That this House has considered Government support for the horseracing industry.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank hon. Members for attending the debate—I know it is a Thursday, but people have shuffled their diaries to attend because of the industry’s importance to all our constituencies and to the country.
Racing is, after football, the second most watched sport in the country. About 6 million people attend the races every year, among them people of all ages, 40% of whom are women. Contrary to myth, racing is a cross-class sport—not that we want to use this debate to define working people. British racing is without doubt an international success story. Four of the top 10 races in the world are held here, which is more than in any other country. We have the best bloodstock; our races attract the best horses; and Britain has some of the finest trainers and horses, including modern legends such as Frankel and Enable.
Racing, like all sports, is a business and it brings huge economic benefits. The industry is estimated to generate £4.1 billion in direct, indirect and associated expenditure every year. About 85,000 people are employed at race- courses, training yards and breeding operations, and in the betting industry. In Newmarket, racing brings in more than 7,000 jobs and generates hundreds of millions of pounds a year for the local economy.
I thank my hon. Friend for securing such an important debate. I am delighted to have Ludlow racecourse in my constituency and, if he ever gets the chance, I would welcome him to Eyton races—a great day out. He made an important point about the local economy, so does he agree that the lack of a clear way forward and support from the Government at this stage is creating uncertainty in horseracing?
I am sure all hon. Members would look forward to a trip to Ludlow to experience the racing. If I am honest—I say this as a Conservative—this issue has dragged on for a while. I will turn to some questions for the Minister shortly, but time is of the essence.
As so often with Britain, part of the draw, especially for international investors, traders and spectators, is our history and tradition. Racing in this country dates back more than three centuries, and thoroughbred racing was first created here. The association with royalty, which continues with His Majesty the King, only adds to the prestige—I am sitting next to my hon. Friend the Member for Windsor (Jack Rankin), the most ardent monarchist in the House of Commons.
That success story, however, is strangely neglected. To those who do not know the industry, it can sometimes appear to be something of a caricature, with horses selling for millions of pounds, breeders paying hundreds of thousands for a particular stallion to cover a mare, and aristocrats and royals being prominent in their patronage. But the reality of racing, unfortunately, is that its future is far more precarious.
Many breeders and trainers operate on tight margins and, as many hon. Members present will affirm, any conversation with them turns quickly to prize money. A horse that wins a top-tier British race increases its future breeding value, but the immediate return is limited compared with in Australia, Ireland and France, where racing benefits from Government support, or in Japan and the United States, where there is simply more money around.
The prize fund for the Dubai Turf, for example, is £4.5 million, and for the All-Star Mile in Australia it is £2.7 million. The Queen Anne Stakes in Ascot, which is a fair equivalent, offers £600,000, and the same is true for the less famous races. At an average of £16,000 to be divided by all placed horses, prize money across the board is much lower here than in competitor markets. Lower down the pyramid, most races pay less than £5,000 to the winner. Owner expenditure far outstrips the total prize money up for grabs in British racing. That is down to how the industry is funded.
I am grateful to the hon. Member for securing this debate—he and I are co-chairs of the all-party parliamentary group on racing and bloodstock. It is important to get more money into the racing industry because there are so many people employed throughout the sport for whom racing is their livelihood, but their commitment and the lifestyle that they have to lead to do their work means that we must make sure they are in decent well-paid jobs as well. We cannot have racing squeezed, as it could be in years ahead.
I completely agree with the hon. Gentleman. The racing industry is connected to many associated industries and many different kinds of jobs. As I said, when people see the large sums that are invested in bloodstock and so on, they do not always see that the industry rests on thousands of people, many of whom are on low incomes.
I congratulate my hon. Friend on securing this debate, which is well attended for a Thursday. He knows my family’s interest— I am about the only one who is not involved in racing; my father was a national hunt jockey. Does he agree that from the 2,000 Guineas and the Derby down to the small trainers, small tracks, point-to-points—Fakenham is just outside my constituency—the rural economy and pony clubs, there is an equine economy right across this country, but it relies on money trickling down from the top? Does he further agree that racing’s finances are not just unhealthy, but in crisis? The problem goes across a lot of Labour constituencies as well, so I support him in asking the Government—we will hear from the Minister—for a strong steer to prevent the further decline of racing’s finances.
I agree emphatically with my hon. Friend. I do not think this is a party political matter at all. We are all in this room regardless of our party badges because we know the importance of horseracing to our constituents and to our local economies and the country. A lot of the beneficiaries of the British horseracing industry reside in rural and semi-rural areas and regional towns. We spend a lot of time talking in this House about how we are going to improve the regional economy and racing is a really important part of that economy. To return to my point, we do not have time to go backwards.
As part of the work that I referred to, my third question is: will the Minister commit in this debate to the principle of a higher levy? In 2022-23, the levy raised £105 million, but the British Horseracing Authority estimates that an indexed yield of at least £133.5 million is needed for a sustainable future for racing.
Fourthly, will the Government reform the way in which the levy works? It is anomalous and nonsensical that the levy should apply to bets placed here on the races in this country, but not on bets placed here on races held overseas. That does not happen in Ireland or France, which derive significant income from the best British meetings, and we are penalising our own industry. I note that the Gambling Minister, Baroness Twycross, has committed to
“making sure that the levy is administered efficiently to best support racing.”—[Official Report, House of Lords, 29 July 2024; Vol. 839, c. 801.]
Indeed, I think the way in which the levy works is a vital part of that commitment.
Fifthly, following the Secretary of State’s encouragement that
“we cannot believe everything we read in the papers”—[Official Report, 17 October 2024; Vol. 754, c. 969.]
Order. To get everybody in, we will start with an informal time limit, so please do not speak for more than five minutes. Keep an eye on the clock, please.
Thank you very much, Sir Edward—it is very kind of you to call me so early in the debate. I declare an interest as the vice-chairman of the APPG on racing and bloodstock. It is a pleasure to serve with you, the Father of the House, as custodian of the time limits and procedures. I appreciate your advice, and I will stick to the required five-minute maximum. I congratulate the hon. Member for West Suffolk (Nick Timothy) on securing this important and timely debate.
I have always been a firm supporter of the horseracing industry. It may be the sport of kings, but it is loved by many thousands, if not millions, of working-class people. It is a vital part of not only our rich cultural heritage but our economic engine, especially for more rural communities and towns in areas such as mine. We have 59 racecourses across England, Scotland and Wales, and as was mentioned a little earlier, the industry draws almost 5 million spectators each year—I was actually surprised by the numbers. World-renowned events such as Royal Ascot, the Cheltenham festival, the grand national at Aintree—represented by my good and hon. Friend the Member for Liverpool Walton (Dan Carden)—and the Ebor meeting at York attract people from all walks of life, who appreciate the opportunity to visit in person.
However, smaller, less famous racecourses are of equal, or perhaps more, importance to local communities. The hon. Member for South Shropshire (Stuart Anderson) mentioned his racecourse in Ludlow—I am not familiar with it, but perhaps I will visit at some point in the future. We are blessed with many such racecourses in my region, with Hexham in the north and Sedgefield—the racecourse nearest my constituency—in County Durham, and they all play a crucial role in supporting the regional economy. Of course, I must mention Newcastle racecourse, the home of the Pitmen’s Derby—the Northumberland Plate—and, soon, the Fighting Fifth.
As we have heard, horseracing contributes a not insubstantial £4.1 billion annually to the UK and supports more than 85,000 jobs—it is actually the second largest spectator sport after football. It plays a significant role in rural areas, offering employment, boosting tourism and sustaining industries, including not just those directly involved in horse breeding and horseracing, but catering, transport and hospitality. However, as we are all aware, the industry faces economic challenges, many of which stem from previous policy decisions, as recognised in the 2023 gambling White Paper. As a result, it is accepted that reforms are necessary to ensure the sustainable future of this crucial sector.
It is a pleasure to serve with you in the Chair, Sir Edward. I congratulate the hon. Member for West Suffolk (Nick Timothy) on securing this important debate.
Last week, I was lucky enough to attend the season opener at Wincanton races in my constituency. I found it hugely valuable to be there and discuss the issues of trainers, jockeys, owners and those watching the races alike. As the hon. Member said, the British horseracing industry is worth £4.1 billion a year to the UK economy, but most of that comes from mega-wealthy bettors who can afford to make substantial bets.
It is right that the Liberal Democrats have committed to implementing affordability checks, but it is vital that those checks protect vulnerable problem gamblers and their families, rather than deterring wealthy players, who help underpin the sport. One analysis shows that enhanced financial risk checks in horseracing, if implemented badly, could result in the sport losing £50 million a year. Similarly, a British Horseracing Authority survey suggests that 40% of bettors would turn to the black market if affordability checks were too stringent. Given that remote betting turnover, which accounts for at least 70% of all betting, continues to decline, the industry cannot afford to see that level of financial support just walk away. The Government must work with the industry to implement robust and frictionless affordability checks.
Racecourses, training yards and breeding operations are largely based in rural areas such as Wincanton and play an important economic role in those areas. Some 20,000 people are directly employed by the horseracing industry, and it supports another 65,000 jobs in supply chains. There is a real opportunity for the Government to ensure that local people in rural areas can access these jobs, by boosting the availability and take-up of apprenticeships and expanding higher vocational training. The lower apprentice rate should be scrapped to guarantee that everyone working in the horseracing industry receives at least the national minimum wage. That is particularly important in rural areas such as Glastonbury and Somerton, where people still typically need to spend an additional 10% to 20% more on everyday requirements than those in urban areas due to the rural premium.
Thank you, Sir Edward, for your chairmanship of today’s debate, and it is a pleasure to be able to contribute. I refer Members to my declaration in the Register of Members’ Financial Interests and congratulate the hon. Member for West Suffolk (Nick Timothy) on securing the debate. His extraordinary constituency has Newmarket in it, and I have not been there since I was about 10 or 11, when my godfather took me to see the sales taking place—I hope I can go and relive that experience at some point soon.
I have loved horseracing since I was a child. My dad, who was a dock worker, would take me to local racecourses. I did not grow up in the countryside, but in the city of Liverpool, and he would take me to Haydock racecourse and Aintree racecourse. The first grand national I attended was won by Red Marauder, and only four horses out of 40 finished the race—Red Marauder, Smarty, Blowing Wind and Papillon.
The racecourse was an absolute bog filled with water, and two of those horses had to be remounted to get to the finish. The event hooked me on horseracing because it was so extraordinary.
The hon. Member for West Suffolk and I now chair the all-party parliamentary group on racing and bloodstock, and our first meeting of this Parliament was attended by well over 20 colleagues. That—along with the strong attendance at this debate on a Thursday—just shows how highly the sport is considered.
I am incredibly proud to represent the Walton constituency, which now has Aintree racecourse within it. Aintree is home to one of the greatest races in the world, which is watched by more than 600 million people globally: the grand national. The economic contribution of the grand national—the three-day race meeting—is well over £60 million for. Aintree racecourse is also a world-class sporting facility, as well as being part of the local community, maintaining strong relationships, as some hon. Members will know, with Alder Hey children’s hospital, Park Palace Ponies and some of our schools and educational establishments. There is so much more potential for racecourses in our communities to have a positive and meaningful social impact, especially in urban areas. There is the potential for young people to benefit from alternatives to the classroom when it comes to skills and apprenticeships, and there are alternative fulfilling careers. Racing can play a role in helping the Government to deliver their national mission for growth.
Whatever the challenges British horseracing faces, it will always benefit from its prestige, including its centuries-old thoroughbred history, from Eclipse to Frankel, and Ascot racecourse, which was founded in 1711. Horseracing bridges the class divide. All of us want British horseracing to thrive into the future. For those who work in the industry, it is a labour of love and dedication, and a total life commitment.
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In Japan and Hong Kong, where betting is generally banned, there are exceptions for horseracing and some other sports, because they are seen as being run efficiently and by Government Departments. That means proportionately more bets are placed on horseracing than elsewhere, and in both places the industry controls the gambling. In France, prize money is underwritten by the Pari Mutuel Urbain, which enjoys a monopoly on betting. In Australia, where prize money has almost doubled in a decade, it is funded mostly through a betting tax. In Ireland, more than two thirds of prize money comes directly from the Irish Government.
Our system is different. Here the funds come from media rights, executive contributions from racecourses, owners’ entry fees, and the betting levy—a 10% tax on bookmakers’ profits from bets placed on races staged in Britain. Around a third of prize money comes from the levy, but income is falling. Over the past two years, the industry estimates that betting turnover on British racing has fallen by over £1.5 billion and could be as low as £7 billion this year. The Horserace Betting Levy Board says
“falling turnover is unlikely to prove a positive for the sport’s long-term health”,
and I agree.
Nobody expects us to adopt a Japanese or French model, but I ask the Minister how things might be changed so that we can put racing on a sustainable footing and make sure that we retain our position as the best place in the world to breed, train and race horses. First, does the Minister agree with all hon. Members present—this is probably the easiest of my questions— that the British horseracing industry is an undoubted international success story, a source of British soft power around the world, and home to many vital community assets in regional towns here, and that we must therefore do everything in our power to make sure it continues to prosper?
Secondly, will the Minister confirm today that the Government will not go back to square one and will instead pick up where their predecessors left off? In May, the British Horseracing Authority agreed with the Department for Culture, Media and Sport that the levy should be increased to 11.5% to create a growth fund to market and promote British racing at home and abroad, and to hold an independent review of the racing funding model.
as somebody who sometimes writes in TheDaily Telegraph, I demur—can the Minister rule out today the reported Treasury plan to increase taxes on bookmakers? If the idea is to crack down on problem gambling, such a blanket policy would be like using a sledgehammer to crack a nut, and would obviously damage the racing industry.
Sixthly, and finally—you might be grateful to hear that, Sir Edward—the Secretary of State rightly wants to “strike the right balance” to prevent problem gambling while also protecting the racing industry and responsible gambling, which she says
“brings joy to many people.”—[Official Report, 17 October 2024; Vol. 754, c. 968.]
Will the Government commit today to ensuring proportionality in their efforts to stop problem gambling?
Even though Parliament has not legislated for affordability checks, as the gambling review has dragged on, bookmakers are operating pilot checks at the behest of the Gambling Commission. The idea was that those checks would be frictionless, and we were told that eight in 10 people placing bets would never undergo checks, but we know that punters are being asked to provide bank statements and payslips to prove they can afford their bets. Nobody wants to see problem gambling go untackled, but the rate of problem gambling on horseracing is comparable with that of many national lottery products, and affordability checks are already driving people away from legal betting on horseracing and on to the ever-growing offshore black market through online accounts, where of course there are no safeguards at all.
While the numbers for viewing and attendance at races is at least the same as it was before affordability checks, we know that betting turnover, and therefore racing income, is down by 20% in two years. Independent analysis for the Racecourse Association has forecast a £250-million hit to racing over the next five years, and the BHA says that one in seven jobs in the sport could be lost because of that issue alone. We need to appreciate the difference between gambling on racing or other sports, and the fixed-margin gambling online and in casinos that drives so much addiction and suffering. If we do not, it will be to the detriment of the racing industry and the enjoyment, employment and prosperity that it brings to so many. I look forward to hearing from the Minister.
One of the most pressing issues—I am sure the Minister is fully aware of this—is the need to reform the horserace betting levy, which is absolutely crucial for funding not just prize money to attract the best entrants, but equine welfare and veterinary science. Although the levy was due for review this year, the process was delayed because of the general election. In May the British Horseracing Authority and the Department for Culture, Media and Sport reached an agreement to reform the levy, including by increasing the rate to 11.5%—I am sure the Minister will say a bit more about that. That would create a growth fund to promote racing domestically and internationally, and I gently encourage her to continue engaging constructively with the British Horseracing Authority and to build on those important earlier discussions. I understand that the British Horseracing Authority is eager to return to negotiations as soon as possible to secure a sustainable future and a sustainable funding model.
I completely agree with the argument we heard earlier that the levy should apply to all racing globally that is bet on by British punters. There is an international precedent for that, so I am not quite sure why it has not yet happened—it might be the technology, but advances in technology make it possible now. That would bring us in line with other leading nations, particularly Ireland, and would help to ensure the sport’s long-term viability.
Horseracing is a vital part of Britain’s economy and culture. It provides jobs, supports rural employment and attracts global attention and publicity. As I and other colleagues have said, it faces serious challenges, but those can be resolved through horserace betting levy reforms. I am confident that our new Labour Government and our new Minister and ministerial team will work with the industry to make the necessary changes and ensure that this sport continues to thrive for years to come.
We should not forget that horseracing also plays an important cultural and social role at the heart of rural communities such as mine. In Glastonbury and Somerton, charities such as Racing to School are doing valuable work to provide curriculum-based visits to Wincanton racecourse for local schools. A day at the races is also an important way for many in rural communities, including the elderly, to socialise. I urge the Government to strike a balance between protecting these vulnerable groups, tackling the harms of problem gambling and ensuring that people are not unduly deterred from the sport.
Coming from a farming family and having ridden horses for much of my life, I care deeply about the welfare of the horses at the heart of this industry. The UK has some of the highest welfare standards in the world, including in horseracing, but I fear that that may slip unless the Government take steps to address the domestic vet shortage. Half of vets leaving the industry have been in the profession for less than four years. Recruitment and retention are significantly more challenging in rural areas such as Glastonbury and Somerton.
To conclude, I urge the Government to work with the horseracing industry to introduce real safeguards and guardrails that support the progress that the industry has already made, such as the Betting and Gaming Council’s new voluntary code on consumer checks. The priority must always be to protect problem gamblers from being exploited by predatory gambling companies, rather than saddling the horseracing industry with tax rises to fix the financial mess left behind by the previous Conservative Government.
The hon. Member for West Suffolk did an excellent job of putting on record the low prize money offered in Britain, compared to countries with different funding models, so I do not need to repeat that. However, given the reported decline in betting turnover, the current system —the reliance on media rights, racecourse contributions, owners and the levy—leaves the industry looking precarious. That is a real concern for all those who rely on it, and like all those in leadership roles in the industry, we in this place also have concerns. My message to the Minister and her colleagues is that they, and we as a Labour Government, have a responsibility to be good custodians of the industry for the future.
British racing is British soft power; it creates bonds between states—not just our neighbours in France and Ireland, but Japan, Australia, the US and the Gulf states. It is one of the finest cultural and economic assets this country possesses, and it rightly has a reputation as a global leader. Will the Minister commit to being proactive in backing the industry and all those who work in it? Will she carry forward the current levy negotiations with at least the suggested increase and with some urgency? While negotiations between the Betting and Gaming Council and the BHA are resuming, we must remember that the Government set the red lines and make the decisions. Finally, could we have that independent review into the future of racing—into the funding model for racing—to ensure that, in the years ahead, we can arrive at a sustainable settlement to save and promote racing?