'We have got ourselves into a ridiculous situation where the government is doing damage to one of Britain's major industries'
In the final part of the series, Lee Mottershead asks how racing can best leverage its huge importance to the economy
In his final public act as British racing's senior leader, Joe Saumarez Smith gave a speech at a reception in a Palace of Westminster room filled with prominent racing figures and parliamentarians. When talking to the audience about the sport's importance to the country, the BHA chair was largely preaching to the converted. Crucially, however, he was also making a plea to government.
Stood two or three metres away as the representative of Sir Keir Starmer's Labour administration was gambling minister Baroness Twycross. She heard Saumarez Smith hail an industry that is "an economic asset", one that adds £4.1 billion a year to the United Kingdom's economy and supports at least 85,000 jobs across rural and urban areas. Twycross was also reminded that affordability checks had battered racing, with digital racing betting turnover falling in just two years by £1.6 billion, a figure equivalent to a real terms decline of £3bn when adjusted for inflation.
Widening his scope, Saumarez Smith then urged the government to "rapidly review" proposed changes to inheritance tax, agricultural property relief and business property relief, explaining that they were "threatening the existence of some businesses both in racing and across the equestrian sector". To that long list of justifiable laments, he might also have referenced the damage set to be done by increases to employer National Insurance contributions.
"This is a sport to be cherished by the government for all the good that it can do for Britain," said Saumarez Smith at the end of his speech. In response, Twycross spoke warmly about racing but without offering any real answers or meaningful support. The many reasons why support is needed and merited have been spelt out across the first two days of this series.
In part one we showed how a single racehorse, in this case The Jukebox Man, had delivered added benefit to the UK economy of around £10,000, based principally on quantifiable benefits accrued by service providers and therefore discounting prize-money and the vast majority of trainer Ben Pauling's staffing costs. Given Harry Redknapp's star chaser is just one of approximately 14,000 horses in training in Britain, the total industry contribution can be calculated at circa £140m.
The second part of the series focused on Britain's racecourses and shone a light on the massive economic benefit they bring to local communities and the national exchequer. The 2022 Cheltenham Festival delivered an estimated total economic impact of £274m, up from around £100m when a similar project was last undertaken in 2016. Even Cartmel, the epitome of a small country track, was responsible for gross value added of £1.74m, with £1.4m of the benefit going to the local Cartmel economy. The significance of urban racecourses was highlighted by former MP Conor McGinn, who explained how having Haydock in his constituency had been vital in securing a £20m government grant for Newton-le-Willows.
The task facing British racing's leadership is how best to leverage the industry's huge economic contribution. Since Saumarez Smith's death last month, David Jones has been serving as acting BHA chair prior to the arrival in late May of former Labour insider Lord Charles Allen, who will take charge of a ruling body that needs help from government on a number of fronts, including gambling regulation and levy reform.
The BHA's response to chancellor Rachel Reeves's budget last autumn documented the authority's additional concerns over measures that risk causing "significant damage to Britain's rural and racing communities". Those words would have been just as likely to appear in a statement posted by the Countryside Alliance, whose chief executive Tim Bonner is unequivocal in his advocacy for racing.
"We have been supporting the racing organisations, particularly in relation to affordability checks, because racing is such a significant contributor to the rural economy," says Bonner. "That impact is not evenly distributed across the countryside but if we get into a situation where we see significantly fewer horses in training, the impact will obviously be greater on those areas where communities are reliant on the racing industry.
"As an industry, racing can be wonderfully insular. I think it therefore sometimes doesn't make enough of how important it is, not just to rural areas, but to the country as a whole. If we see a significant retraction in the racing industry, you are going to take a lot of decent, proper long-lasting jobs out of the countryside. That would be an act of some harm by the government and something it should seek to avoid at any cost.
"There is an entire economic infrastructure that is reliant on the racing industry. When the government is talking about growth, why on earth would it be following through with policies that are essentially acts of self-harm?"
Offering a reason for optimism, Bonner adds: "We are seeing a change of tone in relation to development, including in the politically interesting announcement about Heathrow expansion. Against that backdrop, why is it felt that the perceived breadth of problem gambling can only be addressed by doing some fundamental damage to an industry that is critical to the country as a whole and to the countryside in particular? Politically it doesn't seem to fit with the direction of travel being taken by the government and certainly the treasury.
"We also have a prime minister who likes and understands racing. I hope there should therefore be an opportunity for him to look at this objectively. We have got ourselves into a ridiculous situation where the government is doing damage to one of Britain's major industries.
"This Labour government is already able to point to a number of issues where it can say it has taken a more sensible, commonsense approach than the last Conservative government. This could be one as well."
When that Tory administration left office so did a number of MPs who had been regularly vocal in their championing of racing. One of them was former cabinet member Matt Hancock, whose Conservative successor in West Suffolk, Nick Timothy, is now vice-chair of the All-Party Parliamentary Group (APPG) on Racing and Bloodstock.
"Racing is so important to the economy of particular places like Newmarket and West Suffolk that it is hugely important to the national economy as well," says Timothy.
"The prime minister and chancellor have both said growth is their number-one priority, but with racing, as with so many areas, it feels like their actions don't match their rhetoric. If they really do want to push for growth, they need to be backing industry across the board, and that includes racing, which is so significant to the national economy."
As the MP for West Suffolk, Timothy represents a number of leading British studs, as does Thoroughbred Breeders' Association chief executive Claire Sheppard, who stresses the importance of the racing and bloodstock industries to the British countryside.
Sheppard says: "The bloodstock industry is very much embedded in rural life and the wider equine sector is the second largest rural employer. The breeding industry itself directly or indirectly supports 21,000 jobs across the UK. What we do is economically and socially significant.
"Increases in both employer National Insurance contributions and to the minimum wage will all add to the cost base. We also believe the inheritance tax changes are going to impact about a fifth of stud farms. The feedback we are receiving from impacted breeders is they are going to further reduce their operations or base them elsewhere because they cannot maintain existing levels of investment in this country.
"In addition to the direct impact of breeding on the rural economy, there are wider implications on the supply chain, employment and spend in the local economy. When the racing and breeding industries hit financial trouble, a vicious circle forms through an indirect and induced impact on rural businesses."
As the parliamentary representative for Liverpool Walton, a constituency that includes Aintree racecourse, Labour backbencher and APPG chair Dan Carden is very much an urban MP, yet he stresses the need for government to protect racing's rural heartlands.
"The racing industry employs tens of thousands of people and it's worth billions to the economy," says Carden. "We have to make sure every action we take, whether that is industry action or action by government, is designed to keep British racing as the best in the world.
"The government has to listen to rural communities. Plenty of my Labour colleagues now represent rural communities in parliament. I would also say to the government that they have to listen and move when they get things wrong.
"I'm someone who grew up in Liverpool and represents Liverpool, but I have family right across the United Kingdom, including in rural communities. I'm really sympathetic to the challenges they face. Rural communities are key to making sure we have food security and energy security. The government should be working with rural communities to make sure we protect their interests and Britain's interests."
Sheppard concurs with all that.
"The best thing government could do for the industry as a whole is to help deliver a levy settlement that supports the racing industry, and therefore also the breeding industry," she says, adding: "Affordability checks present a big challenge for British racing. We also need government to help us find a way through."
Encouragingly Bonner believes securing that help might have been made more likely by controversial decisions unveiled in the budget.
He explains: "If there is a silver lining to the budget announcement on agricultural property relief and business property relief, which will have a huge impact on a lot of trainers, studs and others, it is that the government is now hyper-sensitive about anything that could be presented or perceived as an attack on the countryside.
"My view is that the chancellor's announcement cut the legs off current ministers who had spent a lot of time courting rural voters and communities in the run-up to the election, as did Keir Starmer. There was a very significant campaign to grow support in the countryside, so I see the decision on inheritance tax as much more cock-up than conspiracy."
Bonner adds: "Although it's very difficult to see the government stepping back significantly from that announcement, it has made it much less likely it will do anything else that could be seen as harmful to the rural economy and rural communities.
"We need to leverage that because you can definitely argue that in the wake of the decisions made in the budget, affordability checks and levy reform discussions need to be fed into calculations about the future of the rural economy and the economy as a whole. There are things the government can do to make up for some of the damage that is going to occur as a result of the inheritance tax changes."
Not everyone wholly agrees with that tactical approach. On both sides of the political spectrum there is a view that some influential figures in the Labour hierarchy remain inherently hostile to rural activism. They argue racing could be harming its own cause if too closely associating itself with those campaigning on countryside matters.
McGinn, who is active in racing as a member of the Haydock racecourse committee, explains: "I'm from farming stock so I understand the depth of feeling on the inheritance tax and the impact that and National Insurance changes will have on a lot of people in racing. However, racing has got to be careful. It needs to focus on the key positive impacts of the sport and what it can offer government.
"We don't want racing to be seen as part of an anti-government political movement, whilst absolutely understanding that individuals within racing will justifiably want to make their voice heard on policies that affect them. We don't want to open up a fight on too many fronts with the government."
Linked to that, McGinn questions the wisdom of Fakenham's decision to organise and host a protest rally for farmers, who two months ago garnered considerable media coverage by creating a line of 60 tractors alongside the home straight.
"Immediately after the budget racing put out a statement criticising the government and then a racecourse lent itself to a protest by farmers against government policy," says McGinn. "I'm not unsympathetic to the arguments made on either of those issues but it's not our job as racing people to get involved in those things other than to push for whatever is best for racing as a whole.
"We need to make sure that when we do say things that will get the government's attention, or when we have to fight with government on something we disagree on, it's a big enough thing for us to get bang for our buck. We can't fight on all fronts. From a strategic point of view, we need to pick our battles. When we're criticising the government, it needs to be on something that affects the whole of the industry."
Like McGinn, former National Farmers Union president Minette Batters is aligned to a racecourse as a director at Salisbury – and like McGinn, she wants racing to be smart and sophisticated when interacting with government. She believes that in its conversations with Starmer's Labour party, the industry must emphasise what it can do for government, not necessarily the other way around.
"We need to be able to encourage Labour to see this as an opportunity," insists Batters. "What I'm saying to Labour from my position as a crossbench peer is this is such a great opportunity for racing to be part of your growth agenda. The racing industry isn't pleading for help, it's an industry that wants to be turbocharged and part of the government's growth agenda.
"All of these things are about speaking to solutions. You can very easily focus on what is wrong, and to an extent you need to present government with examples of where things aren't working and for what reason, but the more you offer win-win solutions – with wins for public funding, government and people – the more likely you are to bring about change."
Batters does, however, see a problem that exists within the sport.
She adds: "Does racing speak with one voice? No, it doesn't. It is an industry that for a lot of the time has been at war with itself. That means everybody loses.
"What we want is an industry in which everybody wins. That will mean some changes. Lord Allen will need to knock some heads together. There are vested interests sitting around the table and sometimes they need to be told to look to racing's greater good. If that doesn't happen, nothing will change."
Parts one and two in the series are available to read here:
Racing Post+ subscribers can read more pieces from Lee Mottershead here:
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