forced by some directive to push it through by the back door; otherwise, if each country did not have to abide by it, such a register would be pretty meaningless.
Offshore Gambling Bill
Debate between Philip Davies and James Duddridge(11 years, 10 months ago)
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James Duddridge (Rochford and Southend East) (Con)
It is a pleasure to follow the excellent speech by my hon. Friend the Member for Mid Norfolk (George Freeman). When looking around the Chamber, I was surprised to find that he was handing out a copy of his speech to other Conservative Members, who were taking great interest in it. I then realised that it was not his speech but the Racing Post. Mr Speaker, who was in the Chair at the time, noticed that and allowed it, thus establishing a precedent that although it is, rightly, not permissible for hon. Members to read newspapers in the Chamber, unless, like the Vice-Chamberlain of Her Majesty’s Household, the right hon. Member for East Yorkshire (Mr Knight), who was previously the Chair of the Procedure Committee, they read them on their iPad, they are allowed to look at the Racing Post.
Philip Davies
I just want my hon. Friend to clarify something. Is he advancing the case that hon. Members are able to read the Racing Post in the Chamber at any time or merely when it relates to a Bill under discussion?
James Duddridge
I would certainly encourage the Government to produce simple and short legislation, and less of it. My hon. Friend mentioned that the Bill has only five clauses, and clause 5—entitled “Short title, commencement and extent”—is needed for every Bill, so it actually has only four clauses. We have already questioned whether another clause can be taken out or amended in Committee, further shortening the Bill. The hon. Member for Eltham (Clive Efford) talked about the Government’s draft Bill and said that there are many similarities. I am not sure who has copied whose Bill, but they both seem to be operating with equal brevity, which should be encouraged.
I want now to give some of the background to the Bill. My hon. Friend the Member for Mid Norfolk mentioned the Gambling Act 2005, and despite his criticisms I think that there is general consensus outside the House and among most Members of Parliament that that Act was a step in the right direction. It brought together other pieces of gambling legislation, particularly the Gaming Act 1968, and had an awful lot of good stuff in it that I would not want to see go. It might not have been not bold enough, and perhaps it did not have sufficient foresight about how the offshore industry might work and how internet gambling might fit alongside all other forms of gambling.
Philip Davies
My hon. Friend might be being far too kind to the 2005 Act. As far as I can see, it was intended to introduce a range of casinos into the country that did not materialise and to make the UK a hub for gambling businesses. Since the introduction of that Act, not only has there been no expansion in casinos but betting companies are all clearing offshore rather than moving to the UK.
James Duddridge
My hon. Friend is right to chastise me in relation to super-casinos. I was referring to the broad objectives, which were to prevent gambling from being associated with crime and disorder; to prevent it from being used to support a crime; to ensure that it was conducted in a fair and open way; and to protect children and other vulnerable persons from being harmed or exploited. I thought that those aims were laudable, as opposed to the excessive regulation of super-casinos, to which I shall return anon.
James Duddridge
The 2005 Act was a bit of a pig’s ear in relation to a number of issues. In Southend, for example, we had three casino licences, and were pushed to bid for a super-casino, to which my hon. Friend the Member for Shipley (Philip Davies) referred, not because we particularly wanted it, but because a super-casino on the Thames corridor would put the three casinos out of business. I shall return to the casinos in Southend, because they are relevant to the responsibilities envisaged by the Bill. The further the regulation from the person making the bet, the easier it is not to take responsibility.
I particularly welcomed the provisions in the 2005 Act on the protection of children, because as a child I placed a bet. I am clearly not very good at betting— I did not win—but I placed a £1 bet. Someone kindly explained to me that I had a better chance of winning if I placed an each-way bet. I did so, only to find that it cost me £2. They said, “Would you like to pay tax?” I thought that that was rather strange, because as a 16 or 17-year-old I was not used to paying tax, so I said, “No.” Then I realised that I had to pay tax if I won. Children need to be protected. [Interruption.] My hon. Friend the Member for Shipley (Philip Davies) should have better sense than to barrack me from a sedentary position. I have known him for a number of years, and have discussed betting on a number of occasions, and every time I come away with him trying to sell me a horse’s leg or urging me to place a bet. Invariably, not knowing how to place a bet, I end up giving him a fiver and asking him to place an extra bet for me. He has never given me anything in return, so when he says that horse ownership is not a commercial business, I can well believe it.
The Gambling Commission—the new regulator set up by the 2005 Act—has duties including the operation of licences for organisations and individuals who provide gambling, as well as personal licences for certain individuals working in the gambling industry. Remote gambling is the key issue addressed by this Bill and the Government’s Bill, and indeed the desire to impose order and regulation on the online sector was one of the motivations behind the 2005 Act, alongside the interests of the Treasury following a visit by Americans who thought that it would be a great boost to the UK economy to introduce super-casinos—which was certainly not the case.
The intention of the Act was to protect British customers from unscrupulous operators and to make Britain a base for the growing online gambling industry. It has clearly failed, and many Members have evidenced that today. I do not think that I need to go into the details, as that would prolong the debate for the sake of it, which I do not want to do, as I have a number of issues of substance that I want to cover.
Under the Act, remote gambling operators are required to hold a Gambling Commission licence only if they have remote gambling equipment located outside Britain. Operators based outside Britain but licensed in the European economic area and Gibraltar are permitted to advertise gambling services in the UK with reliance on the licence issued in their home jurisdiction. I believe that other operators are allowed to operate in Antigua, Barbuda, the Isle of Man, the States of Alderney, and Tasmania. Quite why those countries are allowed to operate on the same basis, I do not know, because they are a bizarre collection of countries and geographies that are not usually put together. Perhaps later in the debate someone will explain why they stand out. This has created a number of key problems and challenges around consumer protection and the regulation as competitiveness issues of British licensed gambling operators. I would like to spend some time developing these points further.
Participation in remote gambling is steadily increasing. According to the British gambling prevalence survey in 2010, 73%—that is, 35 million—of the adult population participated in some form of gambling in the year prior to the survey, with 14% using the internet to gamble. I thought that was an awfully large proportion. As a novice gambler I thought that I was not a participant in this great project, but then I realised that state gambling included the national lottery, which I do online, and well as the pools, which some people do online. Some of those silly games—Monopoly or similar—that I have been persuaded to play while topping up my national lottery game are included as well, so it is quite a broad area.
Like most people, I had no idea where the tax on those games on websites was going. There is a complete lack of clarity. It is a growing industry and a growing problem. A report by the Gambling Commission on industry statistics estimates that the total global revenue from gaming, the gross gambling yield, which for some reason excludes telephone betting, was more than £20 billion in 2001, representing 10% growth on the previous year.
The UK consumer gambling yield which, as opposed to the broader statistics, includes telephone betting, is estimated to have grown by 5% between 2010 and 2011 to reach £2 billion, so this is big business. It has an impact on many people, which makes the need for reform so much more important and relevant. The Government rightly recognise that the current system is flawed and can no longer adequately ensure the protection of British consumers that had originally been envisaged.
I said that I would return to the subject of Southend and gambling. There are three casino licences in Southend. I go into those casinos, as one would expect of a Member of Parliament, and talk a lot to operators about the responsibility for problem gamblers. People with British licences onshore are responsible for that regulation. Having listened to the debate, I think that the position offshore is less certain. In some cases operators could have no responsibility.
If a problem gambler in Southend goes into the casino and is in remission, for want of a better word, and going to Gamblers Anonymous, they can say to casino staff, in effect, “Look, I’ve got a gambling problem. Please don’t serve me when I come in.” A register is maintained. I believe this goes across the board. If that person, for whatever reason—stress, perhaps—is worrying about whether they should gamble or not and subsequently says, “I’ve changed my mind. I want to gamble again,” they are not allowed to do so. They are opted out, but that same person can nip on to a computer and bet.
It is wrong that that differential exists between online and offline, onshore and offshore. It is not a level playing field. It is not to the benefit of the gambler. Most gambling is perfectly legitimate and does not cause a problem, but for some people it does cause problems. Bringing the legislation, the supervision and the taxation closer to the individual would be a great help.
Philip Davies
My hon. Friend is right about the importance of people being able to self-exclude from gambling. We all want to see as little problem gambling as possible, but I am sure it is just as possible for somebody to self-exclude online as it is to self-exclude in a shop or in a casino. I am sure the facility to self-exclude applies online as well.
James Duddridge
What my hon. Friend says is logical, but I challenge him. I have not seen examples of that. I notice that he has his iPad, so perhaps he can zip through a few websites to see whether there are any that are self-excluding. I know that the casinos and the operators were very proud of that facility.
James Duddridge
I am not sure that there is a reluctance to engage with the technology per se, but there is a reluctance to do so where it might be disadvantageous rather than advantageous. I recall going to a business in Southend that specialised in online marketing. I did not question it on the taxation arrangements of the companies they were helping or those of the company itself, because that was not the focus of my visit. I think I will go back and ask a little more about the online gambling firms it is working with and the implications of how technology can be used to assist not only in compliance with regulations but in best practice, which is in the interests of the whole industry.
Many operators have different products licensed in different jurisdictions, and it might be thought that this provision could be a regulatory burden. I know that my hon. Friend the Member for Shipley will pull me up very quickly on that issue. However, several companies deal across different jurisdictions, and I do not think that it should trouble them too much.
Philip Davies
I am struck by how much faith my hon. Friend has in the Gambling Commission over and above any other regulator in any part of the world that has been assessed as having as good a regulatory standard as ours. On what basis does he have such complete and utter faith in the Gambling Commission and know for a fact that it is so much better than any other regulator in any other jurisdiction?
James Duddridge
I think that my hon. Friend is putting words into my mouth in relation to the Gambling Commission. I would say, though, that we have more control over the Gambling Commission in comparison with a foreign commission or an area that is completely offshore and completely unregulated. There is no great history of regulation in this area, but we do sometimes focus on some of the more problematic cases.
To return to the idea of working across jurisdictions, one can often go on to a website and not be sure which jurisdiction one is trading in. I mentioned my dabbling in the national lottery. A friend who used to live in Southend and moved away to southern Spain—Southend being as sunny as it is, it comes as a surprise that anyone would want to do that—bought a lottery ticket there. Although they had a modest win—£10, I think—they were outside the jurisdiction and blocked from receiving that money. We need clarity because there is confusion even with something as simple as a lottery ticket in the EU, and we should look at the issue in detail.
The Gambling Commission reported that it receives inquiries about social responsibility and unfairness in relation to offshore gambling—I am sure it also receives such inquiries in relation to onshore gambling—but that it is not able to do much about what is going on. It has been unable to investigate complaints or inquiries, so it is difficult for me, or indeed anyone, to understand the size of the problem. It would be advantageous to solicit information and hard numbers, and I urge other Members of Parliament to consider the issue.
Philip Davies
I understand my hon. Friend’s point, but in some respects she argues against herself. As she says, the Government are looking at this issue—indeed, everybody has been looking. I think even she said in her speech, in passing, that the levy system was broken to a certain extent—everybody starts these debates like this—or that it was not ideal and was not delivering the right outcome. However, it seems rather strange to say, “The levy system’s broken; let’s introduce a measure that entrenches it even more.” I do not quite follow how that is the solution to the problem that she rightly highlights.
I am not a big fan of the levy system either. My hon. Friend the Member for Rochford and Southend East would describe himself as a layman, but he made some pertinent points about other sports and industries being subsidised, and all the rest of it. I certainly do not think there is any justification for that. Really, the levy is something historical, because that is how it started. If we were starting again now, would we have the levy system? Possibly not—I do not know; probably we would come to a commercial agreement—so I am not sure that entrenching the levy system is the solution to the problem that my hon. Friend the Member for Thirsk and Malton identifies, nor would it deliver any extra funding for racing. Therefore, I am not sure that this proposal is worth persevering with, given that it would also add legal complications—again, I accept her point about the legal position as she sees it—that the Government could well do without. I see lots of downsides for the Government in pursuing this proposal; I do not really see any great upside, for the reasons I have given. Therefore, it is probably not worth while persevering with. Again, however, I am sure that the Minister will have a view on that.
Let me return to the point about the levy. There is a slight misnomer—I am certainly not alleging that anybody is trying to mislead anybody when they trot it out—that can give a false picture, which is the idea that the levy is essential for the small trainers, the small owners and the small breeders, whom we have got to support, and that without the prize money the levy generates, they would go under. I do not think that that is the case. If we look at the figures more closely, we can see that it is not quite as simple as that. There is an element of that involved: the levy board supports fixtures at the bottom end that might not otherwise be viable, and I am not going to decry that, but that is not the only destination for the levy board’s money. It might not even be where most of it goes; I am not entirely sure. It would be interesting to have a breakdown of where the board’s funding goes, so that we can see whether it represents a sensible way of diverting resources.
As I said, a very high percentage of prize money in this country goes to a very small number of people, including the top owners and the top trainers. In effect, we are asking for money to be transferred from poor people in betting shops—they are the ones who pay the levy, after all; it is the punters, not the companies, who are paying in one form or another—to wealthy racehorse owners. That set-up represents a strange redistribution of wealth, and it is not one that I recognise. There are not many calls in the House for the very poorest to pay more to the very wealthiest people in the world, but the levy, in essence, brings about just such a transfer of wealth. I do not think that that arrangement stands up to scrutiny.
The levy is certainly used to prop up the prize money of some of the top races in the country. I am sorry if I am returning to a subject that you would rather I did not mention, Mr Deputy Speaker, but with the best will in the world, a small owner like me is not going to win the top classic races on the flat. That is simply not going to happen, so I will not benefit from an increase in the levy. The people who win that kind of race are Sheikh Mohammed, the Coolmore stud in Ireland and the new people from Qatar, who are a welcome addition to the racing industry. It would be stretching the imagination to suggest that any of them were struggling to get by, based on what they have at the moment. We cannot pursue that particular avenue too far. We should be careful about what we say the levy is used for; it is not used just for the purposes that my hon. Friend the Member for Thirsk and Malton claims it is.
The figures that my hon. Friend gave earlier rightly showed how the levy had reduced over the years. My hon. Friend the Member for Bury North was right to point out that it had stabilised and started to move back up again, and I am sure that everyone is happy about that. It is not right, however, to say that the only contribution that bookmakers make to the racing industry is through the levy. In recent years, for example, they have been asked to pay a vastly increased contribution to race courses for picture rights. That money is going to the race courses and the media companies.
I accept where my hon. Friend the Member for Thirsk and Malton is coming from and what she wants to achieve, and I would like to think that there is no greater supporter of horse racing in the House than me. It is my great passion in life—to be perfectly honest, it is a greater passion than politics—and I want to see the horse racing industry thrive. My point is, however, that the money that bookmakers pay for the racing product is not being efficiently passed down the racing food chain. A lot of it gets stuck with the broadcasters who are supplying the pictures, for example. Perhaps we could explore the possibility of finding a better mechanism for getting the money from the broadcasters down into the racing industry, as my hon. Friend the Member for Thirsk and Malton wants to do. It is also possible that the race courses are piling up the money from the picture rights and not passing it on in prize money.
James Duddridge
I apologise to my hon. Friend for not being here right at the beginning of his speech. Having sat through three or four hours of the debate, however, I have started to get a feel for the issues involved and I understand the points that he is making about the levy. It has been pointed out that we should not look at the levy in isolation, and that we should look at other sources of revenue. Does he have any idea of the amounts that are being acquired, or could be acquired, through picture rights or other avenues? The Bill tries to make the case that the levy does not raise enough money, but without being able to see the bigger picture, it is difficult to say whether there is enough money in the industry at the moment.
Philip Davies
I am grateful to my hon. Friend and I will try to assist him by looking at the data from 2009-10 and then from 2010-11. In 2010, the levy was £75 million and the picture rights were £140 million—the betting industry was paying for them—and other costs came to £26 million. That total of £241 million was, in effect, what racing cost the betting industry. The total dropped to £228 million in 2010-11, which was largely the result of a drop in the levy by £16 million, and the overall amount that betting gave to racing dropped by £13 million. Since then, however, it has steadily risen. In 2011-12, the picture rights went up by £11 million and the levy went up by £60 million, so the total went up from £228 million to £256 million. For this year, 2012-13, the betting industry is forking out £267 million for racing products compared with £256 million last year. In the current climate, that is a considerable rise. Next year, with the agreements that have been made, it is going to go up from £267 million to £275 million.
If we take all that together, it is difficult to sustain the argument that bookmakers are not paying a fair amount for their racing products. It might not be through the levy—the levy is at a level similar to what it was five or six years ago, now that it has stabilised and gone back up—but it is not the levy that is costing the bookmakers more: it is the other things. Given that we have heard from a number of Members today how horse racing makes up a smaller and smaller part of the income bookmakers receive, it is not, in my view, sustainable in the long run for, on the one hand, horse racing to take less and less of the bookmakers’ share of the bets they are taking, while on the other expecting bookmakers to pay more and more every single year for the horse racing product. At some point, it is going to snap; it will reach a point where it is no longer sustainable.
I point out gently to my hon. Friend the Member for Thirsk and Malton that it is always easy in this place to say “Let’s get those awful bookmakers to pay more money.” They have paid more money and they are paying more money, but that will not be possible in the long run: we need to find alternative ways to get the money into racing. We need a commercial agreement based on picture rights, as we must find a mechanism for getting money into racing.
Before the intervention of my hon. Friend the Member for Rochford and Southend East, I mentioned race courses, which are one of the main beneficiaries of the increase in picture right costs. As my hon. Friend the Member for Thirsk and Malton said, two race courses have closed, which is a matter of great regret. I am very sad about that, as one of the great virtues of British racing is the diversity of race courses all around the country and the ability of people living nearby to get to them. I am sure that this is also a great regret to the Minister, given that one of the courses that closed down was in his area of Kent.
People might get the idea that the race courses must be struggling, too, if they have to close down, but I do not think that is the case. I think there has never been a better time for race courses; they have never had more money coming in from picture rights and other sources. The reason for the closure of the two race courses, as I see it, is that they were owned by this big company—it was Northern Racing, but is now in a bigger group, ARC, Arena Racing Company, owned by the Reuben brothers—which took advantage of the fact that fixtures could be transferred from one race course in a group to another race course in the group. It thus closed down the least profitable race courses to move the fixtures to the most profitable race courses—not because the two race courses were not viable, but simply because profits could be enhanced by moving fixtures to other race courses in the group. That is a very sad and serious state of affairs, and I hope the racing industry will wake up to that, and change the allocation of fixtures to stop that happening. I do not believe, however, that any of those issues need to be dealt with by clause 4. As I say, it would not help the situation; it could make it worse because of the legal problems that it will bring about.
James Duddridge
My hon. Friend is explaining very well how money flows from the bookmakers via the picture rights. We have been concentrating on the levy, but is not one of the problems the fact that the race courses are not filtering the money further down to the jockeys and some of the industries mentioned by my hon. Friend the Member for Mid Norfolk (George Freeman)? If that hold-up were dealt with and the money flowed down properly through the industry, we might not need to do all this work on the levy.
Philip Davies
That is essentially the point that I am making. In the past, there has been a “racing versus bookmaker” attitude that has got neither side anywhere. There have been faults on both sides of that polarisation. Bookmakers need to accept that horse racing must thrive if they are to do well in their business, and, equally, the racing industry needs to understand that without betting, it has not much of a product to sell. Each side needs the other; a “them and us” approach gets us absolutely nowhere.
Rather than rehearsing those decades-old arguments, let us look at the facts in the cold light of day. Let us see where the money is, and how it can be filtered down. I think that there is an awful lot more money in the race courses now than there was before, but what we want is for the prize money to filter down. The amount of prize money could be increased if funds were passed down efficiently, and the smaller trainers, owners and breeders could benefit in the way that my hon. Friend the Member for Thirsk and Malton wants if that increased prize money were passed on by the race courses.
Another problem is the fact that the Horsemen’s Group, which represents racehorse owners, trainers and so forth, placed a minimum tariff on different race classifications. The prize money for a class 5 race, for instance, will be at a certain minimum level, while for a class 4 race the level will be slightly higher. Although that was done for a good reason—to end what I am sure my hon. Friend would consider to be the worst excesses of paltry prize money and establish some minimums —it has encouraged race courses to put on lower-grade racing so that they can get away with providing the minimum maximum, as it were. A well-meant initiative has had an unintended consequence. Race courses have been given a perverse incentive to “dumb down” the quality of the racing that they offer so that the prize money can be as little as they can get away with, although it will still hit the minimum prescribed by the Horsemen’s Group. That, too, is not of much benefit to anyone.
There is money in the system. Money has been flowing from the betting industry. What we need to do is find mechanisms that will enable it to be conveyed to the people whom my hon. Friend has rightly identified.