Horse Racing Levy

Sam Gyimah Excerpts

Thursday 20th January 2011 Commons Chamber

[Mr Sutcliffe]

The hon. Gentleman knows that I am not going to get involved in John Terry’s wages any more—they are not my problem. However, there are issues about where money from sports rights should go, and about the grass roots and how we fund grass-roots sports. However, the money would go not just to the premier league, but to grass-roots sport as well.

[Mr Sam Gyimah (East Surrey) (Con)]

First, I thank my hon. Friend the Member for West Suffolk (Matthew Hancock) for securing this debate. A racing right would ensure that gambling contributes to the upkeep of racing, which—I say this in response to the point raised by my hon. Friend the Member for Shipley (Philip Davies)—is essential if we are to keep racing and to keep Britain ahead, as my hon. Friend the Member for West Suffolk said.

[Mr Sutcliffe]

The hon. Gentleman makes his point, but the gambling industry would say that it already makes a contribution. My Member of Parliament, the hon. Member for Shipley (Philip Davies), is an advocate of what the gambling industry has said about the rights it pays already—television rights, sponsorship and so on.

There has to be an adult relationship and a commercial coming-together. The Tote can help with the way forward. The previous Government made the decision to sell the Tote, and gave a manifesto commitment to give 50% of the money raised from its sale back to racing. I know that defining racing makes that difficult, but it could be a starting point.

--- Later in debate ---

[Mr Laurence Robertson (Tewkesbury) (Con)]

I congratulate my hon. Friend the Member for West Suffolk (Matthew Hancock) on securing this debate and on how he introduced it. He made some extremely good points. I would like to declare two non-declarable interests as it were: first, I am joint chairman of the all-party group on racing and bloodstock industries, which is one of the most active and influential—we like to think—groups in Parliament. Secondly, I have the honour of representing Cheltenham race course, and so I take slight issue with his assertion that Newmarket is the centre of world racing. I readily acknowledge that it is a fantastic establishment and the home of flat racing, but I would suggest that Cheltenham is the home of national hunt racing.

My hon. Friend is right to draw attention to the dangerous situation with regard to prize money. It is not a matter of rich owners becoming richer; it is a matter of enabling all owners to continue to own race horses and to race them at the right standard and at the right level. He also pointed out that the important part of the debate is the knock-on effects on stable staff, jockeys and trainers—all the people who are not well paid but who should be able to continue to carry out their essential work. Take them out and the whole sport collapses. That is why prize money is so important, and my hon. Friend is absolutely correct to point out that in many races owners would lose out even if they won. If a horse is at the lower levels of racing—the lower levels are extremely important—they would have to win possibly eight or nine races a season just to break even, and that would be in a good year. However, no horse is going to do that, so he is absolutely right to point out the problem.

The current situation is paradoxical, because as my hon. Friend also pointed out, we have the most tremendous racing in this country—indeed, probably the best in the world. In just a few weeks’ time, we will have the great Cheltenham festival, which is surely the greatest racing festival in the world. We can also boast the grand national shortly after, and then Royal Ascot, and the York week in August—absolutely tremendous racing that is not bettered anywhere in the world—and yet we also have this financial problem. If seems that the two situations should not go together, but they do. Racing has continued to exist because of the generosity—or, as my hon. Friend the Member for Shipley (Philip Davies) said earlier from a sedentary position, the stupidity—of some owners, who have continued to lose money. It would be rather complacent of racing to accept that this situation will continue indefinitely, because I do not think that it will.

[Mr Gyimah]

Does my hon. Friend agree that one of the problems with not having a stable funding base for racing is the underbelly of racing? A lot of people are attracted to racing out of their passion for it, but there is so little funding available that many live on low incomes, with a lot of suicides among people who want to become jockeys but do not make it. Racing is not just for the wealthy: there is an underbelly of racing, and to resolve that we need a stable funding base for racing as a whole.

[Mr Robertson]

My hon. Friend is absolutely right. It is not just winning the Cheltenham gold cup that is important. Horses do not start off running in the gold cup; they start off running in point-to-point races, before building up to races where the prize money is perhaps less than £2,000. My hon. Friend is also absolutely right about all the people involved in that. We cannot lose those feeder tracks or what I would describe as feeder racing.

We therefore have a problem, and I have reluctantly come to the view that the levy is an outdated system that has to be replaced. We have the problems of falling prize money, and owners running horses and not getting back a third of what they put in even when they are placed. All those problems exist under the present system, so the present system cannot be right. I have long felt that the existence of the levy does at least two things. First, it divides the people of racing. When I say “the people of racing”, I include the bookmakers, because many bookmakers, whether they are chief executives or work for Ladbrokes or Hill’s, are also racing people. However, each and every year, the levy negotiations serve to divide those people. We end up with this gratuitous violence, from one side to the other, which does racing no good. We saw what can be achieved when the whole of racing got together—for once—to promote Tony McCoy, who became BBC sports personality of the year, a much-deserved award. That is racing getting together—it is racing at its best—but the levy has served to divide it, each and every year.

The second thing that the existence of the levy has done is to allow racing not to address the need to find alternative funding as urgently as it might have done. There are alternative funding mechanisms and routes for money to come in; for instance, media rights is one way, while sponsorship is another. Racecourses take money from the public, and from sponsorship and hospitality. My hon. Friend the Member for Shipley was absolutely right to say that there might be a better income stream for racing from those sources in future. In 2004, when this House passed legislation to abolish the levy, it was not enacted—I understand that it is still on the statute book and can be enacted by a statutory instrument. At that time, there were negotiations and discussions on the then British Horseracing Board’s ability to sell its data rights to bookmakers in order to get money for racing.

That option was seen as a possible way forward. However, at that time, the European Union, being the wonderful organisation that it is, decided that this could not happen. It is now time to revisit that opinion, as expressed by the European Union—and, for the benefit of those reading this in Hansard, I was being sarcastic when I described it as a “wonderful organisation”. That decision has to be revisited, because I see a need to replace the levy. I have thought long and hard about this, and I think that the Minister probably ought to announce that the statutory levy will end in, let us say, three years’ time. That would give racing the opportunity to forge new relationships and develop new income streams, in the knowledge that the levy will no longer be there after a certain point. Setting a date will concentrate people’s minds, so that they have to come up with other funding mechanisms.