HC Deb 19 June 1951 vol 489 cc255-67

In subsection (3) of section one of the Finance Act, 1935 (which provides for reduced rates of entertainments duty in the case of certain entertainments) for the words "other than the racing or trial of speed of animals," there shall, with effect from the fifth day of August, nineteen hundred and fifty-one, be substituted the words "including the racing or trial of speed of horses but not of other animals."—[Captain Stanley.]

Motion made, and Question proposed.—[18th June]—"That the Clause be read a Second time."

Question again proposed.

4.6 p.m.

Captain Soames (Bedford)

I was very glad to hear from the Financial Secretary to the Treasury yesterday that the whole matter of the anomalies existing over different rates of taxation on entrance to various forms of sport was to be examined during the coming year, and there are one or two points which I should like to put to him in the hope that he will bear them in mind when that examination takes place.

First, there is the question of the position regarding the accounts of racecourses, which was raised by my hon. and gallant Friend who moved this Motion. The position is that there are in England and Scotland 71 racecourses, which make an aggregate net profit of £91,000, which is just over £1,200 per racecourse. The extra 2d. on entrance fees imposed by this Budget will make a difference of £98,000.

The racecourses have two alternatives before them. Either they can pass the incidence of that duty on to the person who attends, or they can carry it themselves. They have decided that for two reasons it is impossible to put the extra burden of 2d. upon the people who attend racecourses. The first is because attendances are already diminishing. They were 10,000 in 1948, 9,000 in 1949 and 8,000 in 1950 per day of racing—and I am speaking in round figures. Secondly, they felt that, if the extra 2d. were put on, it would make a great difference to the attendances, and the law of diminishing returns would come into operation. Therefore, they have to carry this burden themselves.

They made a profit of £91,000, and this extra 2d. means £98,000 to those 71 racecourses. If we take them as average, although some make more profit than others, they will be making a loss of £7,000 on the figures as they are. Obviously, they could not continue, and they would have to find that money somehow. The only direction in which they can look, if it is not to the attendance, is to the stake money, the added money which they give for prizes, and any reduction there is bound to affect the number of horses that can be kept in training.

If we take away from the prize money, we are bound to have fewer horses in training, which means that fewer horses will be bred, and that will affect the export trade, which last year totalled £5 million and is a most useful asset in present circumstances. That is the position of the racecourses as they stand at the moment, in view of the addition of 2d. which is put upon them by this Bill.

When this matter was discussed in regard to speedway racing, the Financial Secretary said that he would look into the arithmetic. He said that it sounded very nice, but that if he looked into the arithmetic of this question, he would find that it does not work out that way. I have looked into the arithmetic where horse racing is concerned, and I find that the Entertainments Duty paid to the Exchequer last year on the old high rate, without the 2d., amounted to £1,600,000. If the higher rate were to be reduced to the lower or "live" rate, that figure would be somewhere between £400,000 and £600,000. In other words, there is a discrepancy of about £1 million.

I agree with the Financial Secretary that if we look into the arithmetic of it, the point cannot be made that the Government would, in fact, get as much money by increased attendances if we cut down from the higher to the lower rate. There is no question that there is a discrepancy of about £1 million and that the attendance would have to be multiplied by four in order to make up that discrepancy.

But the story does not end there. It must be pointed out that there is a difference between horse racing and speedway. Speedway is an end product, so to speak. I do not think that any speedway fan would say that speedway does anything to encourage the export of motor cycles or the manufacture and sale of motor cycles in this country. Horse racing, on the other hand, is nothing more or less than the shop window of the bloodstock industry. If we hit horse racing so hard that there will be fewer horses bred in this country, which for many generations has been known as the stud farm of the world, it will, of course, affect the sale of horses. Of course, on the professional sales, such as those at Newmarket, as opposed to the amateur sales, the Exchequer does not lose either.

It must be borne in mind that it is not only the racecourse executives who are being affected by this higher rate of tax. The bloodstock industry as a whole will suffer unless something is done to ensure that the breeding of racehorses can be kept going. The racecourses are not asking for vast profits, but they want racing to be kept going in order that the bloodstock industry may continue, so that we may still remain the stud farm of the world, and so that the thousands who enjoy racing may continue to do so.

Brigadier Rayner (Totnes)

My hon. and gallant Friend the Member for Bedford (Captain Soames) reminded the Committee that the Financial Secretary stated last night that his right hon. Friend was going to look into the question of the Entertainments Duty between now and the Report stage, but that he did not think that any special case had been made for racecourses. My hon. and gallant Friend the Member for North Fylde (Captain Stanley), who moved this new Clause, and various of my right hon. and hon. Friends who have supported it, have, I suggest to the hon. Gentleman, made out a very definite case.

Very briefly, I will go over the points again. The first was that horsebreeding, which is a quality industry and a quality export business, depends directly on prosperous racing. I am a breeder of horses myself in a very small way, and I know that to be perfectly true. During the throes of the greatest war in history, the then Government kept horse racing going for that reason alone, and in spite of the fact that our taxation today is higher even than it was then, a matter of shame, the same considerations still apply. That is a very strong point.

The second point is that horse racing is becoming less and less prosperous, for, not only are costs going up but attendances are going down. Thirdly, the Treasury classification is perfectly absurd. If ever a sport was a live one, horse racing is. The jockeys are alive, the horses are alive, and the bookies are alive and even after the most disastrous day the punters are at least alive.

4.15 p.m.

Those on this side of the Committee who have so far spoken in this Debate are what one might call the "big guns" of the horse-racing world, or perhaps rather the blood stallions, or whatever one likes to call them. There is my hon. Friend the Member for Epsom (Mr. McCorquodale), my hon. Friend the Member for Bury St. Edmunds (Mr. Aitken), and it is now up to me who, like my hon. and gallant Friend the Member for Bedford, represents a small racecourse, to say a few words.

I represent a bunch of small racecourses in Devonshire. I will refer to one in particular called Haldon—one of the most beautiful in the country—which has held race meetings since the reign of Charles II. I think it is almost as old as Newmarket. It now stages a meeting twice a year for the Devon and Exeter steeplechases. We have a voluntary committee, and we do not even pay the secretary. Indeed, in order to make ends meet, we have during the past few years been providing things out of our own pockets. I provide the flower beds in the enclosure and other members "ante up" in other ways. We hold race meetings in which our gates are anything up to 6,000. Yet last year we managed to finish with only £23 on the credit side.

No race meeting, not even a small one, can possibly carry on with that sort of margin for very long. It is doubtful if we shall be able to keep it going. There are a good many of the smaller racecourses in Devonshire. There is Buckfastleigh, another beautiful little course, which staggers on from year to year, there is Newton Abbot, which although it has the smallest committee, ran 200 runners at the last meeting and is not too happy about its position, and there is Tomes which has gone out of business altogether.

The Chancellor cannot want to see these small racecourses closed down. After all, they bring in a certain amount of revenue. For instance, the meeting at Haldon brought him £3,000 last year. Not only do they bring in revenue, but they encourage horse breeding and help to keep up the morale of the population in these times of tribulation and wars and rumours of wars. Therefore, I hope he will give rather more thought to this matter than he has promised between now and the Report stage. I feel that my hon. and gallant Friend the Member for North Fylde and those who have followed him have made out a very definite case.

Mr. Keenan (Liverpool, Kirkdale)

I rise to say a few words because of the exaggerated statements which have been made on this matter by hon. Members opposite, not only today, but also last night. I have wondered for a long time whether the racing industry existed for purposes other than that of entertainment. I am very well aware of the financial aspect of the matter, and there may be something in the fact that only £91,000 was made by certain racecourses; but that sum does not represent what is made by the racecourse executives who remunerate themselves pretty well. In Liverpool, for instance, we have about 16 days' racing a year. I am quite prepared to recognise that the industry employs thousands of individuals, but, unfortunately, it attracts to itself lots of undesirable people. The fact remains that the whole of the cost is paid by the small fellows at the bottom who have to work for their living.

The meeting at Ascot last week was an example of the discrimination that takes place at race meetings. In spite of the high cost and Entertainments Duty, one could not get into the enclosure unless one were dressed at Moss Brothers. The fact remains that it is a privileged sport, although I am not unmindful of the fact that the working classes do participate in it to the extent that they gamble. I am not denying that they will insist upon doing that whether we like it or not.

Brigadier Rayner

If the hon. Gentleman will come down to the racecourses I have mentioned, he will find that there is no privilege or discrimination of any kind at their meetings.

Mr. Keenan

I live within half an hour of Aintree racecourse, and I have seen two Grand Nationals, so I am not without some knowledge of the matter. I know that unless one can afford to pay 10s. one sees very little of the race.

My point is that the case for the value of horse racing has been over-stated in this debate. I was amazed at the statement of the hon. and gallant Member for North Fylde (Captain Stanley), who moved this Clause, that exports of blood-stock were valued at £5 million; but imports in 1950 were valued at £5,591,090, so we had to supply the credit to buy those.

Captain Stanley (North Fylde)

Would the hon. Member quote one case where we used dollars to buy bloodstock last year?

Mr. Keenan

I do not think I mentioned dollars, but if I did the fact remains that we do not receive dollars for all that we export. Nearly £6 million was paid for stallions, mares and geldings. Nearly £500,000 of that was for geldings and we do not bring them in for breeding purposes. The value of this industry in providing exports is rather cancelled out by what we import.

We should view this thing in its right perspective. Horse racing has been contrasted with football and speedway, but horse racing already enjoys concessions that do not apply to football, speedway and dog racing. Football is an entertainment to the workers. Horse racing is also an entertainment, but the workers do not see as much of it as I used to see when I stood at the rails at Aintree. I do not see that the Jockey Club or the National Hunt Club are in any way dependent upon a concession on Entertainments Duty. This so-called industry is quite capable of facing its own responsibilities and the industry should pay its fair share of taxation.

Brigadier Head (Carshalton)

I think the hon. Member for Kirkdale (Mr. Keenan) took a rather jaundiced view of horse racing, both as an industry and as a sport, perhaps as a result of his not being able to see over the next man in front of him at Aintree. I disagree very strongly with his remark that racing is not democratic. I think that that is the one thing racing is. I myself as a stable boy have led a horse round the paddock at Ascot. Perhaps that will give the hon. Member some cause to rejoice.

I want to endorse what has been said by my hon. Friends concerning the breeding aspect of racing. I think the Financial Secretary to the Treasury would agree that that is not entirely a matter of exports. It is a source of drawing invisible imports as well, in the sense that people come to this country to buy horses and to visit our racecourses and that is dependent on the prestige of our bloodstock. If all British horses go slower and slower and all races are won by foreigners we shall look silly; and the British public would not like it either.

The Chancellor may well lose the value of this duty that he proposes to impose owing to the effect it will have on breeding and thus on export. Hon. Members may say that is a far-fetched argument. They may ask, "What do you know about it?" I spent the early years of my life studying this matter, and I was attached to a racing stable for some time, although I have no interest in a horse or part of a horse at present. I assure the Committee that the effect of this duty will be in direct opposition to what the Jockey Club is now, rather belatedly, trying to do for racing.

Any hon. Member who has studied racing since the war must have noticed the trend whereby foreign horses, and particularly French horses, win the classic races and the long-distance races for mature horses. The reason for that is partly, though not entirely, due to the fact that we race much more with two-year-olds and have a much larger proportion of five-furlong races with very young horses. The French do not do that. They run their horses as three-and four-year-olds and on average race over longer distances.

The Jockey Club is now trying to alter the impact of stake money so as to give greater encouragement to those who breed long-distance racehorses which run when they are mature. It is common sense that if a man can win a fairly big stake with a two-year-old that is not going to encourage him to wait until that horse is three years old. If we want to encourage races for mature horses over long distances we must put up the stake. The Jockey Club are trying to do that and to diminish the racing of immature two-year-olds, such as the March races for two-year-olds at Liverpool.

If this extra duty is imposed, racecourses will lose money. They will have to economise on their stake money, and if one does economise on the stake money—a problem which I am sure the Financial Secretary has not had to tackle—one is confronted with the problem of how to attract adequate fields, because the British public do not like to see only three or four runners in a race.

How will the racecourses ensure adequate fields? I will tell the Financial Secretary. They will have to increase the number of two-year old five furlong races and other five furlong races. Those attract a field because races which offer a quick return on money spent on a yearling always have done so. If they do that then the impact of this policy, partly due to Entertainments Duty, will be reflected by the breeders. That is to say, the big run of breeders who are concerned with the majority as opposed to the really exclusive mares will attempt to breed two-year olds that can go five furlongs at an early age, for there will be a strong demand for such animals.

The two most transmissible qualities in the genetics of racehorses are precosity and speed. Therefore, there is a great attraction in any case for the breeder to go in for precosity and speed. The effect will be to encourage this policy and one may gradually find, over a matter of years, that this trend which has been going on since the war, will increase rather than decrease and that British bloodstock will include more and more of these precocious animals that can go five furlongs. They are a very attractive proposition for getting one's money back, but they in no way favour the production of race horses of classic or staying type.

If this duty is imposed, racecourses will have to economise on stake money and will have to attract big fields on the cheap. If they do that, they will be forced into having more and more of this particular type of race which the Jockey Club are now trying to reduce in number. Therefore, I beg both the Chancellor of the Exchequer and the Financial Secretary to think again. If I may say so, in both of their careers they might be quoted as examples of precosity and speed. Before they come to a decision on this matter I would ask them both to reflect on the more classic examples available, which show the merits of maturity and stamina, and which, each in his own sphere, are so well exemplified by Colonist II and my right hon. Friend the Member for Woodford (Mr. Churchill).

Mr. Paget (Northampton)

Would not the simpler way of achieving the object the hon. and gallant Member for Carshalton (Brigadier Head) has in mind be to abandon two-year old racing before June?

4.30 p.m.

Brigadier Head

The hon. and learned Member will have to refer to the Jockey Club, not to me.

Mr. George Wigg (Dudley)

I wish to ask the Financial Secretary not to look at this problem purely from the angle of the money which he makes out of it. This tax, which is really one levied upon people's leisure time pursuits, is regarded by the Treasury as a source from which they can get a little extra money this year or the year after. They tend not to worry very much about the social consequences of policies which they initiate almost by accident, as it were.

One of the regrettable things that has happened in this country during my lifetime has been that more and more of us have tended to go and watch bigger and bigger events and to take a less and less active part in them. The foundation of football is not to be found at Wembley, but in a crowd of youngsters kicking a ball about and trying to get it between a couple of coats at each end of the field. Likewise, the man who is a speedway racer on a very expensive machine is only part of the game. The boy who cycles on a grass field on a bicycle may be the speedway rider of tomorrow. Likewise, in the case of horse racing, Ascot and the Derby are only part of the story.

The foundation of horse racing is not the great occasions. It is not Ascot, nor even the Derby. It is the small point-to-point meeting. The participants do not care very much whether they win or lose. What matters to them is the fact that they are engaged in a sport which they love. They wish to spend their time in a way which gives them the maximum amount of pleasure, and so the small events have their roots in the enthusiasm of those who take part. During my Army experience I never had much money, but I have been a race horse owner. I went to a sale in Baghdad at a cotton plantation which I believed was started by a Socialist Peer, Lord Chelmsford. A noble animal was brought in, I bid 100 rupees by way of a joke and it was knocked down to me. It never won a race for me, but when I sold it it won a race for someone else.

That is by the way. That sort of thing is not possible in this country—I wish it were. I think it would be far better if more people could take an active part in it. I am sure that the Financial Secretary or the Chancellor is aware of the effect of this tax on speedway racing and horse racing, and indeed upon football and cricket. If it persists we shall end up with centralised racing and just a few courses around London and the big cities. All the small speedway clubs will be put out of action—some of them have gone already. It will become impossible for the poorer professional football teams to carry on, which would be thoroughly regrettable.

The social consequences of over centralisation of sport would be profound. Let us not forget that sport and happiness are intermixed. I think that one of the reasons why racing was carried on during the war was not only because of the value of the bloodstock industry, but because when people are feeling a bit down—perhaps they have not had a letter or leave—the fact that they can slip into the canteen and put a couple of bob on something in the 4.30 boosts their morale whether they win or not. Some people object to that, but it is a pleasure which is a leisure time occupation and therefore performs, as the Financial Secretary knows, a very important part in our national life.

If, therefore, my right hon. Friend looks at this problem as one in which his concern is a source of revenue and he cares little about the social consequences it will lead to the impoverishment of our national life, and life will become even more gray than some of us sometimes think it is. I hope that my right hon. Friend really means business about his review which was promised last night in regard to speedway and horse racing, and that before very long he will come to the House, having looked very carefully at the matter, and will produce a policy in relation to these sports which is not only concerned with what he can get out of them.

Captain Crookshank (Gainsborough)

I do not wish to bring this fascinating discussion prematurely to an end, but it would be as well to say a word from here. It has been fascinating because it has increased our knowledge of our fellow Members to an extraordinary degree. We knew that some of our colleagues, including one on this bench, were owners of successful horses. We did not realise that my hon. and gallant Friend the Member for Totnes (Brigadier Rayner) provided flower beds for his local racecourse; or that the hon. Member for Kirkdale (Mr. Keenan) had attended 20 Grand Nationals and had only seen the horses pass by. What else he expected to see I do not know.

Mr. Keenan

Might I point out that on the level one only sees, as I said, the horses pass. If one can afford to pay one can go on the stand and see all the race, which I have done when I have been able to afford to go on to the stand.

Captain Crookshank

Either way is equally pleasant, and I hope that both are on the level.

We had a disquisition from my hon. and gallant Friend the Member for Carshalton (Brigadier Head) about the common mare, the methods of breeding and the points which had to be looked for. Then we discovered that the hon. Member for Dudley (Mr. Wigg) had also been an owner. We knew none of this half an hour ago, and it is a very interesting addition to our late night debate of yesterday.

The fact of the matter is that racing is one of the old British sports, and on whatever side of the House one may sit and whatever political views one may have, I am sure that everybody would deeply regret the disappearance of it in this country. Quite apart from the economic advantages, such as the export trade and so on, which have been pointed out, we all want to see this sport continued, not only the great meetings which attract millions of people, such as the Derby, but the more humble meetings up and down the country, particularly in the spring, when the local point-to-point meetings are held.

If it can be shown, as it has been argued and shown, that to increase the tax on this form of live amusement—and let us never forget that that is what it is—will reduce its scope and diminish all over the country the possibility of having races, it is good that the right hon. Gentleman has said that he will look at the matter again. Not only is it a very old sport but, when all is said and done, if we are to have the breeding of the horses it is only through racing that the theories of breeding can be tested. There are other animals which are pedigree animals, but they are tested in other ways. No one, for example, suggests that dairy cattle should go racing. One of the points to which one looks so far as they are concerned is the gallonage of milk. But when race horses and thoroughbreds are concerned the only way that a test can be made is by racing one against another.

Let us in these changing days realise that there are some things in this country that ought to be preserved, and among these are most noticeably our ancient historic sports. It does not matter whether one quotes Charles II or Queen Anne in this connection. There have always been those who have had the power and the funds with which to test their theories, and as a result the people have had amusement, the breeding of thoroughbreds has continued and bloodstock has been exported all over the world.

That is really important, and I am, therefore, very glad—I repeat this because it happened so late at night that it is not in today's HANSARD—that the right hon. Gentleman has said that he will look at this whole matter again. We emphasise that this is a live sport, because in the case of the amelioration which was made in the Entertainments Duty, for example, on the living theatre, which has some kind of connection here, the emphasis was on the living person acting as compared with a celluloid figure in a film. So here we are dealing with live horses, jockeys, breeders and the rest.

We are, therefore, gratified that the Government are to look at this again. We shall not today press them to a Division, because we recognise that it would be, extremely embarrassing for all hon. Members on the Government side, who have shown quite clearly in the debate—and I am certain that it is equally true of those who are not present—that they are at one with us in wanting to see racing continue, not necessarily for their own benefit—that would be asking too much—but for the enjoyment of the people they represent throughout the country. This is a completely non-party issue, and, as the Government say they will look at it again, we shall not press them to a Division.

Question put, and negatived.