THE CHAIRMAN: Thank you all for getting back from lunch. I will start by taking the opportunity to see if there is anything that you want to say either in response to outstanding questions from this morning, or whether there is anything that you want to say more generally.
PROFESSOR HERVEY GIBSON: I think certainly what I think both Mark and I want to say will fit in quite nicely as you continue to go through the report. We have not really responded -- other than to say you ought to see the model -- we have not really responded to the points on reconciliation, so at some stage we would like to turn all that electronic apparatus on and play with the model.
THE CHAIRMAN: That is something to keep us on the edge of our seats! We will move on to the next section which we were, in a way, dabbling with before lunch. This was 4.3, Expenditures on Horses and Hunting. This section, includes the figures that it costs approximately £2,600 per horse. We then get the number of households. We then get the Breakdown of followers' expenditure on horse-related activity, the Breakdown of the followers' expenditure on hunting on page 32 and Employment by followers. So I am looking for comments on this whole section, 4.3.
DR RICKARD: Sorry to make the point for the third time, Lord Burns, I feel it is so important it needs to be made. This whole section here is based on a sample of people whose telephone numbers were provided by the hunts themselves and, as far as I can see, mostly kept their own horses. You are nodding, yes. Now, what you have here is a bias sample and we know which way it is going to be biased; it is going to be biased upwards. The people sampled are not idiots. They will have worked out why you ask these questions and, at any rate, they are likely to be at the top end of people spending money on hunting and, therefore, to take their figures and gross them up must be, I submit, a gross exaggeration.
MR COX: But they are estimates that do have internal and some external consistency checks. We are, for example, internally able to compare what the hunts say they receive in payments from followers with what the followers say they paid to hunts. There is a difference between those two, but they are close. Similarly, we can estimate the size of the horse population. It is different from some other estimates, but not wildly out of line.
THE CHAIRMAN: If anything this is slightly lower than we were hearing this morning, and the figures on expenditure per horse are --
MR WAKEHAM: £2,100 in our survey for 98/99. That would be perfectly consistent; we were looking at the whole horse population.
MR CORBETT: Could we clarify on that 2,600, is that the total expenditure by the follower on everything or just on the horse itself?
PROFESSOR HERVEY GIBSON: It is just on the horse and I will quote a figure here from a tabulation. One horse households. 3,285 mean expenditure of which 485 payment to hunts, 188 on hunt related and social, so if you knock that 600 off, then you go from the 3,285 down to 2,685. Now that is for one horse households and you do similar sums for two horse, three horse, four horse households.
DR RICKARD: I am sorry. You are not suggesting, are you, that everyone who is a follower owns their own horse?
MR COX: No.
DR RICKARD: Presumably, if I may go on, a fair proportion are out of livery, they are hired for the day and, therefore, applying these expenses for these horses again will exaggerate your final figure and I have no idea what the proportion is and I am waiting for you to tell me, but clearly people who own their own horses spend more on them; of course they do. I might seriously doubt your linear relationship as the number of horses goes up.
MR WAKEHAM: My Lord, on the question of horses used for hunting kept at livery, our survey showed about 10,100 horses kept at livery or in riding stables and used for hunting.
MR MOORE: And there are some economy of scale. As the number of horses kept rises the expenditure per horse does fall. We have taken the mean position.
THE CHAIRMAN: Is there --
MR COBHAM: Whilst I can see in figure 4.2 quite a lot of the items that I would expect to see, I am not actually clear as to whether everything has been covered. Are the consultants happy that this reflects the full spectrum of expenditure by followers? For instance, are things like insurance and heat and light and secretarial and rates, fencing, equipment, horse purchase, are those things covered somewhere?
MR COX: They are included in other --
MR COBHAM: All of them?
MR COX: We asked for their total expenditure and we asked For that figure to be broken down.
MR WAKEHAM: But not capital expenditure.
PROFESSOR HERVEY GIBSON: Not horse purchase, no.
THE CHAIRMAN: How should capital expenditure be dealt with?
PROFESSOR HERVEY GIBSON: Capital expenditure on stables or horses?
THE CHAIRMAN: Horses.
PROFESSOR HERVEY GIBSON: We included later in the counting framework. The capital expenditure on stables we have not included and I would have thought, if you were thinking about expanding hunting, then that might be a very good question, but since you are not, then I do not think it would be industrial in terms of the economics.
PROFESSOR SIR JOHN MARSH: It is part of the flow of expenditures within the economy; people are maintaining stables and presumably those who supply those services --
PROFESSOR HERVEY GIBSON: Maintenance--
PROFESSOR SIR JOHN MARSH: -- Receive an income for that.
PROFESSOR HERVEY GIBSON: Maintenance is in, and you will see there is expenditure to the construction industry, and so on. I think it would be true -- maybe we could report somebody of the 115 who was building new stables, but I would be surprised if that figure was counted, so possibly there is an omission there.
PROFESSOR SIR JOHN MARSH: While I have the floor at the moment, how did you calculate the capital charge of horses?
MR COX: We were able to estimate the aggregate annual expenditure on horse purchase by asking the followers for each horse when that horse was bought, for how much, and from those figures I think we estimated, if I recall correctly, that the annual aggregate capital expenditure on horses by followers is about £3 million. We were also able to profile the purchase pattern, how long a horse is kept for, and our estimate is that about one horse in 8, or 12.5 per cent of the stock is replaced each year.
PROFESSOR SIR JOHN MARSH: So it is a depreciating figure
DR VICTORIA EDWARDS: Can I clarify that? Are you depreciating the horse over eight years to nil or did you deduct sale of the horses?
PROFESSOR HERVEY GIBSON: It depends where you are asking the question. There is a general point here on the tables. This is essentially the data collection part of the study and so what we are doing here is reporting deductions from the survey and we go on to do the modelling, then we do some additional reconciliation, but the depreciation would not enter into these figures unless the horse owners counted it themselves, which seems unlikely. Depreciation would not enter into these figures unless the horse owners themselves counted it, which seems unlikely, but the capital expenditure was counted later as a purchase by horse owners from the livestock industry.
MR COBHAM: Chairman, the same question would apply, I Suggest to vehicle purchases, such as horse transporters to Land Rovers and so on, plus the stabling and other associated buildings. Was there at a subsequent stage an allowance made not just for maintenance, as you said, but actual depreciation of those capital items?
PROFESSOR HERVEY GIBSON: Again, not for depreciation, nor for purchase of vehicles, though maintenance of vehicles would be included.
MR COBHAM: Even if the vehicle was purchased specifically for a hunt related activity?
PROFESSOR HERVEY GIBSON: Were there any where that was said to be the case? There is a figure for horse transport and I do not know how much probing with individual horse owners went into that.
MR COBHAM: Thank you.
DR CRABTREE: It seems to me, and I think this is what you have done, what is important here is to quantify the cash net expenditures. So the depreciation should not come into this at all. It is actual cashflows we are interested in and for vehicles or horses it should be the purchase price less any trade-in and that is the figure and I suspect that is what you have done.
LORD SOULSBY: I am just wondering if -- I am not sure I have heard an answer to the livery situation. I may have missed it, and what is the cost of hiring a horse from livery to hunt and is it comparable to keeping a horse full-time? I presume that -- I do not know what it costs to keep an individual horse in livery, but livery stables have to make a profit, presumably. So if you have to take your horse from livery, is it more expensive or less expensive to participate in hunting by taking your horse by the 10,000 livery horses that are used for hunting?
MR ANDREWES: The cost of a horse at livery, to hire from a livery stable, by the day would range between £75 to £130 in different parts of the country, according to the quality of the horse, broadly. If somebody were to have all their hunting hiring a horse, let us call that two days a week - 40 days a year, then it is costing them more than keeping their own horse, but for somebody who is only getting ten days hunting a year, it is economic because they just have that expenditure. The other form of livery that is important are people who have their own horses kept at livery. These days one is looking at probably £80 to £110 a week, that sort of spread, if the horse is kept by a third party, and that, £3,000 a year. If you take off the payment for the hunt, we can cost the horse at £2000, if you keep it yourself. Livery is expensive, but for a lot of people it is the only thing to do. It is probably at livery for 30 weeks a year at that sort of price, so that it is costing them £2,600 - £3,000 as opposed to £2000, purely for keeping the horse themselves before they have their expenditure for the hunt.
THE CHAIRMAN: I thought the figure £2,600 was before the expenditure for the hunt?
PROFESSOR HERVEY GIBSON: Yes, but I think your multiplying by 50 was a bit low as well.
MR ANDREWES: By 50?
PROFESSOR HERVEY GIBSON: When you multiplied by 50, I think you were a bit low.
MR ANDREWES: No 30, because you would not have it there in the summer. If you would they would keep it to grass for £20 a week, so it is a lower number of weeks. I do not know where that comes in the model, but that would be a fair approximation of what actually happens.
THE CHAIRMAN: If you go hunting and hire horses, can you get away with having one horse, or do you sometimes have to have two?
MR ANDREWES: Depends where you are. Mostly one horse, but if you were hunting in Leicestershire or parts of Cheshire the probably they would not hire you a horse unless you had two.
DR RICKARD: If I may, of course, that only accounts for if a horse that is kept solely for hunting, many out of livery will be kept for other purposes.
MR CORBETT: Horses kept at livery actually belong to the owner, not a livery yard.
MR ANDREWES: Sometimes.
MR CORBETT: Or they may be hired from a livery owner -- two situations.
DR RICKARD: They will not solely be used for hunting; some will.
MR CORBETT: No horse can be used solely for hunting; you have to exercise the thing in order to be able to hunt it. So there is always a definition problem here that a horse has to be brought fit and may even be kept fit and it requires exercise.
MR ANDREWES: The horse has to be trained. When you first take a horse out it sees the fence and looks startled. If you want to get him to jump you take it to hunter trials in order to get him going. The multiple use issue is complex.
THE CHAIRMAN: I can see that. Basically we are dealing here with some concerns that we have been asking people who are heavy users. That is one side of the argument. On the other side of the argument, there is a discrepancy in terms of the number of horses from the BETA survey and the number that you are using. As I understand it, there is not much discrepancy in terms of the cost per horse. Fundamentally the approach that is being adopted here is to try to reconcile them by looking at them in different ways and seeing whether the numbers add up when you look at them from different perspectives. Are there any other points on this section.
MR MOORE: Lord Burns, we have probably slightly underestimated the number of horses at 43,000. I would suspect it is going to be somewhere closer to 50,000 and we have probably slightly overestimated the expenditure on the horse, 2,600 when we are hearing 2,100, so it may be that there is a compensation here, slightly underestimate the number of horses and slightly overestimated the expenditure.
MR WAKEHAM: My Lord, I do not accept that. We are talking about horses, including ponies, at 2,100; it is all horses and therefore hunting horses, I would have thought logic would be on our side, they must be more. If it is any help the average price paid in the BETA survey for a horse was £2000, but that excludes ponies, that is horses, and the price for ponies is 850. That, again, is across the whole of the equestrian industry
MR SWANN: Lord Burns, thank you. If I could just make one point on this, throughout the Alliance submission to this inquiry the point has been made that it is not necessary to have a horse of the calibre of the finest hunters to go hunting with and this point has been stated on numerous occasions, that many people go with lower quality horses and horses that would not be considered as prime hunters so I think those figures are true, as you have put them for the best hunters, but I would not necessarily think they apply to all horses that go hunting.
MR WAKEHAM: I think I have an answer to that one. We also did ask a question of people as well as horses and there are 240,000 people go hunting once a year perhaps, so that is perfectly a fair point, but there are very many more people than the numbers that we are talking about who go mainly hunting.
THE CHAIRMAN: Could I move on to the --
MR ANDREWES: Are you finishing this chapter?
THE CHAIRMAN: I was coming on to section 4.4, unless there are points before that.
MR ANDREWES: I just did have, yes. I have one point. I think we have dealt with the question of the number of hunts people belong to, not to go back on that, but in 4.3.1 are you talking about the number of people in a household following the hunt. I do not know exactly how this question was asked, but would that include children and people following in a car, because they would not, again, be shown as subscribers? Although you say a mean of 2.2. people followed the hunt, I suspect what would normally happen is that the husband and wife, as it were, would be listed as subscribers, but there might well be an older relative who followed in a car; there might well be children who went hunting which would account for the difference, and I think or rather I suspect that those numbers would not tie up. In looking at the subscribers, and in trying to use that number to get back to the households, which is, I think, the methodology that was used, there would be an overstatement.
MR COX: The question put was how many people in your household follow the hunt rather than subscribe to the hunt.
MR ANDREWES: And they would, I think include those other generations, but they would not be listed as subscribers which would distort the number that when you then used that 2.21 to come back to the number of households.
MR COX: We were given to understand though that most hunts offer some kind of family membership.
MR ANDREWES: They do, but they list them as "Mr and Mrs", usually, and then the children hunt for nothing; yes, they certainly do and it would be included in the money, but the numbers would be wrong.
THE CHAIRMAN: Okay.
MR COBHAM: I am at a complete loss to understand, and I should welcome please, explanation of the right-hand columns in table 4.1 on page 30. I cannot understand how other supporter households actually have expenditure on tack and riding clothes and other and wages to employees; they have quite a large expenditure on hunt related social and recreational activities and payments to hunts, but nothing on anything else, and I do not understand what these people are.
THE CHAIRMAN: Are they not the people who are hiring horses?
MR COBHAM: Are these mounted followers?
THE CHAIRMAN: Yes.
MR COBHAM: Exclusively?
THE CHAIRMAN: It is not for me to answer the questions.
MR COBHAM: Are they exclusively? I will rephrase the question for the consultants.
THE CHAIRMAN: It says at the top of the table, "Horse related expenditure". Sorry, that was the only way I could make it add up. But it is not for me to answer, I am sorry. I will leave it to the team.
MR COX: On the question of tack and riding clothes, that is also intended to include clothing that is purchased for the purposes of attending or following a hunt, so it might include Reebok trainers, or all weather clothing that people follow the hunt in, so it is not necessarily riding tack and riding clothes per se, apparel for either riding or following the hunt.
MR COBHAM: So we have a combination in these columns of people on foot and people on horses; is that right? If the people are on horses, there is nothing here at all for stabling and livery and there is nothing for keeping their own horses at home that I read, so I concluded that these were foot followers and then I said to myself, why on earth are "we" estimating the cost of foot followers, because by and large they are incredibly small by comparison with people who are mounted?
MR COX: By and large they are foot followers and by and large they do not own horses, but some of them do.
THE CHAIRMAN: Where do the people who hire their horses come into this?
MR COX: It depends whether they own horses and hunt with those horses or whether they do not own horses and still hire.
THE CHAIRMAN: Maybe we will try to establish that. We cannot look at that now.
MR CORBETT: Would it be possible, Lord Burns, do you think at some time after this for us to have sight of the actual questionnaires? I think this would be extraordinarily helpful, because I am aware that your sampling is based on the raw questionnaires from the Alliance survey and if we could actually see them back there, 115 or 166 of the followers' surveys, I think it would give us a much better idea of what the sampling base is and how many are responding and all the rest of it?
THE CHAIRMAN: I think we need to see the questionnaire and we also need to see the full matrix, as we were promised.
PROFESSOR HERVEY GIBSON: I am not quite clear. I originally thought the question was, "Can we see a questionnaire, a blank questionnaire?", and then I thought it was, "Can we see the completed questionnaire?"
MR CORBETT: It is the completed questionnaire, yes questionnaires.
PROFESSOR HERVEY GIBSON: Would that breach any agreements made on the telephone?
THE CHAIRMAN: Let us sort that out.
MR COX: It might be problematic.
THE CHAIRMAN: Could I move on, if there are no more points on that, I would like to move on to section 4.4 and the question of the employment by followers. This raises this question of the 16.9 horses per full-time equivalent employee per year, which has been questioned. I think this is an area where there is also a difference between the answers that the Produce Studies Study of followers and your numbers. I think we just need to explore a little bit more the basis for this. Does anybody wish to comment on this section?
MR ANDREWES: Could we --
THE CHAIRMAN: What is BETA's view about how many people it takes to support a horse?
MR CORBETT: This is actually the basis of measuring employment. I believe I am correct in saying this, that we start off with the base of horses, we divide it by 16.7 and that gives us the number of employed staff. That is what I am understanding; am I correct? MR COX: No, it is worked out the another way: Number of horses in the sample, number of employees in the sample gives the number of horses per employee.
MR CORBETT: So the sample is being used to extrapolate the number of employees?
MR MOORE: Yes, this is a derived figure.
MR CORBETT: But within the sample out of the 115 followers, how many of these actually had horses at home? There must have been a very small number.
PROFESSOR HERVEY GIBSON: 300-odd horses in among the 115 followers. There were 300ish horses among the 115 followers. About 300 horses owned by the 115, and also about 20 something employees, yes?
MR COX: 38, I think.
PROFESSOR HERVEY GIBSON: That is right, 38 employees but not full-time equivalents.
MR CORBETT: So these followers only came from mounted hunts; they did not come from unmounted hunts, which would be a third of the sample in theory?
MR COX: They came from both types of hunts, some owned horses and some used them to hunt; some owned horses, but did not use them to hunt; some neither owned horses nor hunted on horseback.
MR CORBETT: What I am trying to get down to is the unweighted base, because that is the critical factor you are going to extrapolate. What unweighted base are we talking about within the sample of actual respondents who employ somebody? Because the Produce Studies indicates that only 46 per cent of people who actually keep horses actually employ anybody.
MR COX: In our sample it was, if I recall correctly, 35 of 115 within the sample who kept horses.
MR CORBETT: 35 kept horses or 35 people?
MR COX: 35 people.
MR CORBETT: Employed?
MR COX: Employed somebody to keep the horses. 35 people out of 115 who kept horses employed someone.
MR CORBETT: So we are extrapolating from an unweighted base of 35 respondents to produce our employment data?
MR COX: No.
THE CHAIRMAN: I think you should have another go at explaining it.
MR MOORE: This is not the figure that is used to derive the employment in the social kind of matrix table. The figure was derived and accepted by Professor Gibson.
PROFESSOR HERVEY GIBSON: It is the figure that is used to derive the followers. It is exactly the same as the figure for the employment by the followers. I think there is a clue to this, if you look at figure 4.2, which is the one that shows the breakdown to columns of expenditure which (a) gives you this more or less linear relationship between these expenditure items of which all except the top two are taken as horse related, and (b) it shows that wages to employees really only kicks in when you get into four, five and six horse owning households. So the pattern you can see in these figures is -- and clearly it is a small sample -- that the livery, stabling and livery fees are there right through the range through one, two, three, four horses and then disappearing in the sample at five, but the employees are barely there until we get to three, up to three horse households and then they become quite substantial at four, five, six. So you have actually got a switch, people with a small number of horses put them at livery I would guess and people with a large number of horses employ someone. That seems rational to me but, like you, I am just a consumer of the survey data, not a producer.
THE CHAIRMAN: I think it is paragraph 4.4.1 that we are struggling with; whether or not the people in the survey who employ people are employing people on the basis of one full-time person per 17 horses; or whether the survey shows that for the number of horses, the ratio of the number of horses in the survey divided by the number of people employed comes to an average of 17.
MR COX: Precisely that.
THE CHAIRMAN: I think the words in that case which say "on average", are slightly misleading. This is like the person drowning in the river that was on average three inches deep.
MR CORBETT: Maybe I am being particularly thick about this, but, Mark, I think you said that there were 35 people out of your 115 who actually employed--
THE CHAIRMAN: No, there were 35 employees out of--
MR COX: No, I think it is actually 38 employees amongst 35 followers.
MR CORBETT: But okay, out of the 115 followers you interviewed, how many of them actually in raw data terms have actually employed anybody?
MR COX: 35.
MR CORBETT: So what I have said is right. So the --
THE CHAIRMAN: They employed 38 people.
MR CORBETT: The unweighted base for our extrapolation is 35 people and I do suggest that trying to produce a national universe of, or national figure of 35 people is stretching the bounds of multiplication.
MR COX: No, the unweighted base is not 35, it is 115. It just so happens most of the 115 employ zero people.
MR CORBETT: Within that segment it is 35
DR VICTORIA EDWARDS: This could be an extremely stupid question, but it might be very pertinent -- I have no idea -- my hypothesis is on the figures you have given us, does it not tell us that if it looks as if one groom is looking after 17 horses, in fact what it is telling us is there is an awful lot of unpaid labour, volunteer labour and do-it-yourself in horse keeping because one person cannot do it and the employee will look at what, three or four --
MR COX: Typically about 70 per cent of people who own horses and follow the hunt do all the horse care themselves. 30 per cent employ someone to do it.
THE CHAIRMAN: If we take the total number of horses divided by the total number of people who are employed at hunts 17 to 1.
DR RICKARD: Victoria Edwards actually made the point I was going to make. I just want to clarify something: there are three separate groups that we are putting together. Those who own their own horses probably look after them; those that put their horses at livery and those that hire horses for the day. My point is that taking your sample and raising it, you have still biased it towards people employing people, and there are a lot of people out there who hunt who either look after their own horses or who rely on livery yards with young girls who do it for free.
MR CORBETT: I think we have to make one point clear, Lord Burns, it is totally illegal to run a livery yard with young girls doing it for free and everybody running livery yards is having very serious problems with it.
THE CHAIRMAN: Of the four categories, there are people who have horses and do it themselves; there are people who have their horses at home and employ somebody to do it; we have people who have their horses at livery and we have people who hire horses. There are four groups and the question is whether, in this sample you have the balance between those four right. What you basically have is about a quarter of them employing people to look after horses.
MR COX: Yes.
MR MOORE: I should say a member of your own committee Professor Winter who wanted to validate this figure of 17 horses he also produced the figure of 17 horses.
THE CHAIRMAN: That has put him on the spot
PROFESSOR MICHAEL WINTER: Can I respond to that? If we did and it was a long time ago I am sure the explanation is precisely the point that Victoria has just made. There are very few people who say, "Right, I am going to have nothing to do with my horses. I am employing someone or I do it myself". There are lots of people in the middle who do a lot themselves and employ help as and when they can and I am sure that is the answer, I am sure.
MR ANDREWES: Lord Burns, I looked at this last night. I was quite interested in that and I think what that number reflected, was the total number of horses owned by the people who employed that number of grooms, which worked out as the 17 per employee. You see that I am sure when you look in detail at the BETA numbers, for every horse that is rideable, there is some other one, either a pensioner or a two year old or a brood mare kicking about the place. I think that if you ask most people how many horses they own and how many can be ridden and it is about 50 per cent. So I think that is what you are actually looking at. Then you have the effect that Victoria is talking about, which is that not all of them are looked after by somebody else, so the final number would seem to me to tie up with the commonsense view. Whereas in the study we are actually looking at 15/17 rideable horses per employee and trying to equate this with your 35 employers. I find the 35 out of 115 very credible; that seems to me to tie up with about a third of people employing somebody to look after their horses; that feels about right. On that basis, what I do not quite See is , how we get back to 1,291 employees, or even given that this represents full-time equivalents, when we are looking at a figure of at least 16,000 households, and let us assume the employment is by household because I think that is probably right as well. If we are looking at 16,000 households and about a third of them employ somebody, it seems to me that we are looking at a rather higher figure, nearer 5,000, which begins to tie up fairly closely with the numbers that the Produce Studies produced unless I have obviously missed some point there.
MR CORBETT: Just continuing from what Bill is saying, it should tie up. Of course, in fact the ratio of employees accords also with the Produce Studies work. We show that 81 per cent, only 80 one per cent of followers actually keep a horse at home, of which 46 per cent employ somebody so that would come to about a third of the sample, so we are not disagreeing on this, but if we agree on the base figures, what worries me about it is why we do not agree on the number of employees actually coming out at the end of the system, because we are talking about the same number of horses; we are talking about the same ratio of employees, but you are showing about a third of the number of gross employees than we are on the Produce Studies.
THE CHAIRMAN: That may be something you wish to go away and examine or it may be something for which you have an answer now.
PROFESSOR HERVEY GIBSON: (Pause) I think we require a conversation at full volume!
THE CHAIRMAN: Could I suggest that we park that for the moment, and maybe you can have your conversation whilst the rest of us are having some tea. Can we move on to the next chapter, indirect and induced effects. The first point I have down here is the question of reconciling participants other expenditure and the hunt income. There is a question of the difference between the number that you get from what the hunt produces and what they think they have received from followers; and what the followers think that they have paid. There is the question of how you have dealt with that. I do not know if anybody has any observations to make on this subject. (Pause). Whilst you are thinking about that, the second one, is the area which we touched upon this morning. That is the question of social activities and this issue of net and gross expenditure, and what you have done to reconcile this by using half and half.
PROFESSOR HERVEY GIBSON: We have effectively said that what the followers told us was the gross expenditure, was the gross expenditure, and what the hunt said they received was by and large the net receipts, and that gives you, roughly speaking, a ratio of 2 to 1 which struck us as not unreasonable, but we did not do -- we understand the point-to-point in particular expected things to mount and we did not do an analysis of the costs of point-to-point.
MR CORBETT: I think most of the functions are actually -- the hunt ball, the margin you actually make on a hunt ball is certainly more than 10 per cent and other social activities -- hunts do run lots of social activities, as we see from the research that has been done by the Alliance this year, and there is quite a lot of expenditure does go out. I mean, I would suggest that we are talking -- the difference between net and gross is probably about another 40 per cent of expenditure and income.
THE CHAIRMAN: You are saying that the gross expenditure that is necessary to deliver a net income to the hunt of, say, £100 is higher than is implied by these calculations. You say that the gross figure would have to be much higher to create a bigger margin.
MR CORBETT: We are all slightly struggling, Lord Burns, in as much as we have not got hard facts on it, but the proceeds from fundraising activities account, I think, by your figures about 45 per cent of the hunt income. Now, that we will not disagree with because that is the net effect, but in order to get that extra 45 per cent they have expended probably for every £10 raised they have probably spent 100.
PROFESSOR HERVEY GIBSON: The question then has to be who, because the supporters more or less say they spend the same on social functions as they do directly to the hunt?
MR CORBETT: But that is exactly the challenge, of course, that when you are running a hunt, when hunts are running activities they do not want to bring in just their supporters, because they are soaking them anyway. The whole challenge for a point-to-point is to get the general public in and get some money out of their pockets.
PROFESSOR HERVEY GIBSON: And, indeed, the banks and Land Rover and everybody else.
MR CORBETT: I think it is a significant figure; we should not ignore it.
THE CHAIRMAN: If we had more followers to follow, the conversations we had this morning imply that would generate a higher level of gross expenditure. We know what the net expenditure is on social items. This would be nearer to the answer you are looking for. But then we would have a bigger discrepancy in the first half of this section. We would have a bigger discrepancy between what people say they have paid to the hunt and what the hunt say that they have received. You can deal with the second part of this by having a larger number of followers, as we discussed earlier in the day. But it actually makes one of the other problems of reconciliation greater.
MR CORBETT: Most of the activities that fall into this category are geared to provide -- to service non-hunt members, sponsored rides, hunter trials. The majority of the entries actually come from non-hunt members, so you would not pick it up in there.
THE CHAIRMAN: Private taxation.
MR CORBETT: As I said, getting money out of the general public.
MR COBHAM: At this stage I should like to say that I think it is confusing to talk about other supporter households, because there is the Hunt Supporters Club whose prime function is to raise money for the hunts, as distinct from the people who are foot followers. The foot followers incur expenditure and are involved in recreational activity. They contribute a little money to the hunt, but generally not in the same proportion as the majority of the hunt supporters club members. The activities of these two distinct groups of people seem to have got wrapped up together and there is possible confusion as a result.
THE CHAIRMAN: Well, that may be a helpful comment to consider.
PROFESSOR HERVEY GIBSON: They are not confused in the survey, but what -- and the reason the figures are presented this way in the report is because quite plainly horse ownership is the big determinant of expenditure and we wanted to break the expenditure into two groups. The survey makes the distinction between several categories of follower and that is one we can reasonably make from the survey, but if you wanted a simple grossing up basis, then quite plainly per horse was the way to do it and that is why the report has presented it in that way.
DR RICKARD: Lord Burns, is there not one possible explanation over and above all the others, and that is that in trying to reconcile horse owning followers with what the hunt say they receive, might that not also be a product of bias in the sampling? As we do not know the extent of that of course we do not know how much of that discrepancy is actually explained by that.
THE CHAIRMAN: I think that must be a point. Although I had assumed that the bias in the BETA survey was likely to be rather less because that was not really the focus of the survey. This survey has been focused at hunting and people know it is focused at hunting. We can see there may be an element of bias. However the BETA survey was not focused on hunting. It was focused more generally. As you say it has worried me all along about asking people questions about hunting at a time when hunting is on the agenda. It is just a very difficult thing to do, but unfortunately we cannot change it. No more points?
MS JAMES: Following on from the discussion about indirect and induced effects, forgive me if I have missed it, but I am under the impression that the report has not paid a lot of attention to the whole issue of hunting tourism, people who travel from their home base to visit other hunts and do not just go for the day but stay away, and also people who come to visit this country specifically for hunting, which brings into question the effect on specific local areas; for instance, where that happens to a greater extent.
THE CHAIRMAN: Lord Soulsby made this point. I do not think they would have fallen into the sample of people, and I think that is another thing we need to think about.
DR CRABTREE: Lord Burns, we are still on indirect effects?
THE CHAIRMAN: We are. I am just about to turn to 5.3, hunt related business.
DR CRABTREE: I have a point on 5.3.8. I wondered if you have got there or not.
THE CHAIRMAN: We were about to move, if no one has got anything before that. Maybe I am the only person who knows where we are in these discussions!
DR CRABTREE: Shall I make a point on 5.3?
THE CHAIRMAN: Yes, we are now dealing with 5.3.
DR CRABTREE: 5.3.8. It was a methodological query really which I imagine in the final text would be explained more clearly because the appendix will contain details of the method. But it seems to me quite a lot of the points you have made, you have calculated some of the indirect jobs from your survey of suppliers and the supply sector you have the expenditure of the hunts, the followers and the social activity as a sort of collective injection, and you have calculated 950 jobs somehow because of those expenditures going into the supply sector. That is my understanding of it. As you point out, that is only part of the indirect effect. I just wonder how you get the rest and I assume you get the rest from the UK output total, but that gives you the total in some sense and then you have to knock off the 950 or make sure you did not double count and if you get the total from the input/output table, the 950 almost becomes irrelevant in the calculation because you end up with a total for the indirect and I am just curious as to how you did it.
PROFESSOR HERVEY GIBSON: My cue to go to the machine, Lord Burns.
THE CHAIRMAN: Yes.
PROFESSOR HERVEY GIBSON: We could easily have written a 200 page report, I think, if we had tried to set out all the possible wrinkles of the model. So when this warms up I will demonstrate it. There are really three models. One is a fairly detailed model of the hunting economy with the rest of the economy on in a sketchy kind of way; another is the full 123 industry model of the whole economy with a little bit added on for hunting and the third is the--
THE CHAIRMAN: I would have said that that was far from being warming up!
PROFESSOR HERVEY GIBSON: I think probably, and the third is what I would call a toy model which just summarises the hunting one and that is the one that can actually answer this point about the 900 becoming a bigger figure. This looks similar to the table in the report. There are a number of important differences which relate to some of the discussions we have had today. There is the balancing item, which I hope answers all of the questions about income and expenditure not adding up, and so on. So that features in various ways. There is a balancing item in hunt expenditure; there is a balancing item in employees, in that employees in this particular version receive 16 million in income, but only make £12 million worth of expenditure. That is because of National Insurance, income tax and possibly some savings have to be deducted, and so here is a figure like the 950; there are small differences between the more detailed model and this one, but that is a figure like 950, and that is, as I said, a multiplier type. There is no multipliers in there, so this is, broadly speaking, a reference style version of the expenditures that were reported in the survey. Now, if we start to look at the indirect. In the jargon one multiplier just looks at the purchases of the businesses. It does not look at any impact of expenditure, and we can look at that in different rounds, so if you press the button once the expenditures change and then the employment changes in the first round and in the second round and in the third round and in the fourth round, and then it carries on going up by smaller and smaller amounts as we go down that declining rate of skyscrapers. So we then get to this figure of a total of 3,692 employees, which is the direct and indirect number of employees. Now, if we want to look at the induced ones, the jargon, that is the type two multiplier, and we can see the second rounds of that and, again, you can see the figure stepping up. What is happening there is as each category is spending more money, it is becoming more income per employees and you can see these figures have been changing fast enough. I have done that too quickly. It is very easy to go back and look again. So we start again from the base, and so here we have expenditure by the rest of the economy, including its expenditure on wages. We have the total wage income received there being 16 million and then 12 million of that is getting spent. So there we can see more money being spent in the economy, more people being employed in the economy, or more people being employed and then, again, there are more, and again, and again, and the wage income is going up and up and up and then when we start to look at the impact of that wage income, then it is 38 million, but people start to spend their wages, that creates more wages for other people, so it is up to 44, 47, 49, 50, 52, and it keeps going. So you end up with these multipliers which are relatively high, in terms of the general literature and the type one multiplier was 1.8 and the type two multiplier was 2.5, and I think there are a couple of these. One is that these are, generally speaking, low income jobs and we have made a low wage assumption all the way through. The second is that when we used the input/output tables, the employment figures we used include self-employment, and that is a very important point in the restructuring and, particularly, in the rural economy. Most of the people that work on farms count as self-employed, so anything that is going into the agricultural sector that does not take account of that is going to have underestimated multipliers and the fact of the matter is that most of the multiplier evidence in the literature, generally dealt with in the literature, are not much to do with these kind of economies at all. They are more to do with industrial economies. So we do have quite high multipliers. So starting from our base we end up with what I would consider to be quite a high figure for employment. Now, perhaps I should have done this first, but this was just to show you what the 35 industry -- what the categorisation is there. So the model that we have used to generate the multiplier distinguishes between the two types of followers, as you have seen, and hunting comes. There is flesh collection and other; there are four types of associated social and sporting events, balls and other social, point-to-points and other animals. There is a whole series of businesses which are similar to those covered in the BETA survey and then we, at the end of that, begin to roll over into the more general businesses, so there is animal feed, incinerators, which is cash equivalent but was counted, vehicles and running costs and so on. These are figures that you can see that are featuring here in the hunt expenditure. We have taken some account of the indirect taxes, rates is in there, national insurance and surpluses and deficits, and, again, if we go back I hope that adds up. If it does not, relatively small amounts, but with all of this we are building a structure and trying to put it into sensible parameters. I think if you look, sorry, could we turn on the other projector at the front. What this has done is takes the surveys that are mentioned in the report and looks at the employment by in each of the categories. Just to make a couple of points: One is the direct by hunts, as we have said many times, is pretty much the same across all four of them, at least as far as the eye can see. Secondly, as we have seen in the discussion, there is this factor of -- well, five in one direction between expenditure by followers in the CRC and the PSG figures and our figure, and the factor of five in the other direction between ourselves and the IFAW and SQW figure. Then on top of that there is the indirect which we are speaking about now, and you can see there a multiplier of 1.84 quite clearly comes out of the shape of our column on the far right. I am quite surprised at the very high multipliers that there are implied in the IFAW and SQW figures, and I wonder whether they have also included induced jobs in theirs, but also I think it is interesting to note that the indirect for both CRC and PSG, and even though we have some disagreements about methodology, the ratio of indirect to direct is pretty much the same in theirs and in ours. The crux of disagreement is the direct expenditure by followers.
THE CHAIRMAN: So the area of biggest disagreement is in the green. The blue follows on from the green, is what you are saying?
PROFESSOR HERVEY GIBSON: The blue broadly seems to me to follow on from the green, even though we do not agree with the way the other guys came to the blue. The blue. Now that is between CRC, PSG and PACEC. We really do not understand how IFAW and SQW could have got such a high blue from such a low green. That might be something to do with these questions about livery stables.
MR CORBETT: Part of the difference of course on the PSG and the PACEC difference is that PSG is not a full-time equivalent, that is jobs.
THE CHAIRMAN: On the methodology of this section, the hunt related businesses, as I understand it, this is where the survey did not prove to be of very much use. You had to use figures which were more economy wide. But you argue that in most cases there was not that much difference between them?
MR COX: That is right.
THE CHAIRMAN: To the extent you had figures from the survey?
MR COX: Yes.
THE CHAIRMAN: Any points on this?
DR RICKARD: I feel I must make the observation that a multiplier of 2.49, and I realise that one can estimate a wide range of values, is incredibly high compared to every other study I have ever seen. I draw your attention to the rural multiplier calculated for Wales of 1.4, by probably one of the better known experts in this area and 1.5 for Scotland. The multiplier used here is staggering; this is way out of the range that most other people--
PROFESSOR HERVEY GIBSON: Those are regional multipliers, not national ones, which are part of the story.
THE CHAIRMAN: Because the leakages are much bigger?
PROFESSOR HERVEY GIBSON: The leakages from regions are much bigger. For example, in Scotland pretty much a third of expenditures in England, a third in Scotland and a third in England and a third in the rest of the world, broadly speaking, so at a national level you have a much higher multiplier, plus if you are talking about two multipliers, then the self-employment is really quite important.
PROFESSOR HERVEY GIBSON: There is another point to make here, that the last time the last full input/output table for the UK was done for 1990, and we have used these 1997 balances, which do not distinguish in detail between imported and domestically produced goods, and we have generated, not specifically or this project but in our general work, a domestic use table; in other words, a table which shows only those goods produced in Britain which has certainly changed between 1990 and the present. In particular, the economy has become more service oriented and therefore in some ways that will tend to have increased the multipliers, because the multipliers in service are bigger than the multipliers in goods because you cannot import a haircut and you can import a computer or a car.
PROFESSOR HERVEY GIBSON: Those are some of the reasons. Having said that, I think we are probably near the top of the multiplier figures, but not wildly out of line.
THE CHAIRMAN: Other than noting this point, I am not sure that we are going to be able to take this section very much further.
MR CORBETT: Could I make one more point while we have the comparisons up? I have not raised a point at all today on the comments that were made about the Produce Studies surveys 1997/98 which has really been the basis of the Alliance projections on employment. We at that time were asked to present a plain English report and a lot of discussion about this, and this is the reason why we concentrated on identifying jobs and there is a fairly detailed analysis within that description of jobs of the extent to which they are full-time and part-time and what the actual earnings were. Those data were drawn from a sample of just over 1300 hunt members, which is a pretty substantial survey and I think it is a very robust sampling procedure. There is a suggestion that by sampling 24 hunts, it was a very small sample. I would argue against that, because what we were trying to avoid was the variance within hunts, which is exactly the point that we have been hearing time and again of bias within the hunt and we actually had a 52 per cent response rate of all hunt members within the hunts that we were interviewing, so this was a quite deliberate decision that we had a pure random sample. I say "a pure random sample" for the selection of hunts and every hunt member was contacted and we had a 52 per cent response rate, so we are talking about a large and robust sample. Now, the final point that we have to come to is the use of GDP which has been ridiculed and mocked and all the rest of it. Again, we were aware that as soon as you start getting to any sort of multiplier effect, you end up with the sort of debate that we are having today, which really has no beginning and no end. This was the reason for using GDP and we would be quite willing to accept that the figure that we have set might in fact be too low. All I would say is that it is quite interesting that the rural tourism calculations, which is produced by the Economic Impact of Recreation and Tourism in the English Countryside, give a figure of 12 billion supporting 380,000 jobs, direct and indirect, which is £31,580 per job. The sports economy as a whole, with an expenditure of 11 billion, supported 369,000 jobs, which is £29,810 per job. This was by the Leisure Industry Research Centre at Sheffield University, commissioned by Sport England. So I would submit that we are not totally alone in being in this sort of area of indirect and direct job relationship. We use 23,000 here; they are talking about 29,000 and, of course, we did do the work three years ago, yes.
THE CHAIRMAN: And what is the implicit figure in your calculation? Is there one?
PROFESSOR HERVEY GIBSON: Too many numbers in my head, I am afraid.
PROFESSOR GEORGE PETERS: Could I ask one question, please, because I am beginning to get very confused? I can understand the calculations that we have just seen, which are done in a standard format. I would not give you very much for the induced effects, because it is very difficult to cover them and it may not be entirely relevant because they could be spread anywhere within the economy rather than in rural areas, but that is acknowledged and you say so very explicitly. But when one has rather large discrepancies of this sort one wonders, for example, with refernce to the Produce Studies work, how it is possible to get from the low base, To this huge indirect effect. Are we still talking about input/output analysis of some sort? Or is there another methodology? In which case, if you are trying to look at this type of comparison, you ought to look in some detail at the type of methodology which has been employed. I cannot think of any better way of doing it than the input/output way, because then you have a certain amount of checking and you have figures which, in my view, look reasonable. Now, I know that Produce Studies have been criticised for having multipliers which are too high, but if their estimate is too large, the other one must be way out of contention.
DR RICKARD: Not impossible.
PROFESSOR GEORGE PETERS: We appear to be talking about a multiplier which is very large indeed. Basically someone needs to try to reconcile these numbers in some way and possibly to look at the methodology which has been employed to get them. It is a very puzzling set of estimates and I am just completely puzzled about the way in which they were derived.
THE CHAIRMAN: I thought it was simpler than that. The interpretation I had taken from this was that the big difference was the green bar. And that the ratio of the blue to the green plus red is not that different in the case of the present calculations from the PSG Study of 1998. And so the multiplier side of it, I understood, was much the same. The thing that we have to reconcile, and which we have spent quite a lot of time on today, is why the green is so different. This is the direct employment by followers where there does appear there to be a very big difference. I think a number of things have been raised. I hope we might be able to pursue it, but I had interpreted it that the size of the multipliers was not the issue of concern.
PROFESSOR SIR JOHN MARSH: Can I just confirm that the PSG study is of jobs, whereas this one is of FTEs?
MR CORBETT: Not the FTEs.
PROFESSOR SIR JOHN MARSH: Yours is jobs. So that would account for a significant part of the difference between these two green areas.
MR MOORE: I was just going to say I thought there were two reasons why there is a big difference. The one is the difference between FTEs and jobs and the other is a use of derivation using GDP per head rather than expenditure per head, and if you were to use expenditure per head you would get a significantly lower figure, and I am really asking you why you did not use expenditure per head to go from expenditure to jobs? So those are the two things that I focused on.
MR CORBETT: You are talking in the blue sector?
MR MOORE: I am talking in the green sector as well, in the green sector.
MR CORBETT: There seems to be very much less argument about measuring jobs than about measuring expenditure and then converting it back to jobs. We actually asked people what they employ; who they employed; how long they employed them for and what they paid them, which seems to be fairly simple.
PROFESSOR HERVEY GIBSON: So the jobs in both cases are direct questions, direct questions plus grossing up?
MR CORBETT: Yes, you have full tabulations and full data sets, are they not, and it is a very clear straightforward, very clear drawn up questionnaire which was not completed over the telephone, and --
PROFESSOR SIR JOHN MARSH: This goes back to a point Ralph Corbett was making earlier of the nature of the rural economy and the placement of long-term employment within the rural economy and the impacts which may be actually to some extent difficult to interpret, if you are taking out a part-time employment as distinct from the normal aggregate measures of full-time employment in this situation, and it is a point you have picked up yourself from the presentation when you explained that the situation for individual people and individual places might be very difficult than that which is implied in these aggregated numbers, but I think it is an important point which we should not lose sight of in that context.
MR ANDREWES: Lord Burns, I have to say most of this last point has left me standing, not being an economist, but, as I understand it, if the jobs were calculated by reference to the total £60 million expenditure, which you have calculated by taking a percentage of the £100 million, Obviously it is going to be a matter of judgment for you and your committee as to what is the proper percentage that should be attributed to hunting, but I think it would be quite interesting possibly to run the model again but with the 100 million in; that is to say assuming that all those horses that were there were used for hunting are included. I accept it is not exact, but it is another way of looking at it and then somebody has to take a judgment, subjective judgment, as to what is the greatest approximation of reality and I have a feeling that would also help to bridge the gaps, if I have understood it right, which I may not have done.
THE CHAIRMAN: Could I ask a question too? If you were doing these in terms of total number of jobs rather than FTEs, would you not expect the multiplier to be lower? This is on the basis that as you go into the second and third round effects you were going to be dealing with industries where there are a greater proportion of full-time jobs. Therefore, the fact that the multipliers between PSG 1998 and your figures are the same, is the result of two offsetting factors. One is that one is using actual jobs rather than FTEs. And the second is that there must be implicitly a higher multiplier on the basis of the other. Because I would have anticipated the multiplier to have been lower than when you were looking at actual jobs, because there would be more part-time work in the rural and immediate employment than in the multiplier stages of generating employment.
PROFESSOR HERVEY GIBSON: I think that is completely the case.
THE CHAIRMAN: I am tempted to say we are in danger of flogging a dead horse here, but
MR CORBETT: Very appropriate!
THE CHAIRMAN: It has been very helpful and I think we have made quite a lot of progress in terms of identifying some of the differences and raising some of the issues I want to get on to the question of the next Chapter. But if there are any issues on these indirect and multiplier effects let us finish them off.
DR RICKARD: Someone mentioned running the model for Alternative scenarios. I, for one, would welcome, given that it is already set up, running one or two different assumptions and seeing the sensitivity to the outcome to that, such as slightly different multipliers and different expenditures. It is not a great difficulty given the model, and it is one way of testing how robust the model is.
THE CHAIRMAN: I agree. I think that is something that we need to consider. One of the conclusions that may well come from the discussions is that we need to look at a wide range of assumptions for some of the more contentious issues. Indeed, in some ways that may be more productive than looking at alternative measures of the effects of a ban, where we have to get into even greater levels of uncertainty. Having said that, I would like to move on to that topic. I have been very conscious throughout, in thinking about this, that the question of how many jobs are currently supported by hunting and the size of the hunting economy is a rather different question from the question of what would happen to those jobs if there was to be a ban. You discuss that in your presentation this morning, so I think we are all well aware of that. The next chapter goes into all this and looks at three scenarios and I would like to begin the discussion of that before we have our tea break. I ask for comments on this whole chapter, chapter 6?
DR WARD: Just a general comment. I know that by the time we get to this stage of the report it becomes most speculative, but I just sense from reading the text that perhaps the question of alternative types of hunting, like drag hunting and bloodhound hunting, has been a little bit overplayed in terms of being a determinant of offsetting. The issue should actually be closer to what Dr Crabtree said earlier in that if there were a transfer of expenditure to any other activity then some form of offsetting would kick in.
MR OLIVER-BELLASIS: Lord Burns, could I make two points? The first is to agree with the contractors over this business of the, if I can call it, switch ability of jobs. I do think there is a real issue about however many people it is, and we are, as Ralph Cobham said, talking about individual jobs. The skills that they might have are not able to be demonstrated as skills that would fit into these new businesses in the countryside, so that is point number one. The second thing is that it is entirely true, as Sean Rickard pointed out earlier, that there has been a continuing drop in numbers employed in agriculture over the last 20 years. I do not think that is in dispute, but I do think that a fair proportion of those jobs have been natural wastage, whereas in this particular case were something to happen to jobs involved with hunting, it is unlikely that the same proportion, whatever that is, would be natural wastage and could therefore be said to be people retiring out of their particular employment. I think the other one is that increasingly farmers are having -- if we called their whole working day a folder, there are different compartments in that folder which will involve maybe livery, maybe things to do with hunting, and if you take a part of that folder away, what are they going to replace that with, and have they skills to transfer that to that proportion of the part-time work which they currently have? I think that that could be quite significant in terms of farmers who are failing to make a satisfactory living from producing off the land and have taken to other jobs which are only part-time.
MS JAMES: Lord Burns, following on from that discussion of uptake of jobs from agriculture, one of the things that I have been involved with is Objective 5B programmes and similar projects that have been involved in regenerating rural areas and the question that arises about uptake of these jobs is what cost implications that has for European funding and social regeneration projects, et cetera. These jobs are lost from hunting either immediately or gradually over a period of time. Similar projects in other areas, for instance the coalfield areas where objective 2 funding has been in operation to replace the loss of employment from the coalfield areas, the cost of replacement of those jobs, particularly when you are talking about jobs that do exist and will continue to exist if hunting continues. So it is a question that do we know what the cost of replacement of those jobs would be?
DR RICKARD: On a general point, Lord Burns, I find myself over here really talking about net unemployment and net loss of jobs, as opposed to gross loss of jobs, which is really what these scenarios have painted. One should not lose sight in looking at this in the round that if, for the sake of argument, £150 million had been spent on hunting, if hunting came to an end, I do not believe for a moment that is going to be put in a tin under a bed or burnt; is going to go back into -- it may not all go back into the rural economy; that is a fair point to try and debate, but it is different from coalmining where we switched our demands overseas. Here we are really saying people are going to switch expenditure from doing one thing to another and the net employment or net loss of jobs on that basis would of course be very different from the proposed loss within the rural environment.
THE CHAIRMAN: I think the point you make is very much the same as was made this morning. I was tempted to ask what it would look like on the assumption that the money that was being spent on hunting, was spent in a way which represented general expenditure across the economy. You could try to trace through what the effect of that would be, both in terms of net jobs but more particularly rural verses urban jobs. Presumably, if that expenditure was distributed generally in terms of consumer categories rather than on hunting, then the outcome of that would be a large proportion of urban jobs than is the case with the rural economy jobs that are currently accounted for. Presumably as you get into the multiplier effects and as you go down your lines, they are not going to be very different as a result of hunting expenditure and as a result of the replacement expenditure. The big differences are going to be up in the direct effect both of the hunt and in the direct effects of the followers. I would not have expected the multiplier effects and the induced effects to be so different. My starting point would be that we would not see that much difference between the jobs indirectly created by this expenditure as opposed to jobs indirectly created by the replacement expenditure. But that is a starting assumption.
PROFESSOR HERVEY GIBSON: I think there is a point which is a very large amount of money in terms of households. If really £6,000 or 7,000 per household is going to be released, then it may not be reasonable to assume that gets spread across all other parts of the expenditure and there might be things that would be attractive to householders in that income bracket.
THE CHAIRMAN: Like homes in the Algarve, or wherever.
MR ANDREWES: I think particularly skiing. I think an awful lot of people who hunt, because it is such a large part of their expenditure either do not have foreign holidays at all or do not have winter holidays. If you are going to model this, I think it would be interesting to see a version of that model where a significant part of the free expenditure is spent on winter sports, because it is a hypothesis. The other point I would just like to make on scenario one is this. I think very properly you talked about people not actually getting rid of their horses; they will not be able to sell them. They are unlikely simply to have them put down -- I think that is probably right -- but you have shown the expenditure falling off in a curve. What will people do? They may keep the horses in stables, but I believe, Lord Burns, they are much more likely to keep them at grass in a New Zealand rug rather than keep them in and being looked after; they will not be clipped; they will not be fed the same way and there will not be anybody looking after them, so, yes, they will keep them but the level of expenditure would be dramatically lower, even though I accept the basic proposition.
THE CHAIRMAN: That is very helpful.
MR WAKEHAM: Lord Burns, I think this is also related to the question of migration to other equestrian activity and, again, I am sorry to keep going back to the 1998/99 survey, one of the reasons that we employed Produce Studies was because of their knowledge of the agricultural sector and therefore the equestrian sector. One of the things we asked them to do was to look at the age profile and the gender profile and also the socio-economic profile of all these various activities, and hunting was significantly different to the other activities. For example, you have a much older profile for hunting; you have fewer children; you have more in eventing, younger in eventing than in hunting and so on; more men by comparison with the riding economy as a whole. So what I want to ask really -- I do not know if there is an answer -- is it right for us to use that as an example of what might happen if hunting was banned? Would people because they are older simply stop riding because they have nothing else to do? They cannot go eventing because they are too old.
THE CHAIRMAN: I think that is part of the discussion that we are having about where the expenditure goes if it is not to go on hunting. Some of it may go in other forms of horse activities; some of it may go on skiing holidays; some of it may go on expenditure more generally.
MR WAKEHAM: Absolutely. We are coming to the point of view --
THE CHAIRMAN: Most of it will be spent in one way or other.
MR WAKEHAM: But we want to keep it in the equestrian economy as best as we can.
DR RICKARD: I think in some respects this does go back to our discussions this morning. People, for the sake of argument, who currently hunt still continue to ride and engage in other horse activities? Of course a lot of expenditure goes more or less back to horses, the two things are tied up. We need a better idea as to what extent people who currently hunt really are going to pack it up.
MR OLIVER-BELLASIS: Lord Burns, I think there is a real problem here, because we are trying to look at something nationally when, as we have had in others of your seminars, the answer is going to be incredibly different between local and regional and I think the difference between Rosemary's example of a (inaudible) and, for instance, mine in Hampshire, the two answers will be completely different because the mix is different. I think that it is extraordinarily difficult to put a general overlay on something which is affected by custom in that particular part of the country
MR SWANN: Thank you, Lord Burns. This seminar is a first; it is the one at which I have had least to say and one in which Hugh Oliver-Bellasis has said something with which I totally agree. I think the point is that throughout the whole of the inquiry submissions, one thing that has become apparent are these local differences and throughout the Alliance submission, on the social grouping of people who go hunting, it is evident that in some regions we have to look at the difference in what is actually described by hunting. We have some of the hunts where we have a very wealthy population locally; we have high value horses which require a lot more to keep and there is much more expenditure going into livery, much more expenditure going into employment because people can actually afford to employ people to look after these horses, but then you can look at other regions of the country where the type of horse -- I made this point earlier -- is not as expensive. The hunt is attended by people from a much wider group. I believe this is the norm in a majority of hunts, but others may choose to correct me, and what is lacking here is an accurate differentiation between these people who keep their horses for multiple use; they are just your ordinary types of horses people like to ride and will go hunting with, but they are going to carry on all other activities and they are going to continue to look after the horses in exactly the same way. We need to differentiate that group from what I believe to be a very small group of people who keep horses predominantly for hunting and I think these are the more expensive horses, the ones on which most expenditure is put and I think that is the minority, but I think they are dominating your figures and that is just an observation as an economic layman, but I think one which I believe is valid.
THE CHAIRMAN: Are they more likely to be people who go skiing?
MR SWANN: Absolutely not, apart from the top end. They are also perhaps the ones who might go to Ireland and hunt, but for the majority people who hunt I do not think things will change dramatically.
DR CRABTREE: Could I make a comment on an aspect there has not been any discussion before? 6.3.2 talks about the time pattern of the economic impacts and it implies that, I think it actually says this would not happen overnight, in other words the implication is it will be slow, this will cushion the blow, people will have more time to adjust and so on. I think there are a number of things to pull out of this. One is if the legislation gave a fairly immediate date when hunting with dogs had to stop, then for the hunts and the followers, there would be very rapid adjustment. It clearly depends how the followers adjust. That might be a bit slow, the huntsman will have to adjust overnight. So that this slow time pattern of change is perhaps not quite as it would appear. But there is a difference here. If the Bill said the legislation, the ban, comes into effect in two years time or something like that, then that would give two years for adjustment to start and perhaps here it is not entirely clear what scenario is being assumed, because I think if the Bill is coming in very quickly, then there would be quite a an abrupt reaction that had to take place and not much time to cushion the blow, particularly on employment by the hunts and some of the followers.
PROFESSOR GEORGE PETERS: I think Lord Burns made a key point in discussing alternative scenarios. The obvious starting point is to distribute expenditure in the way that general expenditure is distributed, and then you cover Bob Crabtree's point as well. But I am wondering really how detailed one needs to make this exercise. There is a report on growth in rural areas -- this is in Table 6.3 -- which has a projection of 590,000 jobs being created in rural areas in the decade. Now, lots of people are saying, but the people who are now employed in the hunting economy cannot possibly take those jobs because there is a mismatch. Well, this is not necessarily true because if there are 520,000 jobs created in rural areas, a lot of those jobs are going to be jobs servicing people who are coming in. If you are tele-cottaging you want someone to do the garden, let us put it that way for illustration. So it seems to me that if there is this rather vibrant rural economy - contrasting with the agricultural economy - one does not have a really great employment issue to deal with. The thing that would worry me is whether there is more credibility in the larger estimates than in the Cambridge ones, and that seems to be the crux of the issue. If we are talking about orders of magnitude at the lower lever of this amount, we are not frankly talking about much. It sounds like unsympathetic "economists speak", but this is the truth of the issue. The other point about it, of course, is that if people lose their jobs nowadays there is normally some sort of compensation. For example, BMW is going to have to put up half a billion for the potential compensation fund for whatever happens to Longbridge. Farmers get compensated for reductions in farm gate prices. Most of the common agricultural expenditure is now compensation. So if we make an economic change in which some people lose, and in which other people, presumably, gain, (they get a satisfaction from not having to contemplate the hunting of the fox), how should the losers be compensated? It is not going to take a lot of money, because there are not many people involved. I would suggest that with the sort of numbers that we are dealing with, the type of growth that is likely to occur in the rural economy and the possibility of compensation, that we should not be worrying all that much about the economic consequences of a ban. I think I have said enough!
THE CHAIRMAN: Possibly too much! I think we should now have a cup of tea and just take ten minutes and then come back. Then I would like to give each person a chance to have their final say about this whole subject in the way we have been doing these seminars. I will start with Bill Swann after we have had our cup of tea and go round the table in that way, ending up with the speakers and see what they have to say in the way of final points. Thank you very much.
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