Richard Spring MP
Member of Parliament for West Suffolk

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.

When Charles II first came to Newmarket some 250 years ago he could hardly have imagined that the arguably world headquarters of horseracing would evolve there. Today there are 40 race meetings per year – in the summer on the July course and in the spring and autumn on the Rowley Mile.

We nearly lost the racing industry after the introduction of the Single European Act in 1993, because our VAT rate of 17.5% was hugely higher than the special low rate negotiated by the French and Irish. I was a new Member of Parliament and this was a potential catastrophe in my constituency. Mercifully we found a way round it, something which racing has not forgotten. Since then we have introduced Sunday racing and made race going much more appealing. So attendances keep rising, as do the number of horses in training. It is a major British exporting success story.  There remain issues like how racing is financed and the future of the Tote. The trouble is that bloodstock prices have soared and prize money has not kept pace, and it is expensive to own and keep a racehorse.

Nevertheless on Friday the Shadow Chancellor George Osborne came to Newmarket, watched the bloodstock sales at Tattersalls, and had an enjoyable afternoon’s racing, meeting trainers like Michael Stoute, Henry Cecil, Willy Haggas and Michael Bell, and the irrepressible Frankie Dettori. He was given the warmest possible welcome by everyone. More and more people want to get rid of this tired government! I was delighted so many people were to be able to tell George this in person.    

Not long after I first became a Member of Parliament, the Single European Market was introduced, with particular reference to the treatment of VAT. For the horseracing industry this would have been calamitous. A £1million thoroughbred bought here at auction would incur VAT of £175,000 whilst in France and Ireland it would be much lower, because of a special EU VAT derogation. This would have resulted in the wholesale departure of the bloodstock sales business in Newmarket in my constituency. So battle commenced at every level. In the Commons, I chaired a committee of enquiry about this, and then after an intense campaign by MPs, the racing industry and others, the Government changed its mind. Racehorse ownership could now be properly registered for VAT purposes as a business.

It saved the day. The future of racing was secured, and there have been many helpful developments since then. Racing is thriving and Newmarket remains pre-eminently the historic capital of sales, breeding and all the associated ancillary acivities.

People in racing have remained generous supporters of mine since then. Today, I’m off to Newbury with the All Party Racing and Bloodstock Committee for our annual outing. Although it is not at Newmarket this year, nobody will enjoy it more than me!