Horseracing and Bloodstock Industries

Earl of Effingham Excerpts

Thursday 14th September 2023 Grand Committee

[The Earl of Effingham (Con)]

My Lords, I thank my noble friend Lord Herbert of South Downs for raising this important debate. In around 200 AD, it was Roman soldiers in Britain who organised the first horseracing competitions. The sport continued to increase in popularity and, by the 10th century, famous racehorses were widely given as gifts for royalty. In the 1500s, breeding laws were set by Henry VIII, possibly when he was sitting in Cloister Court, just a few minutes away from where we are right now, and rules became standardised. James I visited Newmarket in 1605, acknowledged as the home of racing. In 1711, Queen Anne was out riding and discovered the beautiful terrain of Ascot. Her magical find is celebrated to this day with the Queen Anne Stakes, the opening race of Royal Ascot Week. The St Leger Stakes was first run in 1776, the Epsom Oaks in 1779. In more recent times, racing was one of Her late Majesty’s greatest passions, with her winning more than 1,800 races and overseeing the royal stud on the Sandringham estate.

British racing leads the sport on an international level, and events such as Royal Ascot attract competitors and spectators from all around the world. British horseracing is a treasured institution. It is part of our national identity and has been enjoyed by many for over a thousand years. But this is so much more important than just supporting a tradition. While racing is referred to as the sport of kings, that is entirely misleading because racing is enjoyed by adults and children alike from every different walk of life. If asked, many people would cite football as the most attended sport in the UK; they would be right, with around 15 million people enjoying Premier League matches alone in 2022. However, it might come as a surprise to some that racing is in second place, with over 5 million spectators every year enjoying a day out at the many courses we have across Scotland, Wales and England.

Racing is entertainment for the entire family. One can enjoy a picnic at the racecourse, watch the beautifully turned-out horses in the parade ring and immerse oneself in the thrill of the race with the huge excitement of your fellow spectators cheering on their favourite. You are out in the fresh air, walking around the course taking exercise. This is all-inclusive fun and human interaction away from mobile phone screens. Aside from the enjoyment for the nation, the benefits to the wider economy are significant. Racing contributes around £4 billion to gross domestic product. Our rural economies need all the help they can receive, and racing both directly and indirectly supports around 80,000 jobs. Training yards and studs needs many different skill sets in the individuals it employs, and these businesses are key to providing jobs for our future generations and giving them a great base from which to learn and grow.

We have an industry which has existed for centuries, provides an amazing day out for all, contributes £4 billion to the economy and supports around 80,000 people, but it is not without its challenges. For owners and trainers in the UK, it currently makes sense to race overseas. Horses are coming out of training in the UK and going straight to the Middle East. The industry is facing a talent drain, which we must try to stem. It is an alarming statistic that in 2022, the number of higher-rated horses being exported from the UK doubled versus the previous year.

The reason for this, as we have already heard, is prize money. Our trainers rely heavily on that money as a key source of income, which in turn supports rural economies. Our owners know that if their horses race overseas, it can materially help with running costs. Prize money in Japan is around five times more than that in the UK; in the United States, it is around four times more.

It is not only prize money. Trainers and breeders are also bearing the brunt of the cost of living crisis and supply-chain issues. Feed is more expensive; electricity and fuel for transportation are more expensive—the list goes on. I am reluctant to automatically go down the route of saying that more funding is the solution, without looking hard at alternative measures, but in this case I believe it is the right path. To support the racing industry, we need to increase the money available to it.

Levy income stood at around £98 million in 2022, but we know that the right number to support the industry is around £140 million. That number can be achieved without any material restructuring; we simply need to follow the existing precedents of our European neighbours, Ireland and France, which both have a global levy. If a UK-based racing enthusiast places a bet on the Kentucky Derby, surely British racing should benefit. Where was that love of racing nurtured and cultivated? Who made the investment to create that bond and enjoyment? It was clearly predominantly British racing, so why should British racing not benefit in that scenario?

A global levy would generate around £25 million of additional revenue. If we then increased the levy by just 1.5 percentage points, from 10% to 11.5%, that would generate another £15 million, which would result in an annual income of £140 million; that is where we need to be. For good order, increasing the levy not only increases prize money. Equally importantly, it provides invaluable funding for the welfare of our horses, with improvement in equine medical science and the sport at a grass-roots level. What plans do the Government have for the levy? What are the options on the table and what do the Government see as a realistic timeframe for improvement and change to support our horseracing industry?