Horse Racing Finance (Hansard, 15 January 1991)

§ Lord Reay
My Lords, the initiative for dealing with any financial difficulties which the horse racing and breeding industries may face rests with the industries themselves. We understand that the Jockey Club proposes to submit to Her Majesty's Government a paper on matters affecting the finances of the industries. That submission will of course be given careful consideration.

§ Lord Donoughue
My Lords, I thank the Minister for that reply. Is he aware that the financial crisis facing both of those related industries is very severe, involving decision-makers and issues outside the industry itself, and that many racing establishments are for sale or closing and the jobs of thousands in the industry are at risk? Is he further aware that the betting industry generates over £4 billion of turnover on the back of the racing industry and ploughs back very little of that? Therefore, will the Minister and the Government inform the House when they will declare their views on the future safe and sound funding of the industry and especially when they will give their long-awaited response on the future of the Tote?

§ Lord Reay
My Lords, perhaps I may deal with the last question first. If the noble Lord was referring to the possible privatisation of the Tote, that is a matter which remains under active consideration but we have no plans for an early announcement. As regards what he referred to as the crisis in the industry, we are aware that representatives of some of the numerous industries involved have voiced concern about their financing. However, there are differences in the extent and nature of the financing difficulties which each industry faces and there are many views about how such difficulties might best be remedied. We are ready to consider on their merits proposals for measures which might assist the racing industries but, as I said in my original Answer, we believe that the initiative for action must rest with the industries themselves.

§ Lord Renton
My Lords, is my noble friend aware that, under the horserace betting levy scheme introduced nearly 30 years ago as a result of proposals put forward by a Conservative government, much help has from time to time been given to the horse racing and breeding industries? Has not the time come for much fuller use to be made of the scheme? Does he agree that that could be done without further legislation and that it is simply a question of the authority concerned trying to get more out of the scheme for the benefit of racing?

§ Lord Reay
My Lords, the 30th levy scheme for 1991–92, which has been agreed, will provide some £41.5 million for racing, which is an increase of £2 million over the current year. My noble friend 1084 correctly pointed out that the levy system has been in operation for over 30 years. We have no current plan of our own to legislate on it.

§ The Earl of Carnarvon
My Lords, is the Minister aware of the very serious situation facing British breeders regarding the value added tax differential between Ireland, France and the United Kingdom, which have rates of 2.3 per cent., 5.5 per cent. and 15 per cent. respectively? Is he also aware that Tattersalls, our major auctioneer, is likely to move to Ireland in 1993 as the market there will be so much more favourable for buyers of yearlings and who are not registered for VAT?

§ Lord Reay
My Lords, the Government understand the bloodstock industry's anxieties on this matter. My honourable friend the Minister of State at the Treasury is very much aware of the importance of the bloodstock industry and the problems which it may face after 1992 regarding VAT. Representatives of the Horseracing Advisory Council are currently involved in discussions with officials of Her Majesty's Customs and Excise and my honourable friend the Minister of State is happy to meet those representatives when the current discussions at official level are complete.

§ Baroness Seear
My Lords, if the noble Lord considers that this industry is suitable for taxpayers' support, can he think of any industry which would not have a claim to taxpayers' support?

§ Lord Reay
My Lords, the noble Baroness put her point well. We consider that racing cannot expect to be exempt from the economic restraints to which other industries are subject.

§ Lord Crawshaw
My Lords, can my noble friend confirm the figure mentioned by the noble Lord who asked the Question; that £4 billion is taken by the Exchequer from the punter and therefore indirectly from racing? Does he agree that a very small proportion of that sum, if channelled back into racing, might prevent the goose which lays that golden egg from being killed?

§ Lord Reay
My Lords, most of us do not want to see the golden goose killed. I am afraid I do not have figures on the rate of general betting duty to which the noble Lord referred. I shall look into the matter and let him know.

§ Lord Richard
My Lords, can the noble Lord confirm the VAT figures; namely, that they will be 2 per cent. in Ireland, 5 per cent. in France and 15 per cent. in this country in 1992? When will the Minister of State at the Treasury be in a position to inform us of any plans that the Government may have for trying to prevent horse breeding going across the Irish Sea or indeed the Channel?

§ Lord Reay
My Lords, I do not have with me the figures for which the noble Lord asks. So far as these are matters for discussion, they are under discussion at the present time and those discussions will continue.

§ Lord Plummer of St. Marylebone
My Lords, is my noble friend aware that the answer he gave about VAT is almost exactly the same as that given to delegations in the 1970s? Is it not time that the Government did something about this matter of the varying rates of 1085 VAT between this country and southern Ireland in order to preserve the jobs of people in areas of low employment?

§ Lord Reay
My Lords, my noble friend makes the same point but I have nothing more to add. This is the subject of discussions with the industry at the present time and those discussions are still continuing.

§ Lord Donoughue
My Lords, will the Minister confirm that we are not discussing a tax subsidy to the industry? Indeed, I believe that this industry significantly subsidises the tax revenues. To return to the matter of the Tote, on which the noble Lord gave a fairly negative reply, will he speak to his ministerial colleague and tell him that after about two years of consideration it would be helpful if he would reply on the question of the Tote, which is at the heart of any future more satisfactory funding of the industry?

§ Lord Reay
My Lords, as I said, the privatisation of the Tote is a matter that is still under active consideration. I can make no statement now with regard to the time when an announcement will be made.