Racing Industry (Hansard, 10 April 2002)

§ Mr. Alan Meale (Mansfield)

In recent months, right hon. and hon. Members—along with others in another place—have become aware of disputes and divisions within the racing industry, and subsequently within the sport itself. For those not fortunate enough to be familiar with this very British pastime, there may be the temptation to regard such matters as a little local difficulty, of interest only to wealthy racehorse owners, the tweedy set, rich bookmakers—most of whom are regarded as having short, stubby arms and deep pockets—or, worse still, every mother's nightmare: the compulsive gambler. This debate gives me the opportunity to put the record straight, although not in the case of the bookmakers, of whom that is an apt, commonly used description.

As long as 15 years ago, I was regularly being verbally bludgeoned by hon. Members, many of them Conservatives, about the definition and status of racing. I say to them again, and to others in the racing industry who chose to remain in their comfortable time warp: yes, horse racing is a sport, but it is primarily a gigantic industry in Britain, and one in which the nation and those who work in it can take great pride. It is also of great economic and social importance to the country.

The realities of racing today may surprise many. Indeed, on closer examination, even the racehorse owner often turns out not to be what most people would expect. That is because of the heartening development in recent years of syndication, or should I say partnerships of people in large and small groupings who share maintenance costs and ownership of thoroughbred horses.

That development has enabled enthusiasts from a wide range of socio-economic classes for a comparatively small outlay to share the impecunious pleasure of ownership of a horse whose blood-line may recall classic triumphs. More usually, it enables owners to appreciate the delightful pleasures of countryside retreats such as Ayr, Kelso, Catterick or Lingfield Park, which are all wonderful places.

I am led to believe that some right hon. and hon. Members in this House and in the other place follow such equine dreams—unfortunately I am not one of them, for the moment at least, although I would never rule out the chance of making such a mistake given the right, or the wrong, opportunity.

The importance of the racing industry is clear. Collectively, it is the eleventh largest industry in Britain. Some 60,000 people are employed directly in the racing and horse breeding industries, which is the equivalent of one in eight of all agricultural workers in the United Kingdom. What is more, a further 40,000 are employed in the betting sector, which remains dependent on horse racing for the majority of its revenue. In addition, a host of large and small businesses and individuals depend on racing for much of their income, including the transport companies that move the horses of the 523 registered trainers between the 1,200 fixtures and more than 7,000 races held in the UK's 59 turf tracks and three all-weather tracks spread throughout the length and breadth of the 123 country, more of which are in the planning stage. On top of that, more than 5 million people become racegoers every year when they visit a race track meeting.

To imagine the scale of local business dependency connected with horse racing, we should think also of the hotels, restaurants and bed and breakfast establishments that supply the demand for accommodation at race meetings not just at Ascot or Epsom Downs, but at Redcar, Bristol, Yarmouth, Uttoxeter and many more. The hon. Member for South-West Hertfordshire (Mr. Page) is present. He is the joint chairman of the all-party group on racing and bloodstock, and I wish him well in his endeavours on this important subject.

The regular audience to such events has witnessed some of the finest feats of horsemanship in the world at the recent national hunt festival in Cheltenham, Gloucestershire, at the grand national meeting at Aintree, Liverpool and at the opening race meeting of the flat season, with the Lincoln meeting held at the Minister's local race track at Doncaster. That is estimated to have brought hundreds of thousands of people to those beautiful but usually sleepy communities. I am not attempting to give the Minister, who is a true Yorkshire lad, the impression that Doncaster is a quiet town, especially at the weekend, but I hope that he gets my point.

The impact of racing extends to our greater economy through a huge network of subsidiary businesses that supply services as various and as numerous as feed merchants to farriers, vets and vehicle manufacturers. For the media, racing represents a front-line sport, with cumulative television audiences of more than 400 million, which makes it the second most televised sport on terrestrial television after football. It is even more important for the corporate hospitality industry, the main reason being that, whereas football and rugby take a couple of hours, a day at the races is usually just that, with at least a four or five-hour experience for those attending and considerably longer when travel is taken into account, especially as most race courses are situated in rural settings.

If the racing industry is in a state of war with itself, it is not merely the hobby of a few rich men and women at risk. On the contrary, it is the jobs of tens of thousands of workers in this important industry along with many more who supply it.

Let us consider those in the media, among whom Clare Balding is a good—or perhaps bad—example. She did a great disservice to the sport. She tried to undermine the new Minister for Sport in his first few hours in the job by turning her interview with him—his first as Minister for Sport—into a pub sports quiz. She probably regarded that as a golden opportunity for herself, but in retrospect it was very silly—indeed, stupid—and about as useful to the industry as some of her so-called expert advice and tips, which she regularly gives to television viewers. She and others in the media should get a life and remember the old racing adage: a beaten favourite is never more popular than before it runs, and never less trusted than afterwards. Thankfully, the Minister is the sort of person who does not hold a grudge, and who will not be brow-beaten or hesitant as a result of such behaviour.

124 Putting that issue aside, something needs to be done quickly, as the war in racing to which I have referred is raging as never before. To some, it might sound strange to hear me say that, as I have a long history of campaigning for a change in racing, and of warring with the likes of the Jockey Club and the bookmaking fraternity in doing so. However, somebody has to attempt to bring order and common sense, before it is too late. It will indeed be too late if no solution is found before 1 May, when betting customers will be robbed of screening races in betting offices. The 47 race courses that control 1,050 of the 1,200 meetings that are screened have decided not to allow those meetings to be shown in betting offices.

Great strides have recently been made in this place to help racing. That is not usual, although there have been some notable exceptions in previous Governments. In June 1993, under the previous Administration, the Jockey Club handed over the operation of British racing to the British Horseracing Board—a development that the hon. Member for South-West Hertfordshire, who leads for the Opposition on these matters, and I had long campaigned for. Indeed, several of the Members present also engaged in that debate. Although the hand-over was not as comprehensive as I would have liked, it did usher in a change of management and approach that offered a modern dynamism befitting such an important industry.

I take this opportunity to pay tribute to the then chief steward of the Jockey Club, Lord Hartington—or "Stoker", as I and many others know him—and most of his board, who put their hearts and minds into achieving that important change.

The issue that the Minister will soon have to address is that the hand-over was only half the trick. The Jockey Club continues to own the majority of the UK's prestigious race courses. Those courses run the best races, most of which are televised, and the majority were purchased through public funds. The value of those publicly funded courses is estimated at hundreds of millions of pounds. Like others, I think that they should be transferred to a new racing trust. Those public funds should have been used for the public's benefit, rather than for that of a small, Jockey Club elite.

Members will also be aware that, in recent years, a deduction from bets—a tax, as the punters called it—excluding those made on race courses, has contributed some £500 million per annum to the Treasury, and to the financing of racing through the operation of the Horseracing Levy Board. The deduction was subject to negotiations between the betting industry and other elements of the racing industry, led by the British Horseracing Board. As the Minister is now painfully aware, on those occasions when the parties involved could not reach agreement, responsibility for setting the levy passed to the Government. In reality, that was a get-out clause for the industry, allowing it to delay, or avoid, taking a decision. That stupid scenario led the racing side of the industry to arrive at largely gutless non-agreements, to the delight of bookmakers, whose annual strategy was to deny and delay agreements. As one of them honestly and openly admitted to me, "We enjoy the ritual of annual refusals, but we cannot be seen to be getting too carried away. The trick is the negotiations and, of course, the delay." Consequentially, I can tell the Minister that the concept of an agreement in the racing industry has been, if not extinct, certainly an endangered species for many years.

125 Those outdated strategies and system epitomise the lunches of industrial brewers in times now long gone, when they annually paid for their lunches with successive Chancellors who then misled them about the beer duty that they set in their Budgets. In simple terms, as I have said, those outdated and useless practices managed to produce only the most expensive lunches in London for brewers and beer drinkers alike.

Of course, as the Minister knows, a different approach is needed. By the end of the 20th century, it was apparent to everyone with even a modicum of brain cells that the levy arrangement was quickly becoming unworkable. The Minister is also aware that the proverbial straw broke the camel's back when offshore bookmakers—many of them well known British bookmakers—established themselves overseas and offered British punters easy access to tax-free betting.

Even more significantly, the internet had arrived and offered a further threat to arrangements and other opportunities to betting customers and bookmakers alike, who saw its potential in the global marketplace. Therefore, with the speed of the available technological development and the imminent arrival of broadband technology, it was a realistic prospect that punters in Malaysia, Moscow or Mansfield would be able to study the form for the 2.30 at Cheltenham, check different bookmakers' prices and current Tote pool odds, place their bets and then watch the race on their laptop computers.

Thus the strong and aggressive new management under the BHB and its chairman. Peter Savill, had to move quickly to counter the threat, vigorously engage with new developments and stake out its demands for a share of the spoils. I readily pay tribute to him for the work that he and his board have so far done in that regard, but now I appeal to him to go the last mile to keep the industry running. I ask him not to risk an ITV Digital scenario for racing, but to find a solution in the coming days.

I pay tribute to the Government, particularly the Chancellor, who acted swiftly to aid the industry in several ways, such as ending betting tax, as well as a number of other important measures, all of which helped the industry to adjust. I also pay tribute to my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), who is sitting beside me, for the work that he did as a Home Office Minister. Indeed, I pay tribute to his successor. Perhaps more importantly, the Government also recognised that this large and valuable industry had to change fundamentally if it was to move forward as it should.

I am pleased to say also that the Government were right to say that some of that change had to be addressed not by the Government, but by industry itself. However, at the same time, they also recognised that there are areas of direct Government responsibility that had also to move into the future. I am pleased to admit that, under the guidance of my right hon. Friend the Minister, they are thankfully making progress towards such badly needed change, first, with the Horserace Totalisator Board—the Tote, as it is more generally known—which is the organisation established to provide pool betting at every race course in Britain. It also operates as a commercial bookmaker, with a chain of betting shops, and as active credit business, which is now emerging as a front runner in the international internet betting market.

126 The Tote is very special to all connected with racing, because it exists to service racing itself. As many hon. Members know, the Tote is currently the largest sponsor of racing and its profits are ploughed back in to the sport. Its facilities are not dictated purely by profit considerations alone. Moreover, its provision of high quality computerised betting facilities and smartly staffed Tote points at every racing meeting throughout the year, regardless of location, weather or size of crowd, are part of the service that it provides the sport and form vital parts of the race-going experience.

In the same way, the Tote's promotion and use of large television screens at race tracks has greatly improved visibility for racegoers and greatly helped to develop the racing experience itself, as well as the use of those facilities in many other sports. Because of that, the Minister and other hon. Members will understand my and many other Members' view that the Tote is, as I have stated, very special and, of course, important to racing. Indeed, I will go much further—it is the mortar that holds together much of the fabric of the sport. It also marks the point at which betting and horse racing are seen most clearly as part of the same industry, rather than as warring interests.

It is vital for any changes to the Tote's position to be made carefully and sensitively. Nevertheless, changes are needed urgently, and should not be unnecessarily delayed. As the Minister knows only too well, the Tote today is a strange hybrid, operating in the commercial market yet under Government control. Along with many other Members, I believe that running a betting shop is not a proper role for Government; nor is the Tote helped by such an awkward relationship. Indeed, never was such a silly relationship exposed at its worst until other bookmakers moved offshore to avoid betting duty. When that happened it was difficult, indeed nigh impossible, for a Government-controlled organisation to do the same. It is a great credit to the Tote chairman Peter Jones and his senior executives that they kept the organisation competitive in such circumstances.

At other times when the Tote has wanted to raise money in the financial markets to invest in its growth, its hybrid status has proved to be a stumbling block. I know, of course, that the Government and indeed the Minister have recognised that change is needed, and that the Government have announced that the Tote will in the near future be privatised by its transfer to an independent trust. I use the word "transfer" rather than the word "sale". I can tell the Minister that the racing world in general has warmly welcomed the decision, but I must also tell him that care is needed in the fulfilment of the task.

It is vital for the Tote to continue to serve and benefit racing. To achieve that, it must be truly independent. It must be out of the Government's clutches, and not controlled by the commercial betting industry or other racing bodies whose views may be either sectional or subject to mood or their interests at any particular time. I believe that the Tote should be a trust, but should not become simply a milch cow of convenience. There should be a close relationship, yes; but it should not be so close that damaging issues or conflicts of interests prevail.

The Tote is, in the main, a bookmaking business. As such it must be allowed to compete with other businesses in the betting sector, with the ultimate aim of continuing to support racing. Bodies such as the British Horseracing Board may take a different view, but herein lies the 127 conflict. I hope the Minister recognises that if the BHB controlled the Tote, it would be within its power to benefit from, or to disadvantage, the operations of individual bookmaking businesses.

Although I have never been known to be a friend of this sector of the industry, most people who know me are aware of my belief that choice is of paramount importance to the British betting public. Currently, it is not available to customers in France and elsewhere. In saying that, I question neither the professionalism nor the probity of the BHB and its management. I think it imperative that their administration or regulatory role should never be compromised in any way, even by the suspicion of bias that direct engagement or amalgamation might cause.

Until last year the Tote and the sport of racing in general, like policing and penal policy, were controlled by the Home Office. Thankfully, the Government have recognised that racing is neither a sin nor a crime, and that—along with other sports—it should be subject to the sensible guidance of the Minister. That move has been welcomed by all sections of the industry. I therefore ask the Minister again to continue his efforts to get the industry to manage itself, to protect the Tote's special status in racing, and—last but not least—not to succumb to the threats and innuendos of bookmakers and others who have tried to continue their previously tested practices of kidology, brinkmanship and bullying in order to get their way, most recently with a Labour Government and with the Minister himself.

I congratulate the Minister on the businesslike approach that he has adopted so far. What I hope will come next is action that will help a peace process to deliver the Tote to a racing trust without compromise, and without accusations of favour being levied by one side or the other. I wish the Minister well, and good speed for his efforts.