Equine troubles
Somebody once accused me, as the MP for Newmarket, of being the bloody boring member for bloodstock. I make no apology. Newmarket is indeed the world headquarters of racing, and has been for centuries.
When I first became a Member of Parliament, racing faced a crisis. The introduction of the single European market meant that goods purchased in an EU country required VAT to be paid in the country of purchase. That would have meant 17.5% on top of the purchase price of a race horse, whilst France and Ireland had obtained a special derogation from the European Commission to charge very low VAT. Bluntly, we would have lost the racing industry in England as we know it.
After a robust campaign, we secured a life saving concession from the then Conservative government which was to make VAT tax deductible for business purposes. In many respects racing has thrived since then, with attendances up and a huge rise in the price of bloodstock.
Over 40 years ago, a deal was struck with bookmakers to pay racing a levy. This is now inadequate. Prize money in Britain is hopelessly low relative to the costs and risks of owning and training a race horse. Time and time again Government Ministers have had to step to resolve the impasse between racing and the bookies each year. It is not very edifying.
The racecourses set up Turf TV and, say the bookies; this is costing them £50 million to access. The bookies want to subtract this from the £85 million levy they pay. Meanwhile the Government is trying to find some legal way to sell the state betting business, the Tote.
So we have a stand off. The bookies are no longer individuals operating at the race track, but sophisticated companies with shareholders to consider. Meanwhile racing really does need more prize money.
MPs like myself have over the years helped with VAT registration, liberalisation of the Tote, offshore betting taxation and Sunday racing but in this situation it is difficult for us to know how to help effectively.
Racing here is such a brilliant success story, giving so much pleasure to so many. It is all rather sad that no resolution to the stand off has yet been achieved. The current system is indeed not fit for purpose anymore.