Thursday, 11th May 2000 (10.30 a.m.)
THE CHAIRMAN: Good morning and welcome to this seminar on the impact of hunting on the rural economy. We are very grateful to have the draft report and welcome to Barry Moore and his colleagues. Welcome also to other members of the seminar. I hope you both find it interesting as well as being able to help us with your participation. A number of people I come across think this inquiry is mainly about the economic effects, no doubt partly because of my involvement in this and some other Members of the Committee. But as veterans of the process will know our remit goes much wider and we have been discussing a lot of other issues. Nevertheless this does remain an important issue. We have been following a reasonably well defined process in these seminars so far, although today I propose to make some changes. This is not merely to keep people on their toes and to create a bit of uncertainty, but reflects the nature of the report. We will have the opening presentation as usual. In other seminars we have then had a period for dealing with questions of fact and interpretation and then moved on to more general questions. Given the nature of the report I thought maybe today we probably should do it the other way round; we should begin with some general questions about the approach that has been used and get people to comment on that. Then we will move on to going through the report almost assumption by assumption and issue by issue to see how people feel about the building blocks of it and the various assumptions that have been used. Then we will come back after that to some of the more general issues. I hope that people are content with that approach and do not think I am changing the rules as we go along. I will now turn to Barry Moore and ask him to introduce his team and then we will get on with the presentation. After that I will be looking for observations in terms of general remarks about the approach that has been taken before moving on to some of the more specific and detailed questions of the assumptions that have been used and the way in which it has been done. Barry.
MR MOORE: If I can just introduce the team to you. To my immediate left is Professor hervey gibsonProfessor hervey gibson from Glasgow Caledonian University in Scotland. He has been primarily responsible for the development of the social accounting matrix, which forms the heart of the methodology and the approach. To his left is Mark Cox, who has done a marvellous job managing this project in a relatively short time; a matter of a few months. Mark is a Director of Public and Corporate Economic Consultants who are responsible for the draft report that you have. I suppose one point I would like you to bear in mind that this is very much a first draft report and I would hope that the meeting here will lead to constructive criticism, ruthless criticism, knowing Terry and I hope as a result the report will be improved significantly when we move towards the final draft report. Mark Cox will give the presentation and we will make our contribution when the questioning starts. Mark, over to you.
MR COX: Thank you. Thank you, your Lordship, for the opportunity to come along today and present our report. As Barry said, it is very much a first draft report and in some places we would readily accept that the supporting text in particular needs to be developed so the derivation of some of the calculations we have made is clear. I am going to have to ask you to excuse me if from time to time during the presentation I turn round to reassure myself that what I am talking about is actually what appears on the screen. There has been more than one technical problem this morning and we have had trouble linking our computer up to the system and getting our slides in a presentable shape. So if we could just hit the first button. Next one please. What I shall do is present a very brief digest of our draft report, starting with a reminder of the aims and objectives of what we were asked to do, then proceed to a summary of the previous research that we looked at and describe our overall approach and methodology. I will then talk about the direct effects of hunting and then switch attention to the indirect and induced effects of hunting at which point I shall probably ask hervey gibson to contribute because he is much more of an expert on that side than I am. Finally we will talk about the scenarios for the possible effects of a ban on hunting with dogs, to see how that affects our calculations of the size of the hunting economy and its relationship with the rest of the economy. If we could have the next slide please. The overall aim of our work was to measure the size of the hunting economy and to see what would happen if hunting live quarry with dogs were to be banned. What we actually did was to undertake two of the research contracts, which we rolled into one. One of the research contracts was concerned primarily with the direct economic effects of hunting and the second one was concerned mainly with the indirect and induced effects, but it was, in our view, a good decision to run the two contracts together, because it was a much more coherent approach to doing the work. Reviewing the specific objectives: we were asked to look at earlier research on the economic effects of hunting and possible effects of a ban. We were asked to closely examine the survey data that had been collected earlier this year from the hunts by the Countryside Alliance. We were then asked, mainly using the Countryside Alliance dataset, to estimate the direct expenditure income and employment of the hunts. We undertook our own original research to estimate the expenditure and the direct employment of hunt followers, and we also undertook original survey research to enable us to calculate the indirect and the induced economic effects of hunting. One area where we have not perhaps taken the work as far as we will ultimately want to, is providing estimates of the urban rural split in economic effects and also providing estimates of the regional breakdown of economic effects. So if we could have the next slide please. The review of earlier studies that we undertook focused mainly on major national studies, particularly but not exclusively those that involve some primary research, and the three main ones were: first of all a study in 1997 by Cobham Resource Consultants for the Stanning Conference on Countryside Sports; a 1997 report by Segal, Quince, Wicksteed for the IFAW and a 1998 study by Produce Studies for the Countryside Alliance. In the table shown on this slide we summarise estimates from those three major studies alongside estimates of direct effects by McKenzie, which is from the 1980s, and the estimates that have been published by the IFAW, although we were not able to examine the IFAW's own work and examine it critically in the same way as we were able to examine the other work. Going straight to the bottom of the table, it is evident that there is quite a distance between the highest estimate of total employment and the lowest estimate of total employment attributable to hunting. The difference is a factor of six. However, looking at the estimates for direct employment by hunts, they are tolerably close together. There is only a difference of a factor of three between the highest estimate and the lowest estimate. The striking differences, and the real bones of contention, I suppose, are to be found in the estimates of direct employment by hunt followers. You will see from the summary table that the difference between the highest estimate and the lowest estimate is a factor of 20 and I will talk about some of the possible causes of that major difference shortly. We also summarise the indirect employment estimates and the induced employment estimates. They tend not to vary as much as the estimates on direct employment by followers. So in summary, previous estimates of total employment in the hunting economy have varied from just below 4,000 to almost 23,000. If we could have the next slide please. We carefully examined the methodologies that were deployed to produce the various estimates that I have just been talking about and it soon became clear that there were a host of discrepancies and problems, particularly affecting, as I suggested, the estimates of employment and expenditure by followers and to a lesser extent the indirect and induced economic effects of hunting. We list on this slide some of the problems that became apparent when we examined the methodologies alongside one another. There is, for example, no agreement on how jobs should be standardised into full-time equivalents. It was evident that there had been some double counting of expenditure by hunts and by their followers. There was clearly, in our view, some survey bias towards followers who are more than averagely involved in following the hunt and that tended to distort some of the expenditure and employment estimates. There were problems in allocating horse expenditure for all purposes to expenditure on hunting horses in particular. There were, on a number of occasions, in two of the studies that we have mentioned, some quite unsound or meaningless calculations used to calculate employment and indirect employment from followers' expenditure. We found, for example, in two of the studies that followers' expenditure had been divided by GDP in the equestrian sector and it is really a meaningless calculation. It is a bit like dividing the amount of chalk by the amount of cheese. You cannot do it; they are two entirely different things and you do get very false estimates when you do that. If you could move to the next slide. The approach we decided to use was an input/output approach. We decided to do that because building input/output tables requires accounting for all flows, income and expenditure in the hunting economy, within the hunting economy and between the hunting economy and the rest of the hunting economy. The discipline of building input/output tables means that double counting is avoided. It ensures that all relationships are treated consistently. Input/output tables are also extremely useful devices for calculating multipliers and they are robust and powerful frameworks for the evaluation of scenarios, questions of the sort: what if such and such were to happen? The data collection and original survey work that we undertook was driven mainly by the need to feed data in to the input/output tables and that involved cleaning of the data that was supplied to us by the Countryside Alliance and developing it a bit further on the basis of the follow-up survey of Hunt Masters and Treasurers which we undertook, a survey of hunt followers and a survey of suppliers of hunt related goods and services. Having undertaken that original survey work, we then constructed our basic input/output tables and calculated the indirect and induced effects. We then developed scenarios and tested them using the input/output table. On the next slide, we illustrate, in a fairly simple form, how the input/output approach works and, in essence, inputs, which take the form of expenditure by hunts and by followers, create outputs in the form of employees' wages, goods and services purchased which are then turned into employment, both direct and indirect. Both the direct employment and the indirect employment have a knock-on effect creating an induced economic effect. What happens when we test scenarios with the input/output tables is that the inputs change, so that changed inputs will feed their way through this flow diagram so that a different total figure for direct, indirect and induced effects employment will result, and we will come on to describe which of the scenarios we used and how we specified them. If I could talk now about the direct effects of the hunts on income, expenditure and employment. The first stage of our work was to clean and validate the data from the very large majority of registered hunts in England and Wales that had been covered by the Countryside Alliance survey. We had to remove some non-eligible hunts, because they were Scottish. There were also one or two duplicates. There were one or two completion errors. But by and large the quality of the data in our view was good and it was evident that not only had the hunts supplying the data taken due care and used their best endeavours to supply good information but also that the information had been treated properly and had been processed accurately. Then from that raw clean dataset we produced grossed up estimates of income, expenditure and employment, because although we had 279 observations, we were missing 23 and we had to take account of those missing 23. Having done that, we made adjustments to the grossed up Countryside Alliance data, on the basis of the follow-up survey work we did with the hunt Masters, where we were also able to identify some gaps in the data that had been supplied. We were able to correct some completion errors and perhaps most importantly, we were able to obtain a much finer level of detail, particularly on employment, types of employment, job titles, for example. We were able to disaggregate hunt's income into many more categories than the Countryside Alliance survey managed. We were able to break down revenue or operating expenditure into much greater detail. So on the basis of that work, we produced what we choose to call our preferred estimates of income and expenditure and employment of the hunts in England and Wales, and those estimates are summarised in the table at the bottom of the chart here. Very briefly, it shows that the hunts employ directly about 710 full-time equivalent employees. Their collective income is a little bit less than their revenue or operating expenditure. One thing in particular that we did, that the Countryside Alliance survey did not do, was to collect information on the income that the hunts received from the collection of fallen stock and it is evident from this final two lines in the table that collection of fallen stock, far from covers its cost from the income it derives. If we could turn now briefly to the direct expenditure and employment estimates of hunt followers on the next slide. We encountered some of the same problems that earlier research encountered in that our survey response was skewed in favour of people who described themselves as more than averagely involved followers, and the reason why that happened was that because of the very short time we had available we were dependent on the Hunt Master supplying us with contact names for our survey. So in fact more than three-quarters of our sample of hunt followers described themselves as more than averagely involved. However, that did not matter in the end, because when we examined our data we found that there was a very strong linear relationship between total expenditure by any follower or follower household and the number of horses they kept. So for example one horse kept equated very closely to £2,600 expenditure on all horse activities and 10 horses equated very closely to £26,000. So the bulk of the survey data from followers, which was from the horse owners, was grossed up to a control total of a number of horses in the population rather than to debatable and contentious estimates of the number of followers or follower households in the population. On that basis we got an estimate of the total expenditure on all horse related activity and by asking the followers, horse by horse, what proportion of its time was devoted to hunting, we were able to net out the non-hunting expenditure. So we came up in the end with an expenditure estimate for all followers of around £65 million. We were further able to estimate from the information that we got from the survey that the followers employed between them just under 1300 full-time equivalent employees to look after their horses. If we could turn now to the indirect and induced effects. I think it might be appropriate for me to give way to Harvey at this stage, but simply what we did was to use all the various survey data we had to hand to create an input/output matrix or social accounting matrix for the hunting economy, which we then set into the context of an input/output or social accounting matrix for the whole economy, so that we could trace and estimate the indirect and induced employment relationships. The summary matrix we produced is very much a collapsed matrix, as shown in the table there. Do you want to have a word about that, Hervey?
PROFESSOR HERVEY GIBSON: Yes, I think the report rather than the slides is a better way of setting up the structure that we have used. The main reason for putting it into a matrix, into a table, was to enable us to avoid double counting and also to follow the flows through in the way that is shown on the diagram that you have already seen. So moving from the direct expenditure on to the indirect then. This is spending by hunts and by followers, some of which ends up in hunt related businesses and some of it ends up in non-hunt related businesses. Broadly speaking about three-quarters is in the kind of businesses that are covered by the equestrian trade surveys and about a quarter is not and of that quarter, pretty well half is to do with vehicles and transport and so on. We attempted to follow up the survey that had been done on the suppliers to the hunt and had a number of useful and interesting conversations with hunt suppliers. However, we found they were a very coy lot. Only about half of them were able or willing to disclose their turnover and in the end only, I think, 22 were able to talk about their costs and half of those were in the retail or wholesale sector, so their costs were not really terribly relevant to the economic impact of hunting. So we were reduced to using national sources to get at the cost structure of these industries and the main national source was this document, the input/output tables for 1997, which is published by the Office of National Statistics and is the basis on which the UK's national accounts are put together. Well, unfortunately, the next slide I think, can we try -- yes, the next slide you will need to refer to the page in the hand-out, which is what I call the declining skyscraper. What this shows is in the first column the effect measured in jobs. We turned expenditure into jobs by looking at the industry that was receiving it and dividing by sales per employee and essentially that is the figure taken from here of the employment statistics for the UK. So you can see on here the rural indirect and urban indirect producing in the first about 1000 jobs: roughly speaking three quarters of those are in equestrian trades and hunt related trades and about a quarter in other jobs, in other trades. Then as those businesses spend the income they receive, we move into the second round, where you can see the indirect goes to about 300 and then into the third round about 100 and in the fourth round about 50 and so on. So fairly rapidly declining as money leaks out of the hunting economy into the rest of the economy. So that is the direct and the indirect. The induced takes into account a third factor, which is what happens when all these supplying businesses and indeed the employees directly involved spent their income. Now that leaks out of the rural economy and out of the hunting economy much more quickly because if an employee buys a car then it gets made at Longbridge or Dagenham or somewhere; it does not get made in rural England. But as you can see, nevertheless in terms of the total economic impact the induced is a significant amount and it extends the tail of these declining skyscrapers. I think probably that is the point to hand back to Mark.
MR COX: I think it would be useful now to summarise the various estimates we produced for direct, indirect, induced and total employment and compare them with the previous estimates that I talked about earlier. If we could have the next slide. In each case our estimate is shown at the bottom of the cell. So on direct employment by hunts we estimated 710 full-time equivalent employees, which is about the middle of the range of previous estimates. Our estimate of the direct employment by hunt followers is towards the bottom end of the range of previous studies and it is 1,291 employees of hunt followers. Our estimate of indirect employment by suppliers of hunt related goods and services is just under 1700 and, as you will see, it is lower than any of the estimates produced previously. Our estimate of induced employment is just under 1300, and it is a bit difficult to compare it with previous studies, partly because not all of them have estimated it, and one of the other two concedes that the estimate they have used might well be an underestimate. So in total we estimate that the total employment in the hunt economy is just under 5,000 full-time equivalent employees. I think we can turn now to the subject of what might happen in the event of a ban on hunting with dogs, our scenario analysis. If we could have the next slide. What I would like to emphasise here is that what we are presenting are not predictions of what will happen, but they are demonstrations of what would happen to outputs if certain assumptions are made about the changes in inputs under different scenarios. We developed three different scenarios, each of which has different implications for inputs into the hunting economy and hence for outputs from the hunting economy. The first scenario was summarised as "the collapse Scenario", where we take at face value the views expressed to us during the survey work that we undertook about what would happen, for example, to the point-to-points, hunter trials, puppy shows, et cetera, which are closely related to hunting and from which hunts derive quite a considerable proportion of their income. The views of the hunt Masters and Treasurers we surveyed were that those activities will very quickly cease. They also told us that in the event of a ban on hunting with dogs they would very, very quickly cease their collection of fallen stock, which implies that they would not switch to drag hunting or hunting with bloodhounds. The followers we surveyed indicated that by and large they would not switch to alternative forms of hunting and they would not keep most of the horses they currently keep. However, they also made it clear that they would not immediately dispose of their horses because there would be no market for them; they would simply not replace them when they had reached the end of their working lives and that enables us to time profile changes in outputs under this scenario. The suppliers we surveyed also indicated that their staffing levels would be reduced. The second scenario which we examined is the one we called "the partial replacement scenario", where we are assuming that there would be a replacement of one third of the existing live quarry hunts by drag hunting and hunting with bloodhounds; that the closely related activities, such as point-to-point, would all continue in the short-term, but would then tend to fizzle out over time to one third of their previous level and that the drag hunting and the bloodhound hunts that replace the live quarry hunts would have lower expenditure and employment than the live quarry hunts, partly because packs tend to be smaller, certain employees for example, terrier men are not required in alternative forms of hunting and because the literature suggests that the people who follow drag hunting and hunting with bloodhounds spend less and tend to have fewer horses than the people who follow fox hunting. The third scenario which we examined is what we call "the full replacement scenario", where all existing hunts are replaced by drag hunts and bloodhounds; that all related activities would tend to continue, but as in the previous scenario the hunts have lower expenditure and employment and the followers spend less money. We can then show in the next three slides what happens to the overall estimates of employment in the hunting economy if we apply the scenarios. Under the scenario number one, the collapse scenario, as compared with the baseline, the status quo of just under 5,000 employees, employment in the hunting economy, we believe, would fall very rapidly to a very small fraction of its current level, down to just 666 employees altogether or in other words 87 per cent of the employment would disappear. Most of the fall in employment would happen within the first three years. There would be a tapering off because, as I suggested, although the hunt followers would tend to withdraw their involvement, they would still have their hunting horses which they would not necessarily dispose of immediately. In the second scenario, the partial replacement scenario, employment eventually falls to just over 2000 or 58 per cent fewer than are employed currently in the hunting economy. Again, there is initially a rapid fall in activity, in employment, followed by a more tapered reduction. In the final scenario, the full replacement scenario, there is still some reduction in employment because, as I was suggesting, there is evidence that draghound hunts and bloodhound hunts do not need to be as large and employ as many people as fox hunting, for example, and that the followers of these alternative forms of hunting do not quite spend as much on the hunting as followers of live quarry hunting do. So there is a reduction in employment, but it is very modest, an overall reduction of 7 per cent after 10 years. If I could, finally, talk about how we could put those scenario analyses into context. Clearly, the three different scenarios all imply some loss of employment and it implies a loss of employment of anything from just a handful of jobs to many thousands of jobs; in the worst case the job loss would be over 4,000. In this table what we show is that any job loss that might be associated with a ban on hunting with dogs would be small in comparison with the employment growth that has happened in rural areas in England and Wales, and which is predicted to happen in the rural areas in England and Wales. So we show, for example, that in the 1980s employment in the rural areas grew by nearly 600,000. In the 1990s that was repeated. In the first decade of this millennium we are predicting, using our own forecasts, that employment in rural areas will grow rapidly, but not quite as rapidly as before, but still we are talking about a 500,000 increase in employment compared with a possible loss of 4,000 jobs if we take the worst case scenario that we looked at. Even in the remote rural areas, where a lot of the current hunting activity is concentrated, there has still been considerable growth in employment. Nearly 190,000 in the 1980s, 130,000 in the 1990s and we are forecasting employment growth of 120,000 in the current decade. These figures for employment growth in rural areas might welcome as a surprise, given that there has been tremendous media coverage of what has been called "rural decline". What has actually happened in rural areas is that the traditional rural industries have declined and are still in very considerable distress and are likely to decline further. But there has been a very rapid growth of non-traditional rural industries in rural areas, and it includes businesses in a very wide range of industrial sectors, but the sort of businesses we are talking about are very often lifestyle industries where people are taking the opportunity to leave the city, set up a business and work from home very often or very close to home. We would not want to, however, minimise any pain that might be associated with a loss of employment from the hunting economy because, clearly, loss of hunting employment will not be painless, even though there has been very rapid growth in rural employment and although we are forecasting that this rapid growth will continue. The reasons why we say it is not going to be painless is because the job losses from the hunting economy are likely to be very localised and it does not follow that the growth in rural employment will happen in exactly the same localities that are affected by a loss of hunting employment. It will be painful for the individuals concerned because the skills and occupational profile of the people who will lose their jobs in the hunting economy are unlikely to match the skills and occupational profiles of the new employment opportunities that are emerging or are going to emerge in the new rural economy. We know, for example, that in terms of the Government's standard occupational classification, most hunt related employment is in what is described as "other occupations". In the rural economy as a whole the forecast is that employment in that occupational group will decline, but the job creation will mainly happen in occupational groups such as professional occupations, associate professional and technical related occupations, in clerical and secretarial occupations and in personal and protective services occupations. So there will be an occupational mismatch between the jobs lost and the jobs that are going to be created. Finally, on the issue of redeployment, we believe that even when former hunt employees can compete for new employment opportunities, their reabsorption into employment will tend to be a protracted process. Previous research we have done, examining the effects of large scale redundancies, has suggested that two years down the line only around half of the people who lost their jobs are in some form of employment. A considerable proportion two years later are still unemployed and a considerable proportion become discouraged and quite often cease to become economically active. I am sorry if that has taken rather longer than hoped for or anticipated at the outset but clearly there is a lot of meaty figure work there. May I simply conclude, my Lord, by saying that we do want to do further work on the report; it is just a draft report, and in particular what we want to do is to develop the text in the report to make it clearer where some of our numbers came from. We will be doing more work to breakdown our estimated effects between rural and urban areas and we will want to do more work to provide a regional breakdown in the various estimates that we have produced. Thank you.
THE CHAIRMAN: Thank you very much. I think we can all agree that there is a lot of figure work. We appreciate that it is a draft report. We also appreciate that the report had to be written in a very short time but I am afraid that was governed the timetable that we had. I would now like to take some general points. For example, anyone who wishes to comment on what the report says about the literature and the other studies; the whole question of the accounting matrix approach and whether or not it is sensible and how far that takes us; and any general points or criticisms any members of the seminar seated around the table wish to make.
DR RICKARD: Thank you very much. May I make some brief general observations. The first point is that we agree that input/output analysis is the correct way of approaching this problem and we have no problem with that. However, like any methodology or any tool, it is really only as good as the data that goes in, or indeed only as good as the skill with which the model is used. By Professor Gibson's own admission a lot of the data that has been used is biased upwards. Your data on hunt followers, you have more or less admitted, is biased upwards and I am not sure, but I believe that you have not fully recognised that in your report. I only make a general observation rather than detailed one at this stage. I think it is probably and I apologise if I have missed this, that VAT has not been taken out of hunt follower's expenditure before calculating the effect on the economy. The next point is that the multiplier used of 1.84 is a bit high and it would appear high by reference to other studies. When these two factors are put together we are in danger, I think, of considerably exaggerating the impact on employment. I appreciate there is no definite data; I appreciate that one is never going to get it, but I do think in this report you might allow for that by perhaps putting forward either some greater attempt to adjust the data or show what would be the effect of perhaps slightly lower figures. Finally, I come to the point about the longer term impact of unemployment within rural areas. You spent a fair amount of time at the end of your presentation talking about changes between jobs, et cetera. Unfortunately you do not in your report spell out exactly how you arrived at these sort of effects and I do think that it is important here when we are talking about the economic consequences of a ban on hunting, to put it in context of the rural economy and make very clear that we are talking about the net effect after a number of years on unemployment. I am aware of the fact but agriculture, for example, has shed something like 7,000 full-time jobs a year for 25 years and we do not see mass unemployment in rural areas and I feel you have not really given the correct weight to how quickly these jobs will actually be absorbed back in rural areas and therefore the net effect within a two or three year period might, I suggest, -- subject to further work on it -- be a great detail lower than you just implied at the end of your presentation.
THE CHAIRMAN: What I think I will do is collect a few points together, if I may, before calling upon you to respond.
MR CORBETT: My Lord, Sean has raised the point that a model is as good as the data that goes into it; I think we all would agree with this. Mark Cox also made very real point that the real bone of contention in the difference between the figures really arises out of the work that has been done in the follow-up survey of hunt followers. Broadly the numbers match amongst the hunts themselves. Where they do not match is amongst hunt followers and I suppose I am correct am I, in saying that from what you were saying, that really there is an absence of trade data because you hit so many problems in the trade survey that you have actually had to use another technique. Now on the hunt followers could I ask one or two quite specific questions about the methodology that has been used for this sample? We are talking about --
THE CHAIRMAN: Sorry, could I just interrupt? At this point I would rather not get too much into the detail of the particular assumptions that have been made. I would like to come to that next, by going through the report bit by bit. I am happy to have your general observations on this but I would want to take those issues which are more detailed in turn a little bit later.
MR CORBETT: I think the general observation, my Lord, is that this would have to be a very robust sample in order to be able to make the projections that have been made and as we are talking about 115 subscribers or members and a further 60 supporters, really the bulk of expenditure is on these 115 people. I think we do need to look very carefully at how a sample could be robust enough to represent the entire hunting sector of these approximately 115 people and maybe I could return to this later on.
THE CHAIRMAN: Yes, I am very happy to do that.
MR WAKEHAM: My Lord, can I ask one question about the dataset, the actual source of information. It appears that the work that we commissioned from Produce Studies in 1998 when the field work was done and published in 1999, which included a number of questions about hunting not previously included in the 1995/1996 survey was not used at all and I just wondered why.
PROFESSOR GEORGE PETERS: Thank you. My name is George Peters. I do not know whether this is a point of detail or a point of principle, but first of all I think the methodology is broadly correct; it is obvious that this is plainly the only conceivable way of tackling the estimation But I am still worried about some of the details. The first point is that Some of this is not very "rural". The loss of a job in Littlewood Pools in Liverpool (say) because employees of hunts can no longer afford the stake money is the loss of a job, but the spread is important and you have a method which has the widest possible range of effects. I realise that you know this, but nevertheless, it seems like a rather fundamental difficulty. The second point is that I cannot understand your Table 1. Social accounting matrixes are supposed to have rows and columns which add up and these do not. It is a very mysterious item. For example, if you look at the table, (it was on the slides that were put up), you see it immediately from the last column, (employees), where employees pay to the rest of the economy £41.2 million and total expenditure is then said to be £54.9 million. Then if you go to the previous column, the rest of the economy to the rest of the economy, there is a figure of £175 million and the numbers only add up to £120.4 million. Now there is some technical manipulation going on here, which I do not quite understand and which should be sorted out.
THE CHAIRMAN: I agree.
PROFESSOR GEORGE PETERS: Can I perhaps stop there and come back at a later stage?
THE CHAIRMAN: Yes, I think there are a lot of us who tried to add up these figures and had some difficulty.
MR COBHAM: My Lord Chairman, a number of allegations or Critical comments have been made about the earlier work undertaken by Cobham Resource Consultants on behalf of the Standing Conference on Countryside Sports and I have to express more than mild surprise by a principal statement relating to the direct participant employment where we are alleged to have derived that by applying an average wage factor related to total follower expenditure. At no time have we undertaken or prepared any estimates relating to direct employment, based on expenditure figures. In every case we have either ourselves or through secondary data prepared by other consultants counted or attempted to count heads. Quite a lot of the critical comments that are made by PACEC in this Section of their report are not well founded. I have to say that if the consultants had come to see us there would have been a full explanation covering each of the detailed items. I have to request, please, that they liaise closely with us before the report is finalised.
MR BURKE: A simple question, Lord Burns, that perhaps Mark Cox might be able to dispose of immediately. Mark said that he was not able to examine the IFAW work, which is summarised in the first table. Did he request it? Was the data forthcoming?
THE CHAIRMAN: Would you now like to deal with the range of points that have been made?
MR COX: The range of points?
THE CHAIRMAN: In whichever order you want.
PROFESSOR HERVEY GIBSON: Sean Rickard, I think, started with three points: one was that 1.84 is high and a third of the (inaudible) split. On that, yes, this is potentially an issue but one of the things that became very clear is that the hunting economy is a pretty informal one and one would not be entirely sure that every penny of that due to Customs and Excise has necessarily reached them and of course indirect taxes are treated within the input/output tables and for the followers expenditure, those were used. So their impact will have been taken account of. Perhaps I should say a little bit more about the models; a particular table that does not add up. The problem is going from Excel which has to add up to Word, which is made to look pretty on the page, and there are balancing items which would have made it look really ugly for you, Lord Burns. We are really sorry, but in fact we have, I can perhaps set up the other computer over lunch and we can show you the tables proper. In fact there are really three versions of the social accounting model. One of them has about 30 sectors for the hunting economy and about three or four or five for the rest of the economy. One of them has one sector for the hunting economy and 123 for the rest of the economy and that is basically based on the input/output tables. One of them is the condensed one that you have seen in the paper, but the ones that we actually use for doing the sums are the much bigger ones. Then thirdly on the rural urban split, well, this has been said, this was originally two contracts let over a six week period and the indirect induced necessarily have to follow after the direct, so that left on a straight timespan about a week to do the indirect. The rural urban split was done by inspection on the industries and that seems to me to be not at all unreasonable. We did, when we were talking to suppliers we asked them about how many of their employees lived in the countryside and so on, but the sample was far too small for that to be of much use but it does seem reasonable expenditure on farriers -- clearly expenditure by hunts and followers is rural, expenditure on farriers is rural. Expenditure on vehicles and vehicle maintenance, at least initially, is going to be rural because you go to the garage down the road. Other expenditure will be split between urban and rural, but by the time you have taken account of those, the amount that you are splitting arbitrarily is really quite small. A word too about leakages. There is quite a lot of, the figures would be quite a bit higher if you included non-UK employment in here, because for example 56 per cent of the clothing consumed in the UK is imported and 57 per cent of the leather or some figure of that order of magnitude and while these figures might be a little bit lower for hunting, inspection suggests that they are not enormously low. Clothes tend to be imported, hunting clothes tend to be imported just as much the clothes that we wear in our day-to-day lives. That was it. The fourth point was: is 115 a big enough sample of followers? Well, the interesting thing there is the 100 odd -- it seems to be a big enough sample of horses, because when we broke down the sample by the number of horses owned in the household there was really remarkably even results; variation between households once that was taken account of was really quite small, and so therefore, I think we would say that as far as the followers is concerned, the standard errors are reasonably within control. The fact -- there was a point about bias, well, that clearly does have to be acknowledged. The fact is that the very devout followers with lots of horses actually spend a little bit less per horse and we get economies of scale in their stabling and they tend to have their own transport facilities rather than having to go and hire a horse box. So some of the bias tends to diminish, and it is of course true that when you are looking at the figure from an expenditure point of view, as we are, rather from a number of people point of view then the bias is automatically less.
MR CORBETT: Can I ask Lord Burns on that particular point, was this 115 sample of actual followers representative of all 302 hunts?
MR COX: Some hunts were not able or not willing in the time available to supply us with contact names of their subscribers and supporters, so we were not able to cover all hunts.
MR CORBETT: Why I ask this is, of the 302 packs, only 69 per cent of them would actually be mounted packs, so our -- if it was proportional, our 115 people would come down to 79 people. We know from earlier data that actually, of people who hunt mounted, only 81 per cent have horses at home, so logically we would be down to 64 people who actually had horses at home. If you have a pure sample only 46 per cent of people who have horses at home employ labour, so we would be down to 29 people actually employing labour, and only 22 per cent of those actually employ full-time labour, which is six and a half people.
THE CHAIRMAN: Again, there will be an opportunity to go into each of these in more detail as we go through them in order. But thank you for registering the point. What I do not think you dealt with was the question about the BETA horse survey and whether there is consistency or inconsistency with that.
MR COX: I cannot answer that question immediately. I would have to check exactly what was written and I am not sure I fully understand the point that was made. Could we return to that?
THE CHAIRMAN: I am more than happy to look at that later. Is your impression, Mr Wakeham, that there is a significant difference between the numbers coming out of this and the numbers that came out of your survey?
MR WAKEHAM: I think there is my Lord. I think the point I wanted to make was that the second survey included questions about hunting, specifically in the context of the use of horses.
THE CHAIRMAN: And do you have anything to say at this stage about the comment from Ralph Cobham, and the criticisms you made of their work?
MR COX: Again, I would have to refer that.
MR ANDREWES: Lord Burns, could I say I am obviously trying to look at this issue in general. It is very interesting to note that where there is clearly a very good sample which there is in the actual employment by hunts, the figures that have been produced previously, and these figures are really not hugely different within the sort of general context. When we come to the area where the sampling inevitably was much weaker, which is the employment by followers, there is a huge difference. I tried to see what might have caused some of these differences and I hope this is not too detailed, but I do think, in particular, that the question of multiple hunt participation, which has an enormous impact on the numbers needs to be reconsidered. It was taken, very properly, from the survey that was done in west Somerset, which is where I think the 1.5 number comes from. However, one should recognise it is the only part of Britain where there are two forms of horse hunting going on together; that is to say you have got both stag hunting and fox hunting going on in the same area. I have no statistical basis, unfortunately, for saying what multiple hunt participation is, but I believe, across the country as a whole, it would be very small. A lot of people will hunt with other hunts, but they will tend to do it by the day by paying a daily cap, and they would not be regarded as members of that hunt. So there is a good statistic that people hunt with, I think, 2.26 hunts per season. I do not have any problem with that, but I suspect that it comes from people doing so by the day and that gives quite a major difference. I am not criticising the methodology at all, but it does have quite a big impact on the way the numbers come out. The second point is this question of multiple horse use which, again, is a question of principle; it has a big impact on the numbers as this was taken at 51 per cent. Again, this inevitably is somewhat subjective; but the nature of the way people keep horses is that if they have them for something like hunting, they will use them for lots of other things as well. It is very difficult, I believe, to determine what is the proper proportion of that expenditure to be ascribed to hunting. The key thing is what would they do if there was no hunting; would they keep the horses at all or would they go? I accept that this is speculative, but I think that if the main purpose of the horse is for hunting, then really all of its expenditure should properly be attributed to that particular activity, because it is its first activity. This is given some weight by the figures in the BETA survey which was done by the Trade Association, because that actually did look at the total number of horses and the numbers that were kept primarily for hunting. There we do see much higher numbers, and if you walk these numbers through then it also begins to resolve this issue of one groom looking after 17 horses, which seems reasonable. I accept entirely where the number has come from. I am not trying to attack, as it were, the integrity of the matter, but I just think that with those assumptions we do end up in a rather odd position.
MR COBHAM: Lord Chairman, I should like to raise a point of principle as somebody who, I will not say pioneered, but was early in the field in estimating full-time equivalents. I have consistently and been delighted that others have followed that methodology, albeit that there is some doubt about what constitutes a full-time employee or equivalent. I would urge that we do not lose sight of the fact that we are actually talking about human beings within full-time equivalents, and that actually there are a total number of jobs made up of full-time, part-time and casual workers which need to be investigated and considered. My observations and experience in the rural economy is that, certainly over the time period where we have been researching countryside sports in a generic sense, there has been a move from full-time employment to part-time and casual employment in the hunting sector. We have, what might be termed, a pluralistic rural labour market, where a significant number of people have more than one, more than two and in some cases more than three jobs. The loss of a part-time job or a casual job can, to that person, be just as important as the loss of a full-time job. I have brought estimates with me to try to amplify this whole direct employment issue later in the day, if I may please, these estimates are based on some ongoing primary research work in Scotland, undertaken on behalf of BFRS. I should like to draw attention to jobs as well as full-time equivalents, and would ask the Committee, please, if they would in their deliberations do likewise.
THE CHAIRMAN: Thank you very much. I think we have already reached that conclusion. But thank you very much for making the point and we will come back to it later in the day. At the moment we are collecting up points. This is very useful to highlight the ones which we would wish to spend more time on. Are we finished with that part of the process?
DR CRABTREE: My Lord, perhaps I can make a few general points. I might introduce myself as an independent, although I am sitting with the ally here. I am undertaking --
THE CHAIRMAN: You are sitting between them!
DR CRABTREE: I am undertaking a study for the Scottish Executive, a somewhat parallel study of the economic impact of the Scottish bill in Scotland which impacts on more than fox hunting, but part of the study is on fox hunting; but a few general points. First, I sympathise with the consultants over a lot of the difficulties, which in some cases seem to me somewhat intractable. But one of the fundamental problems which the gentleman on my right raised was the allocation of expenditure problem. If you go to the followers and say: tell us about your expenditure associated with hunting, you have some arbitrary allocation problem which is very difficult to do in any exact sense. It seems to me that the better way to do it is to have a policy on/off questionnaire, where you actually ask about current expenditures, and then say: how would these change with the bill introduced? That is the policy on, as it were, with policy off currently, which is the point raised on my right here. It seems to me that gives more secure results but not relevant to the present study because, I guess, it is much too late to contemplate that sort of approach.
PROFESSOR HERVEY GIBSON: There is a quick answer on that. We effectively asked that question and the answer that we received from the hunts was that 90 per cent would disappear, and from the followers was 70 something.
MR COX: 90 per cent of horses would disappear if there was a ban.
DR CRABTREE: But this is 90 per cent of the horses they have allocated to hunting?
THE CHAIRMAN: Those are the horses presently owned by the hunt.
MR COX: No, by the followers.
THE CHAIRMAN: I thought you said the lower figure.
DR CRABTREE: Anyway, a point on interpretation which picks up some other points. I think it would be very helpful to the reader, ultimately, for some of the figures in your matrix to be explained quite fully, particularly the ones that link to the rest of the economy, what do the numbers mean, what is the rest of the economy; all that, which is not at all transparent at present. Another point about FTEs and jobs, which seems to me quite crucial in this study, the way the conversion is made and the way the results are presented. At present, in some of the paragraphs you talk about jobs, and it is not clear whether actual jobs or FTEs, and I think that is rather important to be absolutely precise on that. But the conversion of part-time jobs to FTEs seems to me quite critical, because we are in a sector where a large number of employees are paid at very low wage rates. They work long hours; low wage rates. If you converted on a per hour work basis to a full-time basis, you end up with full-time jobs where a lot of individuals are being paid not a living wage, well below the minimum wage. So there is something that seems inappropriate about that, if that is the method. One has to think of alternative methods that give results that are more coherent, in some sense. We have done it by using the minimum wage, actually, as a way of converting between the two, which we preferred. One final point is a point about re-injection, which seems to be omitted from the study. That is -- I may be wrong there -- that is expenditure that particularly relates to the followers who are the source of final demand for all this activity, the expenditure that they do not make after a ban, what happens to that expenditure? Some of that is going to be re-injected into the economy and the rural economy. It is very important to determine what percentage that is. The alternatives are saving, which of course might mean later re-injection, or expenditure outside the economy you are interested in. But clearly the re-injection has direct, indirect and induced impacts which may be small, I do not know, but should be included in the study.
MR ANDREWES: Could I make one other point about collection of data from followers, which is the slight problem we have been struggling with for years. I think I am right in saying the followers were interviewed on the telephone?
MR COX: Yes.
MR ANDREWES: Did you get a chance to then go back to part of that sample and give them the chance to really work out what they spend, because our experience has been if you ask people on the telephone what they spend on their horses, you get an enormous underestimate. I have had to do this in various studies, not particularly concerned with this at all. People just do not know what they spend on their hobby and indeed they very often choose to not be entirely honest with themselves. If you then go back to them a week later and say: "Now come on, I really want to go through these numbers with you -- we have done this with one or two people -- we have come across remarkable differences". I do not know whether anybody else's experience has been similar, but I think it might just be worth raising.
THE CHAIRMAN: I can vouch that if you asked me the same question about golf expenditure I would do the same, particularly if my children are listening.
MR ANDREWES: In horses it's one's wife.
MR COX: Could I reply to that point? We did in fact find that a fair proportion of the followers, when we asked them to break down their total stated expenditure into categories, actually said: "well it is not £5,000 is it? It is actually £8,000" and they expressed surprise and alarm that it was that much. So we did actually arrive at a total expenditure figure in two ways, first of all asking; "how much in total do you spend?" Then: "how much do you spend on the subcategories?"
MR MOORE: May I make two small points: one is that the figure of expenditure per horse that we have obtained does seem to square quite well with other estimates -- the figure of about 2,600, and I think that does square quite well. I think the other important point to mention, bearing mind the problems with followers, and that is that we decided that the best way to use the expenditure figures was to gross up the figures on the basis of expenditure per horse, rather than expenditure per follower. Given that the expenditure per horse seems to be in the right ballpark, and given that we grossed up on the basis of the number of horses estimated to be involved in hunting, making due allowance for the time spent hunting, which I admit is difficult to estimate, I do not think we should perhaps put quite as much emphasis on the followers expenditure as we are putting at the moment.
MR ANDREWES: I agree the overall expenditure per horse does look remarkably sensible and particularly compared with other studies. I think, though, it included what the family was spending on the hunt; that is to say their subscriptions were included in the expenditure per horse, whereas I think when you compare these numbers with the horse economy as a whole, of course that expenditure would not be included, because they would not have to incur that expenditure, that is to say it would only include money spent on actually looking after the horse; food, shoeing, vet, saddlery etc. Whereas I think your equivalent number per horse, which I thought was a good number, included some extraneous expenditure which would have caused it to be boosted on average, that is the expenditure on subscriptions to the hunt and that sort of thing, because you include all of that expenditure.
MR MOORE: The implications of that would be that we overestimated rather than underestimated.
MR ANDREWES: No, because if the other point is right that people do underestimate their expenditure, your figure comes back to what did look like, overall, a sensible figure but only by adding that extraneous expenditure which would not apply to people keeping horses if they were being kept for point-to-pointing, polo or hunter trials etc.
MR MOORE: I am happy to show the figures.
THE CHAIRMAN: We will come back to that.
MR MOORE: Lord Burns, one point that I did want to raise was the question of capital expenditure which was apparently omitted from the figures, for reasons which we understand, but I think that we are able to show from our work that there is a way of calculating the prime use of a horse, the main purpose for which the horse is kept. I think that number was omitted because they felt that that was not possible.
THE CHAIRMAN: Any comment at this stage?
PROFESSOR HERVEY GIBSON: Well, yes. I am actually not speaking on behalf of the team, but I have discussed this aspect with the team, but I think, from my reading of what I have seen, there is a difference between the prime and the proportional use. It is possible to have a horse that is primarily kept for hunting, but actually only used for hunting 70 per cent per cent of its time, and certainly possible to have one that is primarily kept for hunting and only used 60 per cent of its time for hunting. I think that would be a difference in the two horse population estimates, because effectively we have said what proportion of the time is used for hunting.
MR COBHAM: Can we receive further clarification on that please: when is a hunter not a hunter, and when is it a hunter? Is hacking allied to hunting? Sometimes yes, sometimes no. How did you deal with that point? How are events, point-to-points and hunter trials, and all of the activities associated with training, getting and keeping a hunter fit viewed in terms of your definition of what is or is not a full-time hunting equivalent horse? It does seem very important that that is clarified and that there is agreement, I would suggest, with the hunting fraternity; that the definition you take is a fair and correct one, reflecting what happens with the horse on the ground.
THE CHAIRMAN: Could I suggest that we move on in terms of my notional agenda and look at the issues in the order in which they appear in the report. I think we are now getting into that territory. It probably makes more sense if we take them in order. Is everyone happy with that? Could we begin with the question of, what we might describe as the hunt economy, which is the income and expenditure of the hunts themselves, and see if there are any issues which arise from that. I am looking from page 20 on in the report. This includes the whole question of the income and expenditure, the issues of cleaning of the data, grossing up for the missing hunts, and the question of full-time equivalents. I suspect there are not a lot of issues here. I think most of the comments we have had imply that there is fairly widespread agreement about this, on pages 24, 25 and 26. Could we take the whole section and see if there are any points that people wish to make?
MR CORBETT: Could I raise one point or two points on this, Lord Burns? First of all, I think a very important issue, of whether the hunt fundraising activities are being treated gross or net. Now this will make a profound difference to the model. I understand within the report that it is being suggested that, I think, some 80 per cent are actually being treated as gross. I have to say I find this extremely surprising, and I just wonder whether in the answering of the questions the hunts actually realised the significance of what was being asked, because it is quite intriguing that in the questionnaire the question about whether it was gross or net actually came after the question about the numbers. I just slightly wondered, having got all the numbers, what did you then do when you found whether it was gross or net? We are probably talking about some 40 million difference between the two. Now there are two reasons why hunts treat their fundraising activities as net. First, because it gives the fundraising committee a freedom of their own, so the point-to-point committee, the hunt ball committee, they will all run this little thing themselves and they will then give a contribution to the hunt. Categorically this is typically what happens. The second reason is that it has been accepted practice and, indeed, it was by recommendation many, many years ago, that this is how hunts should run. So I would ask this question: are you absolutely sure that these were actually gross figures, not net?
THE CHAIRMAN: On a point of clarification for me. Are you referring to an issue that actually comes up later in the report; that is trying to reconcile the figures that are coming from the hunt followers and the figures that are coming from the hunt accounts themselves. The hunt accounts themselves balance, roughly speaking, although there is a bit of a shortfall which seems to be being made up by some invisible sources. Are you suggesting that the figures entered here for the actual hunts themselves, in terms of net receipts from these activities, are significantly wrong?
MR CORBETT: Typically, I think the hunt will show there is a 500 pound contribution to the point-to-point. In actual fact the point-to-point probably had £10,000 sales and expenses 9 and a half. This is what I am saying, gross or net. You are absolutely right, my Lord, that later on, yes, there is this question raised, because hunt followers maintain that they actually spend a great deal more on fundraising than hunts actually receive, which would seem to me to support the fact that actually the figures that you are getting from the hunt counts are net.
THE CHAIRMAN: I had assumed that they were net in this part of the study. I had assumed that that was the way that people were answering the questions because they do not have a lot of other costs which have been identified, for running the social activities?
MR CORBETT: Actually, there are very substantial costs.
THE CHAIRMAN: But this comes from the way Produce Studies collected the data.
MR CORBETT: They were net. We underestimated, Produce Studies underestimated, the total expenditure, absolutely, and the total income. In our view what we were collecting was the net contribution, which is how the accounts were kept.
PROFESSOR HERVEY GIBSON: I do not think there is any disagreement here, Lord Burns. I think what is reported here is what the hunt said and later on we said, well indeed, what they considered -- and they used the words gross -- that later on we say we think they really meant net. None of the hunts confessed to employing orchestras and it is hard to have a hunt ball without an orchestra, some form of music.
MR CORBETT: This actually omits a significant flow of expenditure into your model, if that is the case.
PROFESSOR HERVEY GIBSON: If that had been omitted from the model, that would be the case, but we do not think that has been omitted from the model, although we are open to advice as to the allowance we made for it in the modelling part, which comes later in the report, as you said.
THE CHAIRMAN: Could we take it later? I can see the point you are making. What you are saying is that these accounts could well have been put together on a gross basis, in which case both the revenues and the expenditures would have looked quite a lot higher. A lot of the expenditures were washed out.
MR CORBETT: Three small points. In calculation of membership and employment, first of all, have full-time Masters been brought into this, because I do not think they would normally appear in hunt accounts under salaries; they would appear under Masters' guarantees. There are an unknown proportion of hunts that employ full-time Masters, and probably in the order of about 70 or more. Also, are farmers included? This is a nightmare in hunts because, very often, farmers, mostly farmers, hunt for nothing, or almost always hunt for nothing, and sometimes appear in members' lists; very often do not. Finally, is this assumption of two part-timers equalling one full-timer, is this a valid assumption? I do not know.
PROFESSOR GEORGE PETERS: On expenditures, Lord Burns, we perhaps ought to clear up some details. I have been looking at Table 3.3 which is in the main report, which has the grossed up and adjusted estimates of employment, which is said to be the preferred estimate, for the hunts, for example, you have an income of £14.6 million. (that is the social and accounting matrix) But then on revenue/operating expenditure, expenditure by hunts there is £15.8 million, whereas it appears to be £12.7 million in the matrix. This is an example of the lack of explanation, which I think Dr Crabtree was mentioning. I think you would find the same sort of thing for follower's expenditure as well. It does not seem to square easily with the number that is in the summary matrix. In fact, at one point you mention employees and an £8,000 wage, and if you multiply both together you do not get £70.6 million; you get something like £100 million. There is an explanation somewhere, but it is not entirely obvious to me. So I think all the numbers that appear in the report need to be rather firmly tied into the way they appear there, because, ultimately, the way they appear in the matrix affects the final result that you are generating.
THE CHAIRMAN: Well, there are a number of points there about the economy of the hunts themselves. I think the main one, is whether or not the figures are underestimated because they have missed out a lot of expenditure on social activities which has been netted out for these purposes. This covers the issue of the farmers who do not pay, and the question of reconciling some of the numbers as they appear in this table with the numbers that appear in the social matrix.
MR COX: On the first point, we first asked the hunts what proportion of their income they derived from all of the associated activities, and we specifically asked them not whether they included that turnover gross or net, but whether all the income and expenditure was included in the hunt account; so we asked it in a simpler way which we hoped would not be confused. It is quite possible that there was confusion there, but having asked the question in the simplest way possible, we then, to a large extent, have to believe what we are told. On the question of paid Masters, we asked how many people they employed, i.e. paid a wage to, so if they paid a wage to a Master, they would have been included as an employee.
MR CORBETT: I think that may be right, but I do not think they would see it like that. There is a great pride in being a Master and you do not get paid a wage. I sympathise with your problem, but these things do make a difference.
DR CRABTREE: Referring to table 3.3, can I flag up two points which come out of it, but are not directly part of the table, but they might be relevant in later discussion. One is the question of fallen stock; if the hunts stop doing this after a ban, what happens? And if knackers take over, there is some employment generation potentially there, so there is a net effect, not a gross effect. Similarly with the foxes, I know hunts are incredibly inefficient on a cost basis in catching foxes but farmers, presumably, either have to use other methods in the future or potentially lose out. There may be quite small economic effects there, but maybe one should at least cast one's eye over them.
MR COBHAM: I had a question earlier in connection with income. Could you clarify please, does that 14.6 million include the Master's guarantee as such, because that is normally a standard method by which the difference between operating expenditure and income is covered. You would not expect, in reality -- these hunts to be in "queer street", i.e. they are not generally in debt to the banks. So hence my question.
THE CHAIRMAN: I think that is mentioned in the report.
MR COX: It is dealt with expressly in the report. We say on page 23, for example, that it is evident that hunts collectively incur a loss, and it was explained to us, when we spoke to a number of the Masters and treasurers, that the losses are often covered by the Master out of his pocket or from some other supporter, but also from accumulated bank balances. We were looking for recorded flows of expenditure that we could examine, and clearly within the hunting economy there are an awful lot of unrecorded flows of one kind or another.
THE CHAIRMAN: I think there is a question here about the non-market economy which figures in this, in terms of its impact upon the rural economy, in a general sense. But obviously it is quite difficult to capture within this framework. I think we are well aware of this. Are there any other points on this first section about the direct effects on the hunts?
MR OLIVER-BELLASIS: Lord Burns, could I just make one point in relation to Dr Crabtree's point about fallen stock. My experience is that if hunts were not taking fallen stock, currently there are very, very few knackers left and, therefore, there would be a question mark as to how fallen stock would be dealt with. Secondly, whether that would be an on farm solution or an off farm solution. There are some quite serious environmental difficulties currently if it were to be an on farm solution. There would be a cost for that if it was a question of the replacement of the incinerator that the hunt currently uses for that product which is not consumed by the hounds, as to whether those incinerators would, firstly, move and, secondly, would get planning consent were they to move.
THE CHAIRMAN: Do we have any other points on this section of the report? As someone said, this is the area where the data is probably at its best and therefore it has been necessary to make fewer assumptions, at this stage than it has elsewhere. In that case, let us move on to the next chapter. First of all this gets us into the question of the number of followers. There is a point that was mentioned earlier, how to deal with this whole question of people saying that they attend more than one hunt. There is the issue about mounted followers who are non-members, et cetera. This takes us to the question of the number of followers there are of both types. I think the point was mentioned earlier that this is quite a difficult area. People will say they have attended other hunts, where in fact they have just been casual attendees, rather than actually having been members. I think the suggestion was made that, therefore, the number of members and supporters has been understated by this method. I think that was the implication.
MR CORBETT: I think this is right and, indeed, has been admitted, that the question was not actually asked as to whether people belonged to more than one hunt. It was asked as to whether they had attended another hunt; an awful lot of people do visit other hunts, that is known, and particularly supporters. So I think we are also in a situation where we cannot produce any contrary evidence to say that people categorically only belong to one hunt, but actually belonging to a hunt is quite expensive; I cannot see that people would, in most circumstances, actually choose to belong to more than one.
MR COBHAM: In terms of the earlier research that we did, primary research back in 1981-82, with a large sample, sample of both hunts mounted followers including subscribers, we actually identified that multiple following with hunts was of the order of 12 per cent. That was an actual estimate that we derived from questionnaire responses.
MR CORBETT: That would not necessarily be membership, would it?
MR COBHAM: No, that was actual followers.
MR ANDREWES: The idea of 10 per cent dual membership, from a commonsense point of view, sounds to me sensible I would not reject that from our general experience. I do not have any statistical evidence to back it up, but it does not sound unreasonable.
THE CHAIRMAN: Do you have any comments on this? What impact would this have? The suggestion is being made that you have discounted the figures that have been given by the hunts for the number of mounted and unmounted followers, but you have discounted them too far by taking the numbers of the people going to multiple hunts too literally. Indeed, I made earlier the point if I was applying this to golf. If I was asked how many golf clubs I visit in a year, it would be a good deal larger than the number of golf clubs that would have me down in their books, even though that is actually too high a figure. But that is another problem.
MR COX: In terms of the number of followers, we acknowledge in the report, and we acknowledge now, that neither the estimate produced from grossing up the Countryside Alliance data, nor the estimate that is produced when you adjust that estimate for what the followers surveyed said about the number of different hunts they had followed, is satisfactory. We suggest a compromise estimate, which we were able in some way to validate, by then estimating, on the basis of that population estimate, the total amount of payments by followers to hunts. We concluded that the compromise estimate that we had reached was not wildly wrong, because the figure you get when you gross up what the followers say about how much they paid to hunts and compare it with what the hunts say they got from the followers, they are not too very different from each other, bearing in mind that the two figures are not defining quite the same thing.
THE CHAIRMAN: Does it follow that if you had taken a higher figure for subscribers, members and other supporters, that you would then have had a bigger gap to explain between what the hunt said they were being paid by their members and what the members themselves said that they were paying to hunts. Would there have to be some form of reconciliation between those?
PROFESSOR HERVEY GIBSON: I think we also would have been at the high end of the horse population estimates as well. I think we probably are quite still near the high end of the hunting horse population estimates, once you have taken care of these definition issues. So, both on the payments to hunts and on the number of horses --
THE CHAIRMAN: Involved in hunting?
PROFESSOR HERVEY GIBSON: -- involved in hunting, we would have been higher. I think I would also say that on statistical grounds, taking an arithmetic mean of this kind of distribution also would tend to exaggerate the figure, and one would quite often take a geometric mean for these things, which would put us down at somewhere like 35,000 instead of 40,000.
MR ANDREWES: I think if we go back to this question of the sums adding up, we need to understand how the accounts work. Usually within subscriptions there are two elements; there are subscriptions that people pay annually, and maybe a part-time subscription or a full-time subscription, and then there is the field money which people pay when they come to visit. Now I think the reason that the numbers add up financially is because within subscriptions you would get both of those elements, but the people who pay field money would not be listed in the list of subscribers and followers as individuals. So I take the point entirely that the money adds up, but I think it is still grossly underestimating the numbers of people who come hunting regularly and who have horses, and it still does not invalidate the financial check; I think that is still right. I would ask that before the final report is published you do get a chance to have a really good look at the work done by BETA, because coming at it from a completely different point of view, if you do take the figure of something like a 10 per cent overlap as opposed to a figure -- I think you have taken a mean of 2.88 and 1, which is 1.7 or something. I think if you were to scale that back to 1.1 you would find that your numbers tie up extraordinarily closely with the work done independently by BETA and their horse population numbers. You have got a remarkably good fit, and I do feel that the subscriber numbers are just very much too low.
THE CHAIRMAN: There would then be a problem of reconciling the figures that the hunts say that they have received, in terms of subscriptions in their accounts, and the figures that the followers themselves say that they are paying to hunts. If you had a lot more people, by taking your figure for the total, then that would generate for you a series of payments to hunts that was a good deal higher than the figures that the hunts say that they have received in terms of receipts. So it would exaggerate that problem of reconciliation and I think you need an answer to that.
MR COX: Also, if you take the higher estimate of the number of followers, we then get a population of hunting horses that is very much bigger than other estimates that have been produced.
THE CHAIRMAN: It is being suggested that you would get an estimate for hunting horses that is the same as the figures that BETA have put forward. Could you reconcile these two positions?
MR WAKEHAM: My Lord, we came up with a figure based on the 1998-99 survey, which showed that 7 per cent of horses were used primarily for hunting.
THE CHAIRMAN: What would that mean in total?
MR WAKEHAM: That comes up to 56,000 if you accept the 800,000 total, which was the number we based all our work on. That was the primary use. We then also asked about secondary and third use, which brought the figure up to 14 per cent, so we are only using the primary use number to reach that 56,000 figure.
THE CHAIRMAN: How many horses do you have?
MR COX: 43,000.
THE CHAIRMAN: Why do you say that is at the top end of the range?
MR COX: I think I meant that it was broadly in line with the figures.
PROFESSOR HERVEY GIBSON: I would say it is quite near the top of the range if you make this distinction between primary and full-time equivalents that we were discussing earlier. If you take the horse as 51 per cent or something hunting, which I think is the figure we had from the survey, then your figures, I believe, would come down closer to 40,000.
MR WAKEHAM: I do not accept that.
PROFESSOR HERVEY GIBSON: I thought you said 70 per cent primary?
MR WAKEHAM: I said 7 per cent primary, then 4 per cent secondary, and 3 per cent tertiary. So we are looking at 14 per cent in total, but we only use the 7 per cent number, which is the number that people said they used their horse for as their main use. Now we have to accept obviously --
THE CHAIRMAN: Could you turn those into numbers, rather than percentages?
MR WAKEHAM: 56,000.
THE CHAIRMAN: How many primary, how many Secondary would there by?
MR WAKEHAM: There would be 32,000 secondary and 24,000 tertiary making 56,000 in total. Another 56,000 that are used for other things, but not primarily for hunting. The point that we do need to bear in mind, of course, is that all hunting horses are used for other things anyway, because they go exercising. The numbers do not take that into account.
PROFESSOR SIR JOHN MARSH: Are there some people who follow, but do not pay subscriptions, farmers particularly, and where do they figure?
MR CORBETT: And a number of people who just attend hunts on a cap basis, not necessarily full members of any particular hunt.
THE CHAIRMAN: But the cap should be in these figures for monies received from people?
MR CORBETT: Yes, but they would not actually account in the calculation of members.
LORD SOULSBY: Just a point of clarification. In some areas, it would seem to me, that there are the subscribers to the hunt, the supporters, which clearly you have got, but in the fell packs, for example, in the north of England, there appeared to be a substantial number of people that were neither, that came into the area as tourists, merely to occasionally watch a hunt, but expended an enormous amount of money, it seemed to me at least, on local industries, shops and bed and breakfast and things like that. Did you capture that population in your figures?
MR COX: Only in as far as the names of such people were supplied to us by Masters of hunt.
MR CORBETT: My Lord, exactly this point was borne out in the survey of hunts which the Alliance did, that amongst supporters, I think, I cannot remember the exact figure, something like 40 per cent at any given hunt were casual visitors. So, yes, all over the country there are a great number of people that follow hunts who do not actually belong to anything particularly.
THE CHAIRMAN: Right, so the figures that they have paid to the hunt are included in this matrix. But that particular type of person would not have found their way into this calculation. Basically the type of people who have been included here are people who are local visitors, to the extent that they are included in the figures. DR RICKARD: Thank you my Lord. I will perhaps come back to one or two of these points. I feel we ought to remind ourselves that we can argue about the number of horses and there will be different figures. What really matters is the amount of expenditure that is spent. We are not going to argue about proportions; nobody has any firm figures. We do seem to have some, perhaps, slightly better figures where the hunt is concerned on the expenditure, and it strikes me that is what is important here.
THE CHAIRMAN: That is one of the things that is important. I think what we need to do is to go through and test the various assumptions that have been made in this whole matrix. I do not think we would be doing our job today if we did not do this.
DR RICKARD: If I might come back, my Lord. Unless I am completely misunderstanding what is going on here, we were just moving on from the direct expenditure to the indirect, and I have quite a lot of points to make on that later on. I was just trying to get over the first two or three paragraphs of the opinion which is in danger of trying to work out how many horses would dance on a pinhead. Turning to the far more fundamental point, it strikes me, that this is not in any way a statistically reliable sample. If I go to a group of people and ask them for the names of my sample, I have not got an unbiased sample. This is fundamental.
THE CHAIRMAN: I think that is a point that obviously does occur in this whole chapter. Indeed, I would have expected you to have raised that just slightly further on. At the moment we are dealing with the numbers of followers, which is the section 4.2. This leads to section 4.3 where we get the breakdown of the expenditure of the hunt followers. Where we had got to was that we were trying to test the assumption, in terms of the numbers of subscribers, members and other supporters. We were trying to test if that assumption should be changed and what it would mean, in terms of the number of horses, and whether that then seemed to be consistent with other estimates of the number of horses. We have also tried to test how we would reconcile the fact that that would then produce figures for payments to hunts that were larger than the payments that the hunts seem to have received. We cannot solve this today. I think all we can do is expose these issues today. As has been pointed out by people making the presentation, this is an exercise which one hopes is going to balance, in terms of rows and columns. At the end of the day reconciliations have to be made. I think it is our job to try and see to what extent alternative assumptions could be used at different stages. Then we will have to consider that as a whole afterwards. That is how I see this discussion proceeding.
MR CORBETT: My Lord, if I may just make one final point on horses, really establishing agreement on this; that the Produce Studies primary data on this produced 36,000 horses owned by hunt members were used solely, or primarily, for hunting. If you adjust those used by non-hunt members, this would be remarkably close to what Anthony Wakeham is talking about.
THE CHAIRMAN: Well it sounds to me to be lower; his figure was 50,000 for those used primarily and this is 35,000 for those used primarily.
MR CORBETT: This is just hunt members; fully paid up. Then on top of that you have got hire horses; this would actually include any horse they owned.
MR ANDREWES: I think, Lord Burns, that that is the key Point. As well as horses owned by members, there are an awful lot of people do rely on horses from livery stables, as you will have seen, and that would account for the 20,000 difference between the numbers
PROFESSOR SIR JOHN MARSH: It really is quite aside from this; clearly the main expenditures relate to horses, but a substantial number of people follow who are not mounted. Some of the funding activities, of course, are not horse related. I was just wondering where they fit into the story here?
MR CORBETT: Well, in fact 31 per cent of the hunts are unmounted hunts.
THE CHAIRMAN: Unless you have an answer quickly, I suggest that we break for lunch. I have been reminded that I have already overrun by five minutes and we have tried to keep these sessions running to time. Maybe we will begin this afternoon with your answers to the outstanding questions? Could we be back, please, at 1:30, to begin the next part of this discussion. Thank you.
(Adjourned for lunch).
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