Deregulation of Racecourses (Hansard, 21 April 1998)

I beg to move,

That leave be given to bring in a Bill to provide for the deregulation of racecourses. In introducing this Bill, I am required to declare an interest. I am a member of Cheltenham race course, which costs me considerably more money than it brings in. As a result of my interest in racing, my family and I receive hospitality from race courses and connected organisations.

I should like to be able to claim that the Bill is a major piece of legislation, but I hope that the fact that it is not will not mean that the House hesitates to give me leave to introduce it. In fact, the Bill is supported by hon. Members from three political parties in the House, and I am grateful to all of them for that support. I am also grateful to the Under-Secretary of State for the Home Department, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), who has been extremely helpful and encouraging during our discussions. I should also like to place on record my thanks to those at the British Horseracing Board—which featured deregulation in its financial plan—the Racecourse Association, the Tote, and Cheltenham race course for the help that they have given me in preparing the Bill.

The Bill would deregulate race courses in Great Britain, so that they might be in a better position to exercise the measures of self-help that the racing industry itself, encouraged by the Government, recognises it needs to pursue. Before turning to the detail of the Bill, I hope that the House will allow me to describe the background that makes the introduction of such a Bill so necessary.

The horse racing and bloodstock industry is extremely important to this country. In all, racing and betting combined secures employment for more than 100,000 people, and racing provides the Exchequer with a contribution in taxation of almost £500 million a year. Five million people attend race meetings each year, and racing and horse race betting have a combined turnover of more than £5 billion a year.

The racing industry has assets of £2 billion, and contributes more than £90 million a year in exports. In my constituency of Tewkesbury, the Cheltenham race course at Prestbury Park has an annual turnover of £10 million, and when the income received by guest houses, pubs, restaurants and hotels is added, the value of racing to my constituency alone becomes immeasurable.

There are those who say that all in racing is going well, and yet another successful Cheltenham festival last month might encourage such a point of view; but, alas, all is not well in racing. Many smaller courses—those where owners, trainers, jockeys and horses start their careers—are not doing so well. Crucially, prize money at those courses is low, often yielding as little as £1,300 for the winner of a race. Given that the annual upkeep of a horse is about £14,000, it does not require much knowledge of racing to realise that the ownership of race horses is a very expensive activity, but that, without owners, racing would not exist.

In Britain, owners recover only an average of 24 per cent. of their outlay each season. That compares with 47 per cent. in the United States, 49 per cent. in 597 France, 61 per cent. in South Africa and 90 per cent. in Japan. Therein lies the crucial point: low prize money means low returns to owners, which puts vital investment in race horse ownership under threat—so much so that Sheikh Mohammed, a major race horse owner, recently said that, unless there were positive signs of progress and the possibility of change, he would seek to reduce his racing and breeding presence in Britain. As he so pertinently put it:

My hope, and that of other owners and breeders on smaller scales, is that after we have emptied our pockets, we are at least allowed to keep the lining. The loss of such a key investor in British racing would be extremely damaging, but this week the racing industry suffered shock waves from the news that Sheikh Mohammed is already planning to transfer the training of 100 two-year-olds to France. That is bad news for employment and the industry in general, and, unless more money finds its way into racing, such news will become epidemic. We can no longer ignore the warning signs; we have to address the problems in the racing industry, and we have to address them now. That is what the Bill would begin to do.

Let me clear about one point: racing asks for and needs no subsidies from Government. However, there is much else that the Government can do to help racing and I am having separate discussions with the Minister about those issues. One of the ways in which the Government can help racing is by allowing it to help itself.

Too much regulation, for far too long, has tied the hands of race courses, limiting them to using their enormous assets for, on average, only 20 days a year—5 per cent. of their time. Does any other business in the country use its buildings, machinery and land for only 5 per cent. of the year? Yet race courses are effectively limited to doing exactly that, due to regulation. Many people ask, "Why are race courses used so infrequently? Why can they not generate more of their own income?" Well, they are prevented from doing so partly by regulation.

The Bill is about removing those restrictions. It is about deregulating race courses, so that they can help themselves; so that they can generate more of their own revenue; and so that they can increase the prize money on offer, thereby doing their bit to help to safeguard the future of racing in this country.

Briefly, the Bill seeks to allow race courses to do on non-race days what they do on race days—hardly revolutionary, is it, but it will help race courses to generate additional revenue. For example, when the grand national is being run at Aintree, other race courses should be able to set up large screens for people to watch the race. They should be able to take Tote and other bets on 598 the outcome of the race, and run amusement and prize machines; and they should be able to provide food and drink for individuals and families who attend. They should be able to do all that, but at the moment they cannot.

Cheltenham race course, for example, can operate fully only if racing is taking place at Cheltenham that day. It cannot make maximum use of its considerable assets in the way I described on the back of racing at, say, Aintree, or during the World cup this summer. My Bill would enable it to do so.

My Bill is hardly a major measure. It seeks to make only minor changes to current legislation, but those changes will provide race courses with the potential to increase their income significantly. It will also reduce unnecessary restrictions, clarify the law, cut bureaucracy, and enable race courses to be set free to determine their own destiny.

The regulations restricting race courses can largely be found in the Betting, Gaming and Lotteries Act 1963. Section 6(1) allows horse race courses to carry out bookmaking on non-race days, provided that bookmaking has not been carried out on that course more than seven times in the previous 12 months. However, given that race courses did not hold as many meetings in those days as they do now, the legislation was probably drafted to enable the courses to do exactly what my Bill proposes they should be able to do. In other words, only the passing of time and the development of race course business has caused a problem. The Bill aims to address that problem, and, in doing so, to clarify and modernise the law in this respect.

The Bill will simplify the law; it will thereby enable race courses to do on non-race days what they can already do on race days; it will provide race courses with the opportunity to exercise self-help measures; and, in doing so, it will offer the racing industry the opportunity to increase its income significantly, thereby helping to safeguard the future of Britain's third most popular sport.

The Bill is just one of many small measures that Parliament needs to take to help the racing industry to help itself.