The Economic Effects of Hunting with Dogs

A report prepared by
Public and Corporate Economic Consultants (PACEC)
for The Committee of Inquiry into Hunting with Dogs

Public and Corporate Economic Consultants (PACEC)
49-53 Regent Street
Cambridge
CB2 1AB
Web: http://www.pacec.co.uk

June 2000

(NB footnotes are marked [1] and are to be found at the end of their section. i.e.a footnote in section 2.3 will be found at the end of section 2.3)

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Contents

1. Introduction 1

2. Review of earlier studies 8

3. Direct Effects - Income, Expenditure and Employment of the Hunts 20

4. Direct Effects - Expenditure and Employment of Hunt Followers 28

5. Indirect and Induced Effects 35

6. The Possible Effects of a Ban on Hunting with Dogs 46

Bibliography 58

Appendix A: Building and Using the Input-Output Model 60

Appendix B: PACEC Survey Questionnaires 65

List of Tables

Table 1.1 Social accounting matrix for the Hunting Economy - Summary Transactions Table          3

List of Figures

1. Introduction

1.1 Background

1.1.1. This report presents the results of the economic research commissioned by the Committee of Inquiry into Hunting with Dogs, undertaken during March and April 2000 by Public and Corporate Economic Consultants (PACEC) Ltd.

1.1.2. PACEC is an independent company, specialising in strategy development, economic impact assessment, policy evaluation and other research-based consultancy. The company is not allied, in any way, to any pro- or anti-hunting group. Nor has the company undertaken any work in the past for any country sports or animal welfare organisations. The company was, therefore, able to approach its work for the Inquiry from an entirely disinterested standpoint.

• 1.1.3. There were originally two separate economic research contracts open to tender; one dealing mainly with the direct economic effects of hunting, and another dealing mainly with the indirect and induced economic effects. However, PACEC successfully bid for both contracts as one; and the unified terms of reference became as follows:

• to undertake a critical review of the existing literature relating to the economic effects in rural areas of hunting with dogs, and to the possible longer term effects of a ban
  
  
• to provide independent verification of the quality and accuracy of the survey data on the direct economic effects of hunting, collected early in 2000 by the Countryside Alliance
  
  
• to estimate the direct expenditure by hunts and their supporters on hunting and hunting related matters, broken down by the main categories
  
  
• to estimate the number of people employed directly by the hunts and their supporters, showing what proportion of their time is directly related to hunting activities, whether there are seasonal variations, and in what capacities they are employed
  
  
• to estimate the income of hunts, broken down by main categories
  
  
• to estimate, or to suggest in the light of existing evidence and any further information which can readily be obtained, the indirect and induced (multiplier) effects of hunting
  
  
• to describe and categorise the indirect and induced (multiplier) effects, broken down by type and region
  
  
• to assess the possible longer term economic effects of a ban
  
  
• to consider the extent to which, and over what timescale, any negative effects of a ban on hunting would be counteracted by other changes which are occurring, or are likely to occur, in the rural economy (for example, in patterns of employment)
  
  
• to indicate the extent to which any changes would be likely to vary according to sector and locality
  
  
• to draw attention to any marked variations in the findings with respect to different types of hunting / coursing and different locations within England and Wales.
• 1.1.4. Throughout this report the following terms and definitions are used:

• Hunts are the organisations (i.e. clubs, associations and societies) which promote hunt meetings. Many, but not all, of them employ staff (e.g. huntsmen, kennelmen, grooms), own packs of dogs and horses, collect fallen stock, and use an incinerator to dispose of animal wastes. They are generally governed by committees of members and subscribers, and they have annual financial accounts.
  
  
• Followers are individuals and households who are members of hunts, subscribe to hunts, or support hunts in other ways. Many attend hunt meetings and follow the hunt on horseback, but many follow the hunt on foot or by other means (e.g. by car or using quad bikes). They make payments to hunts in the form of membership fees, subscriptions, caps and other donations. Followers also organise many sporting and social activities (such as point-to-point meetings and balls) which income for the hunts.
  
  
• Suppliers of hunt-related goods and services are businesses which provide hunts and followers with what they need to organise hunt meetings and follow the hunt. They include, for example, animal feed suppliers, vets, farriers, and saddlers.

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1.2. Approach and Methodology

1.2.1. In order to address the objectives set out above, it was decided to build a social accounting matrix, or input-output table, of the 'hunting economy' and its relationship with the rest of the economy. This approach was adopted because it is systematic and consistent, in that it necessitates accounting for all the flows within the 'hunting economy', and between the 'hunting economy' and the rest of the economy, in a way which avoids double counting (a problem which is known to have affected some earlier studies on the economic effects of hunting). Equally importantly in this context, the input-output table can be used to create a model which could be used to calculate multipliers and to evaluate scenarios (i.e. to answer questions of the type: 'what if such-and-such happened?').

1.2.2. The social accounting matrix used, its construction and its application are described in detail in Appendix 1 to this report. However, in brief, the model characterises the 'hunting economy', and its relationship with the rest of the economy, as comprising a set of 'payment by' and 'income to' flows, which can be summed to provide robust income and expenditure accounts, or transformed to provide estimates of employment. The full model distinguishes 35 sectors of the hunting economy, but its basic structure is summarised in the five by five matrix shown in Table 1.1.

1.2.3. Several aspects of the Table require explanation. The first is that there are two payments by sectors to themselves, i.e. by hunts to hunts and by the rest of the economy to the rest of the economy. In the former case this reflects the fact that hunts trade with one another to a limited extent (for example, when one hunt makes a contribution to the wages of an employee it shares with another hunt). In the latter case this reflects business-to-business transactions in the supply chain as the multiplier works itself through (for example, when a vet providing services to a hunt purchases drugs from a pharmaceuticals company, which in turn purchases chemicals and packaging from other firms, which in turn make purchases from other firms further down the supply chain).

1.2.4. The second is the balancing items associated with the rest of the economy and with employees. In the case of employees this represents the difference between gross salaries, including NIC, and net pay plus savings. In the case of the rest of the economy this mainly represents imports.

1.2.5. The third is that social activities are treated as gross in the table, transferring net margins to the hunts. The same activites also, using the accounting convention used, fund almost £1m of the hunts' labour bill in return for services rendered.

1.2.6. A table like Table 1.1 must be consistent, so to construct it PACEC had to reconcile estimates from many different sources, collected in the manner described below. For example Hunt followers’ stated expenditure on subscriptions had to be reconciled with Hunts’ statements of their income from subscriptions. The formal framework also made it possible to bring in relevant information representative of the economy as a whole where direct enquiry failed to draw sufficient response. This is because it was fully consistent with the national input output tables used to draw up the UK national accounts. For example the cost structures of businesses, especially those such as animal feeds not particularly related to hunting, could be estimated from the nearest equivalent in the economy at large (see Chapter 5 for more explanation). It should be noted that throughout the table the wage levels were calculated by dividing the total wage bill by a seperately estimated employment figure. They are not assumptions but results and the fact that the estimates appear reasonable therefore tends to confirm both the expenditure and the employment figures.

1.2.7. The particular version of the social accounting matrix above shows all the flows resulting from expenditure by followers, by hunts, by the UK businesses that these spend their money with, by their suppliers in turn, and the ‘induced’ expenditure when all the employees in the system spend their wages and salaries. The numbers of employees, average salaries and so on are shown very precisely because that is how they must be calculated in the matrix, but there is no claim to be so precise. The purpose of the matrix and the model is consistently to indicate relative orders of magnitude. The strength of the model is that different versions of the table can be produced to explore different scenarios and the consequences of making different assumptions.

1.2.8. The information gathering undertaken as part of the research was driven largely by the need to define the nature and strength of the payment by / income to relationships in the model. Thus, in order to put the approach into effect, and to fully address the research objectives set out in paragraph 1.1.3 above, PACEC designed and undertook a programme of work comprising eight main components:

1.2.9. The review of earlier studies of the economic effects of hunting with dogs and the possible effects of a ban consisted of a standard literature search and critical assessment of what was found. The review of earlier studies is included as Chapter 2 of this report; and the findings on the possible effects are reported and reflected in Chapter 7, which deals with the scenario analysis.

1.2.10. The examination of the quality and accuracy of the Countryside Alliance dataset consisted of a visual check of the copy questionnaires, received from the Alliance via the Inquiry office, to: eliminate non-qualifying responses (i.e. 8 from Scottish hunts) and duplicated responses (i.e. 2 hunts where separate individuals had completed the same questionnaire); identify and correct for completion errors (although few were actually found); and identify inconsistencies within completed questionnaires (e.g. where hunts had shown volunteers as employees, or had specified employment without expenditure on wages and salaries). The data from the questionnaires was also re-inputted to eliminate any data entry errors (although there were few). The findings of this examination are reported in Chapter 3.

1.2.11. Those hunts that had submitted questionnaires with inconsistencies were then re-interviewed by PACEC as part of the follow-up telephone survey of hunt masters / treasurers. One purpose of this survey was enable errors and inconsistencies to be corrected-for, but the survey was also used as the opportunity to collect more detailed information on hunts' employment, income and expenditure. 69 of the 282 hunts originally surveyed by the Countryside Alliance were followed-up in this way. The questionnaire used by PACEC is included, with the questionnaires for the other surveys described below, in Appendix 2. The findings of this survey are also reported in Chapter 3.

1.2.12. In the absence of the opportunity (owing to the short time available) to obtain or construct an independent sampling frame for the survey of hunt followers, PACEC requested contact details of a selection of hunt subscribers / members and other supporters from the hunt masters and treasurers interviewed as part of the follow-up survey described above. 166 followers (including 115 subscribers / members and 51 other supporters) were interviewed by telephone. The main purpose of the survey was to obtain information on the followers' degree of involvement in hunting, horse ownership, pattern and type of horse and hunting expenditure, and their employment of people to care for their horses. The results were used to produce detailed estimates of the expenditure and employment patterns of the population of followers, and these estimates are included in Chapter 4.

1.2.13. The survey of suppliers of hunt-related goods and services involved telephone interviews with a broad cross-section of 156 businesses located in rural areas throughout England and Wales. The types of businesses interviewed were those known from earlier research to supply hunts and hunt followers; and they included feed producers and suppliers, saddle and tack makers and suppliers, farriers, vets, clothing suppliers, manufacturers of horse boxes, horse transporters, and bloodstock agencies. The survey was not intended to be perfectly representative of all supplier businesses, but was designed to obtain sufficient detailed information on suppliers' turnover per employee and purchasing patterns to use, in conjunction with data on hunt's and followers' expenditure, to generate the estimates of the indirect and induced effects of hunting shown in Chapter 5.

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2.1. Introduction

2.1.1. The purpose of this Chapter is to make a critical assessment of earlier research into the direct, indirect and induced effects of hunting with dogs. For each major study it seeks to identify the methodology used, assess its soundness, strengths and weaknesses, and its impartiality. The key results are then itemised and assessed. The studies focused upon are those which undertook at least some original research, rather than those which have consisted mainly of a re-working of existing data. Criticisms of other contributors to the debate on methodology are raised in context.

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2.2. The Studies Examined

2.2.1. The original research examined as part of this assessment comprised the following studies:

Cobham Resource Consultants (1997) Countryside Sports: their economic and conservation significance.

Mackenzie and Associates (1984) Survey of Employment and Participation in Hunting in Great Britain.

Manley W, Hallett J, Nixon J and Baines R (1999) Economic, Social and Environmental Aspects of Hunting with Hounds in West Somerset and Exmoor. Royal Agricultural College

Produce Studies Research (1997) The Economic Contribution of Hunting.

Segal Quince Wicksteed Ltd (1997) Review of the Estimates of the Employment Impact on a Ban on Hunting with Dogs.

Winter, M, Hallett, J, Nixon, J, Watkins, C, Cox, G, Glanfield, P (1993) Economic and Social Aspects of Deer Hunting on Exmoor and the Quantocks. Royal Agricultural College

2.2.2. In addition, after the meeting with the Inquiry, the consultants were able to review:

Produce Studies Research (1998) Employment generated by fox hunting in Britain.

Produce Studies Research (1999) National Equestrian Survey 1999 (for the British Equestrian Trade Association).

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2.3. Overview of the Findings

2.3.1. Research commissioned by the Countryside Alliance has estimated a total hunting employment figure of 23,000 (Cobham (1997)), although more recent work has reduced this to 16,000 full time equivalent (FTE)[1] jobs. Expenditure has been estimated at £170m. These estimates have been questioned, as well as their use in the estimation of the full effects of a proposed ban.

• 2.3.2. The methodologies of original research have also been questioned. There are substantial measurement and data availability problems, which contribute to wide variations in the employment and expenditure estimates produced. However, the principal findings of recent original research have been:

• All recent studies agree that fewer than 1,000 full time equivalent (FTE) jobs are provided directly by the hunts, but estimates range between 340 and 910.
  
  
• Estimates of the most important category, employment of grooms by hunt followers is contentious, and highly vulnerable to estimation methods. Initial Countryside Alliance estimates of 9,000 jobs have been progressively scaled down to 6,000. Others have estimated it at as closer to 3,000 jobs. One other study has put it as low as 375 jobs.
  
  
• Estimates of the indirect effects of hunting expenditure on the rural economy are often built on arbitrary judgements and assumptions, with multipliers values also varying widely.

[1] In employment related research FTEs are often used as a standardised measure of labour input (especially in economies where part-time, seasonal and temporary employment is common) in order to ensure comparability of data from different sources

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2.4. Problems in research

General methodology

2.4.1. Total hunting employment is usually allocated into four main categories: direct employment by the hunts themselves; direct employment by hunt followers (largely to care for their horses); indirect employment by suppliers of goods and services to hunts and hunt followers; and induced (or multiplier) employment (resulting from the spending of direct and indirect employees' wages, and from the purchases from other businesses of the suppliers of hunt-related goods and services).

2.4.2. The quality of employment estimates tends to reflect this categorisation. The most reliable or convincing estimates are for hunt employees, since the number of hunts is known and is sufficiently small to be well covered by survey research. Hunt organisers also know more or less precisely how many people they directly employ, both full and part time. The estimates for followers' employees are generally much less reliable, since the population of hunt followers and hunting horses is not known precisely; and since division of their time between hunt and non-hunt related activities varies greatly and has rarely been examined rigorously. The estimates for both indirect and induced employment are less reliable still, since they have tended not to be based on primary research, but, rather, on 'guestimates' and assumptions.

Measurement problems and data reliability

2.4.3. Full-time equivalent employment can be estimated in two main ways, using different sources, i.e. from employment data, or from expenditure data. Both methods involve specific assumptions, and both are subject to measurement error.

2.4.4. The key difficulties associated with using employment data are as follows:

2.4.5. Using expenditure data employment is usually estimated as a proportion of the annual wage bill of the hunts and followers, plus other related expenditure. This is often associated with the following problems:

2.4.6. The relationship between direct, indirect and induced effects is generally captured by using employment multipliers. Supplier related multipliers capture the indirect employment effects among suppliers of expenditure by hunts and followers. Income multipliers capture the induced employment effects in the wider economy of expenditure by hunts', followers' and suppliers' employees. However, there are a number of problems associated with calculating or using multipliers for these purposes. Multipliers are notoriously difficult to estimate, and 'standard' or assumed values are often used instead. There are some research-based estimates for rural sectors (although not for hunting, and published figures for related sectors vary widely), but it is far from clear that these can be applied to hunting.

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2.5. National studies examined

2.5.1. Mackenzie and Associates (1984) Survey of Employment and Participation in Hunting in Great Britain (commissioned by The Masters of Foxhounds Association). This early work provided the basis for much subsequent research. It was based on a survey of foxhound, beagle and harrier packs, both mounted and unmounted. A total of 193 hunts were surveyed, with 136 usable responses.

2.5.2. Because it is now somewhat dated, this study is not examined in-depth here, but the main result was that it estimated 1,050 FTEs were directly employed by hunts. This figure has been adjusted downwards by subsequent research, but has been accepted by most analysts as forming the upper limit of estimates.

2.5..3. Cobham Resource Consultants (1997) Countryside Sports: their economic and conservation significance (sponsored by the Standing Conference on Countryside Sports). This research was based partly on updating the data from Mackenzie (1984) on direct employment by the hunts, but it also used other secondary data (including data from earlier CRC studies and from BETA surveys) to estimate other components of employment.

2.5.4. The principal employment estimates derived from this study were as follows:

Induced employment via the multiplier was calculated to be 7,750 FTEs, giving total employment related to hunting of 22,950 FTEs.

• 2.5.5. These estimates can be criticised on the following grounds:

• the data on which this work was based was secondary and some was rather dated.
  
  
• the updating is achieved by applying the annual average rate of inflation for a basket of goods, without any allowance for the specific price behaviour of rural inputs over time.
  
  
• it has been argued in Segal, Quince, Wicksteed (SQW) (1997) and Ward (1999) that the figure of 7,600 FTEs directly employed by followers can only be explained as due to counting total expenditure on horses. This means there is double counting since it is also listed under allied expenditure. Supplier employment is counted three times: in participant direct employment, in direct estimation, and in the multiplier effects.

2.5.6. SQW explained that the CRC estimates for indirect employment differ from those calculated by them for the International Fund for Animal Welfare (IFAW) due to CRC using the British Equestrian Trade Association (BETA) estimate of £159m for total follower expenditure rather than the £71m estimate for horse related expenditure (they conceded that the former may well be a better measure).

2.5.7. The BETA survey had a 9% response rate: 5,085 firms were contacted, and 460 questionnaires completed. CRC acknowledged that there were inherent dangers in grossing-up when it was not clear whether respondents representative of the population, but extrapolated without any further correction or allowance for possible response bias.

2.5.8. The multiplier of 1.51 is not defined or sourced. It is higher than standard Treasury local (1.05) and regional (1.11) multipliers, although is consistent with the Treasury combined income and supply regional multiplier of 1.3 to 1.7. SQW (1997) and Ward (1999) consider it to be too high.

2.5.9. The participant employment calculations bias the indirect employment estimates upwards due to double counting.

2.5.10. Segal Quince Wicksteed Ltd (1997) Review of the Estimates of the Employment Impact on a Ban on Hunting with Dogs (commissioned by the International Fund for Animal Welfare). SQW calculations of FTE employment were based on expenditure figures used in the Cobham Resource Consultants work examined above, rather than on original research. This lack of primary data collection might make the inclusion of the SQW work in the review debatable, but it has value not least in that it illustrates how source data can be used by different researchers to produce widely differing results.

2.5.11. In estimating direct employment by the hunts SQW noted that CRC (1997) gave a figure of £17m spent by hunt organisers in 1996 (65% on the wage bill), with an average annual £25,000 spent by foot packs and £70,000 by mounted packs. They calculated that this gave average annual wage bills of £16,000 and £45,000 respectively.

2.5.12. SQW assumed arbitrarily that the average wage for hunt employees was 1.5 times the agricultural minimum wage of £8,060, ie £12,090. From this they derived an average 1.3 and 3.8 employees for foot and mounted packs respectively. Assuming 2.5 FTE jobs per mounted hunt, and 1 per foot pack they calculated 500 FTEs in mounted hunts (2.5 x 200 hunts) plus 122-144 FTEs in non-mounted hunts (1.0 x 122 - 144). From this they estimated that the direct employment by hunts was 620-644 FTE jobs.

2.5.13. In calculating direct employment by hunt followers SQW argued that expenditure on horse upkeep is the main factor determining expenditure and employment; and that estimating the number of participants is less relevant. They noted that:

2.5.14. In estimating indirect employment SQW used the IFAW estimate of 3,050 FTEs in closely related trades (which they admitted could be a substantial underestimate), plus a further 445 from multiplier employment, giving a total of 3,495 indirect and induced jobs. Total direct and indirect employment was, therefore, estimated to be 4,490 (995 FTEs directly, plus 3,495 indirectly and induced).

2.5.15. The SQW research can most obviously be criticised on the grounds that it did not involve any primary data collection, and was, therefore, limited to using secondary (i.e. CRC and IFAW) data, and it too is also sponsored by a proponent in the debate. These considerations aside, a weakness of SQW's direct employment estimates is that they are based on the unsupported assumption that hunts' and followers' employees are paid the agricultural minimum wage. The multiplier applied to indirect employment is relatively small and is thought only to be the first round multiplier effect. Nor is it clear whether a multiplier has been applied to direct employment.

2.5.16. Produce Studies Research (PSR) (1998) Employment generated by Fox Hunting in Great Britain (commissioned by The Countryside Alliance) This work was based on the Survey of Hunt Employees (1996), a national survey of foxhounds by PSR (1997), and the BETA national equestrian survey (1997) (also produced by PSR). To estimate employment by followers they used a stratified sample of a selection of 24 fox hunts (10 of which hunted more than 2.5 days per week, 12 which hunted 2 days per week, and 2 which hunted once per week). This involved responses from 1,328 followers, estimated as equal to 8% of the population of regular followers. They estimated that there were 16,700 followers, employing 11,400 people to care for their horses (PT and seasonal, not FTE jobs).

2.5.17. On employment by hunts PSR agreed with the CRC estimate of 910 FTEs directly employed by hunts, with earnings totalling £10m pa. Although they did not estimate the number of FTEs amongst followers. However, they identified 53% of followers’ horses as being used primarily for hunting and they applied this proportion to their estimate of 11,400 employees (not FTEs) to produce an estimated 6,040 direct jobs (not FTEs) attributable to hunting.

2.5.18. Estimates of indirect jobs in trades and local services generated by hunting were based on expenditure figures derived from surveys of hunts and the BETA national equestrian survey 1996. Total expenditure was estimated to be £204.3 million. The expenditure on 62,000 horses was factored at the rates of £2,100 per horse (a figure derived from the BETA survey) to give £131m with the remaining expenditure made up of expenditure by Hunts, Hunt members, non-Hunt members and annual capital expenditure. Employment was then derived by dividing total expenditure by an average per capita GDP figure of £23,000. Indirect employment was estimated to be 8,890 jobs.

2.5.19. These estimates sum to a total of 15,842 jobs (not FTEs), of which 6,952 (44%) were directly employed by hunts and participants (worth £35m), and 8,890 employed indirectly.

2.5.20. There are several possible criticisms of this work and limitations (related to its scope) on its potential for comparison with other work. The figures are for foxhounds only, in England and Wales. The details of the sources of the hunt expenditure figures were not made available. The employment estimates were not given in terms of FTEs, so are not easily comparable with other studies. The horse-related expenditure of the followers surveyed is allocated entirely to hunting use. The translation of indirect expenditure into employment using a GDP (value added) per employee figure is inappropriate and contributes substantial upward bias to the employment estimates. The estimates were for first round expenditure only and no multipliers were applied. A sample of 24 out of a population of 179 fox hunts is small and cannot give much information about regional variation.

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2.6. Summary of existing estimates of FTE Employment

2.6.1. For ease of reference, a summary of the employment estimates resulting from the national research examined is shown in Table 2.1. It should be borne in mind that the various estimates summarised are not always directly comparable; and it is recommended that the table should be read in conjunction with the text above. For the purposes of comparison, the table also includes PACEC's own estimates, which are explained in the following chapters.

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2.7. Evidence from other studies examined

2.7.1. Local studies provide some useful supporting evidence to, and help to validate, national research. However, they suffer from the obvious weaknesses of limited representativeness and, for this reason they are examined here only in brief. Three local studies, covering a total of 16 hunts, identified just over one hundred employees (or around 6 people per hunt):

2.7.2. Winter, M, Hallett, J, Nixon, J, Watkins, C, Cox, G, Glanfield, P (1993) Economic and Social Aspects of Deer Hunting on Exmoor and the Quantocks. (commissioned by The National Trust). This survey reported that the Devon and Somerset staghounds employed 8 people full time plus one person part-time, while the Quantock staghounds employed 3.5 FTEs.

2.7.3. Produce Studies Research (1997) The Economic Contribution of Leicestershire Hunts. This study reported that 7 hunts in Leicester employed 75 people full-time and part-time, but did not estimates FTEs.

2.7.4. Produce Studies Research (1998) The Economic Contribution of Hunting within the Scottish and Northumberland Borders (commissioned by the Borders Foundation for Rural Sustainability). This study reported that 7 hunts in Scotland and Northumberland employed 16 people, but again did not estimate FTEs.

2.7.5. In addition, Winter et al (1993) and Manley et al (1999) both report a rule of thumb of 1 FTE groom per 17 horses in subscriber households in their local research. Thus, using the figure of 40,000 hunting horses that is often quoted, this would generate a national figure of 2,350 FTEs due to employment by hunt followers. This is considerably less than the figure hitherto generated by research that might be associated with the pro-hunting lobby, but considerably more than that produced by research that might be associated with the anti-hunting lobby.

2.7.6. The results of the National Equestrian Survey 1999 (Produce Studies Research (1999)) are also of note because they illustrate the difficulties in estimating employment by followers of hunting. The survey was not focused on hunting, but its results indicate that private horse-owning households in Britain spent £65 million on paid help. This expenditure would generate 8,125 FTE jobs at around the minimum wage of £8,000pa. The survey also indicated that 7% of all privately owned horses and ponies are kept mainly for hunting and that a further 7% had some hunting use. In combination, these figures imply that only 570-1,140 FTE jobs are attributable to hunt followers, if it is assumed that the use of paid help is equally associated with hunting horses and ponies as it is with horses and ponies used for other purposes.

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3. Direct Effects - Income, Expenditure and Employment of the Hunts

3.1. Introduction

3.1.1. This chapter presents the findings of PACEC's work to validate and clean the data derived from the Countryside Alliance's survey of hunts; and to collect additional data, by means of a follow-up survey of a selection of hunt masters and treasurers included in the Countryside Alliance survey, to enable the production of detailed estimates of the employment, income and expenditure of hunts in England and Wales.

3.1.2. As was indicated in Chapter 1, the validation and cleaning consisted of: eliminating a number of questionnaires from the Countryside Alliance on the grounds that they were from Scotland or were duplicates; identifying completion errors and correcting them, where the error was obvious; identifying internal inconsistencies in completed questionnaires for subsequent investigation in the follow-up survey; and, re-inputting the data to ensure that there were no data entry errors. This produced a 'raw' dataset (i.e. cleaned, but unadjusted and not grossed-up), which provided highly aggregated details of employment, income and expenditure by 279 out of 302 registered hunts in England and Wales. This data was then grossed-up to produce estimates of employment, income and expenditure of all 302 hunts. It was then adjusted on the basis of what the follow-up survey revealed about the completion errors and inconsistencies that were investigated. The results of the follow-up survey were also used to break down the cleaned, grossed-up and adjusted data on employment, income and expenditure into finer detail (showing, for example, the nature of employment and the sub-categories of income and expenditure) than the Countryside Alliance was able to achieve. Finally - and reported later in this document - estimates of hunt expenditure and income were reconciled with others, including the expenditure of followers and estimates of the accounts for social and sporting events.

3.1.3. PACEC's overall conclusion about the validity of the Countryside Alliance dataset was that the contributors (i.e. individual hunts) had generally completed the questionnaire using their best endeavours to supply accurate information. The completed questionnaires had also been checked and data-processed with due care to produce the raw dataset. Most commonly, the errors and inconsistencies identified had arisen either because those who had completed the questionnaires were over-anxious to include all of the labour that contributed to the hunt (and, so, sometimes included unpaid workers and self-employed contractors, rather than employees only), or did not have the information on income and expenditure requested by the Countryside Alliance in a readily available form.

3.1.4. On the latter point, PACEC discovered during the follow-up survey that many hunts have only rudimentary accounts; and that the person (or people) responsible for income (or different sources of income) was (or were) often not the same as the person (or people) responsible for expenditure (or different parts of it). A substantial proportion of the hunts surveyed were satisfied if the books more-or-less balanced, or as long as someone (for example the master) was able to make good any shortfall in income over expenditure (and, so, did not formally record all inflows and outflows).

3.1.5. Before proceeding, it should also be emphasised that only employment, income and expenditure reflected in recorded cash in-flows and out-flows are shown in the analysis which follows. Voluntary labour, in-kind income of employees and barter are not shown (although each is thought to be substantial) either because they are simply not measured, or because they are sensitive.

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3.2. The raw data

3.2.1. Table 3.1 shows the summed key economic data from the cleaned (i.e. qualifying, visually checked and re-inputted, but not grossed-up and not adjusted) Countryside Alliance questionnaires. Almost all of the questionnaires gave details of employment and income. Slightly fewer gave details of revenue / operating expenditure and a significant proportion gave no details of capital expenditure. The questionnaires suggested that around two-thirds of the hunts collected fallen stock and information elsewhere in the Countryside Alliance questionnaire (not shown in the table) indicated that just under 60% of the hunts had their own incinerators. The Countryside Alliance questionnaire did not collect information on any income from the collection of fallen stock. The information in the table suggests that there is an average of 1.96 full-time employees, and an average of 1.17 part-time employees per hunt.

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3.3. Grossed-up data

3.3.1. Table 3.2 presents the information from Table 3.1 in grossed-up form to allow for non-response from some hunts and lack of data from some of the respondents on some of the key items. The data from Table 3.1 was grossed-up to a control total of 302 registered hunts in England and Wales. However, it should also be explained that it was assumed that the hunts which did not respond were similar in their employment, income and expenditure patterns to the smallest one-third of hunts that did respond (i.e. that the non-respondents were on average relatively small). For the purposes of illustration, the alternative assumption (but one which was considered to be naive and less safe) that non-respondent hunts had the same characteristics as those that did respond would have yielded a figure of 946 full-time and part-time jobs, or 770 FTEs. Thus, although the grossing-up method makes a difference to the estimates produced, the difference is not dramatic because the response rate to the Countryside Alliance survey was so high.

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3.4. Grossed-up and adjusted data

3.4.1. Table 3.3 presents PACEC's preferred estimates of hunts' employment, income and expenditure, as derived from the adjustment of the grossed-up Countryside Alliance data in Table 3.2. The adjustments arose because the request in the follow-up survey of hunt masters and treasurers for more detailed information on employment, income and expenditure than was the case with the Countryside Alliance survey necessitated the respondents to double check the information they had previously provided. This double checking revealed that the respondents followed-up had tended to overstate their income and slightly overstate their capital expenditure, but had tended to understate their revenue / operating expenditure and slightly understate the cost of collecting fallen stock. The grossed-up estimates shown in Table 3.2. were, therefore, scaled accordingly.

3.4.2. Table 3.3 indicates that, collectively, hunts incur a loss on their income and expenditure accounts. It also indicates that they recover somewhat less than half their costs of collecting fallen stock. On the former point, a number of respondents in the follow-up survey volunteered the information that losses are often covered by unrecorded payments from members' (most commonly, the masters') own pockets, or from accumulated bank balances. On the latter point, it was explained that farmers who support the hunt are often not charged at all when the hunt collects fallen stock; and that farmers in general tend to be charged at less than cost. It was also suggested by one respondent that not all revenues from the collection of fallen stock are shown in the hunt accounts because at least some of the payments made by farmers or by knackers accrue directly to hunt employees in the form of a perk. Most importantly, however, it should be recognised that shortfalls in revenue over costs associated with the collection of fallen stock will tend to be compensated for by the fact that hunts' cash expenditure on dog feed is reduced.

* not examined in the Countryside Alliance questionnaire

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3.5. Breakdown of income and expenditure

3.5.1. Table 3.4 shows, based on the findings of the follow-up survey, the break down of the income, revenue / operating expenditure and capital expenditure estimates shown in Table 3.3. On income, the table shows that just over half was derived from payments by members, subscribers and other following the hunt. Closely-related sporting and recreational events contributed nearly 40% (and Other / unspecified income (which included mainly income from the collection of fallen stock) accounted for 10%. Most of the masters / treasurers (i.e. 83%) surveyed by PACEC reported that all of the income and expenditure from the closely-related sporting and social events was included in the Hunt accounts, and the remainder reported that only the surpluses from these events that accrued to the Hunts was included. Likewise, most (i.e. 88%) reported that income and expenditure from the collection of fallen stock was included in the Hunt accounts.

3.5.2. Nearly 40% of Revenue / operating expenditure was accounted for by staff cost. The item 'surpluses / unallocated' is taken to be mainly miscellaneous expenditure, rather than surpluses per se because it was shown above that hunts' as a whole operate with negative cash flow. The precise nature of this item was poorly described by the respondents, usually because the accounts were informal and not detailed. However, some indicated that expenditure on horses was included, whilst others included this under 'vehicles' in capital expenditure.

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3.6. The pattern of employment

3.6.1. Also based on the detailed inquiries as part of the follow-up survey, Table 3.5 breaks down the estimate of 811 hunt employees, or 710 full time equivalents. It shows that hunting employment is highly concentrated in the South West of England (i.e. the counties of Devon, Cornwall, Somerset, Dorset, Wiltshire and Gloucestershire). At the other end of the scale, only 3% of hunt employment is in the predominantly urban North West (i.e. the Manchester and Merseyside conurbations, Lancashire and Cheshire). More than half of the employees were described as huntsmen or kennelmen (although they were often described as hunt / kennelmen) and more than a quarter were grooms or stable workers [2]. Nearly three-quarters of the employees were males, nearly three-quarters were full time and more than seven in ten were employed for 10 months or more of the year.

[2] PACEC found no direct evidence of Hunt Masters being categorised as employees, although it is possible that some were included under the occupational categories shown in Table 3.5

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3.7. Other findings from the follow-up survey

3.7.1. It was found during exploratory pilot interviews with hunt masters that there were some employees (for example, estate workers) who worked largely or exclusively on hunt-related tasks (e.g. mending fences, or managing coverts and earths), but who were not paid by the hunt itself. Although these workers are clearly not hunt employees, it was decided to investigate, as part of the follow-up survey, how many such people there were, because their jobs would be vulnerable to a ban on hunting with dogs. However, it was estimated that there were only 29 full time equivalent employees in this category associated with all hunts in England and Wales.

3.7.2. The opportunity was also taken to examine the hunts' views on whether the associated sporting, social and recreational activities from which the hunts obtain an estimated 38% of their income (see Table 3.4) would continue independently in the event of a ban on hunting with dogs. Perhaps unsurprisingly, the hunts were generally of the view that they would not, with a minimum of 77% of respondents saying that particular activities would probably not or definitely not continue.

3.7.3. The hunts were also asked whether they would continue to collect fallen stock in the event of a ban on hunting with dogs and 90% stated unequivocally that they would not (implying that they would not switch to other forms of hunting, e.g. drag-hunting, that did not involve live animal quarry). The remaining 10% were less emphatic, but expressed generally negative views of the consequences for their fallen stock collection, for farmers and for the environment.

3.7.4. Lastly, PACEC were asked to use the opportunity afforded by the follow-up survey to investigate the possible consequences for fallen stock collection of the proposed EU Directive on incinerators. The Directive is intended to reduce emissions and harmful waste from incinerators, and implies that incinerators that do not meet the proposed standards will need to be upgraded or replaced. Nearly 70% of the hunts followed-up currently operated their own incinerator. Of these, 52% said that their decision would depend on the precise details of the Directive, 19% said that they would cease fallen stock collection, and 11% said that they did not know of the Directive. The remainder either said that they would upgrade their incinerator and continue fallen stock collection or that they had been told by officials that their incinerators already conformed with the Directive.

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4.1. Introduction

4.1.1. The estimates here are based largely on PACEC's survey of followers, for which the sampling frame / contact details were supplied by the Hunt Masters followed-up. Because of the source of contact details PACEC expected bias towards keen followers, and this proved to be the case. 77% of the 166 respondents described themselves as being more involved in hunting than the average follower, 21% described themselves as being involved to about the same extent as the average follower and only 2% described themselves as being less involved than the average follower.

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4.2. Number of followers

4.2.1. There are no satisfactory estimates of the precise number of hunt followers. The cleaned Countryside Alliance dataset indicates that there are 27,470 Subscribers (including members) and 37,151 Supporters Club Members attached to the Hunts that responded. Conservative grossing-up (i.e. assuming that the non-respondent Hunts were the same as the smallest third of Hunts that did respond) implies a total of 28,999 Subscribers / Members and 37,904 Supporters Club Members, or a total of 66,903 followers of both types.

4.2.2. But the figure of 66,903 is likely to overstate the true population of followers because some or many followers are likely to be associated with more than one Hunt. Indeed, PACEC's Survey of Followers found that Subscribers / Members had followed a mean of 2.88 different hunts during the past 12 months, and Other Supporters had followed an average of 3.63. If following more than one hunt equates to subscribing to all of them or being a member of several supporters' clubs these figures would imply a total of 10,069 Subscribers / Members and a total of 10,442 Other Supporters, or 20,511 followers of both types.

4.2.3. However, it is unlikely that the equation suggested above holds true because it is easy to attend a hunt meeting without being a subscriber to the hunt or a member of a supporters' club. In fact, the Countryside Alliance dataset indicated that 30% of the mounted followers at the average meeting were non-members of the hunt, and that 75% of non-mounted followers were non-members of the supporters club.

4.2.4. In these circumstances compromise estimates are needed, for want of something better. Taking the mid-points between the higher and lower estimates shown above implies that there are 19,534 Subscribers / Members and 24,173 Other Supporters, or a total of 43,707 followers of both types. These compromise estimates were used in the draft report, but further information became available at the seminar with the Inquiry and subsequently, and the figures used subsequently are consistent with approximately 29,000 subcribers / members.

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4.3. Expenditure on horses and hunting

4.3.1. Information on horse and hunting expenditure was collected on a per-household basis. In Subscriber / Member households that described themselves as involved in hunting to about the same extent as the average follower a mean of 2.21 people followed the hunt, and in averagely involved Other Supporter households a mean of 2.46 people followed the hunt. In combination with the compromise estimates above, these figures would imply that there are approximately 13,000 Subscriber / Member households and approximately 10,000 Other Supporter households, or 23,000 follower households of both types.

4.3.2. Averagely involved follower households kept a mean of 1.7 horses each, with greater-than-average households keeping 2.4 and less-than-average 0.3. Unsurprisingly, the expenditure per household was closely related to the number of horses kept, with horse-keeping households spending approximately £2,600 per horse, as shown in Figure 4.1. The linearity in Figure 4.1 is so strong that it moves the burden in estimation to the number of horses used for hunting (about which there is less contention than there is about the number of followers) rather than the number of individual hunt followers or follower households. PACEC estimated the number of horses used for hunting to be 50,000, although the effect of varying this estimate is examined later.

4.3.3. This aggregated expenditure can be broken down using the PACEC survey data on the pattern of expenditure by followers as shown below:

4.3.4. Although Table 4.1 is based on an adjusted compromise estimates of the population of hunt followers, it is noteworthy that the estimate of £11.3 mn paid by followers to hunts corresponds to the earlier estimate that 51% of the Hunts' total income of £15.6 mn (i.e. £8.0 mn) is derived from Subscriptions, donations, caps and gifts. This suggests that the compromise used was reasonable, given that the two items 'Payments to Hunts' and 'Subscriptions, donations, caps and gifts' are not precisely the same.

4.3.5. While expenditure on the first two items in the table are clearly attributable to hunting, expenditure on the remaining items are attributable to hunting only to the extent that the horse-related activity that gave rise to the expenditure was hunting, as compared to other activities such as hacking, point-to-pointing, show-jumping etc. To address this problem the followers were asked to indicate what proportion each of their horse's time was allocated to different activities and what proportion of the household's expenditure on horse-related activity was attributable to that horse.

4.3.6. On the basis of this information it was estimated that 51% of the horse-related expenditure of followers is attributable to hunting). Knowing this it is then possible to allocate the expenditure shown in Table 4.1 to hunting per se. This is done in Table 4.2. The Table also assumes that the first two items from Table 4.1 are wholly attributable to Hunting, but scales them down to match the income reported by the Hunts. Expenditure on other items from Table 4.1 are subject to the apportionment described.

4.3.7. The expenditure information above does not include the cost of purchasing horses. 18% of the horses that were used for hunting (if only for a small part of their time) were purchased (or in some cases bred) in 1993 or earlier, 29% in 1994-1996, 31% in 1997-1998 and the remaining 21% in 1999-2000. These figures suggest that roughly 12.5% of the stock is replaced each year. The mean cost of a horse purchased by averagely involved followers was £2,142, including those that cost nothing (i.e. were a gift or were home bred). In combination with the earlier information on the number of horses per household, the proportion of their time spent on hunting and the number of follower households, this implies that followers of both types spend £8,345,915 a year on horse purchase, of which £3,622,127 is attributable to hunting.

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4.4. Employment by followers

4.4.1. Grossing up the number of people employed by the followers to help care for their horses was done on the basis of the number of horses owned, and by the reported hours worked and weeks worked per year. An implied ration of 16.9 horses per FTE was used in the grossing-up process.

4.4.2. In conjunction with the wage data in the tables above, these employment estimates suggest that the full time equivalent wage is £8000 per annum. This figure is credible, less than the average for the economy as a whole, but about £1000 per annum more than the minimum wage. Several of the respondents volunteered the information that their employees were youngsters who were working for enjoyment as much as for money, and who took much of their income in-kind.

4.4.3. The number of FTE employees paid by followers is therefore estimated at 1,497. This compares with an estimate of 6,100 (not FTEs), made by Produce Studies Research (1998). PACEC estimates that this latter figure is equivalent to between 2,200 and 2,850 FTEs depending on the precise method for conversion of jobs to FTEs. This is approximately between one-and-a-half times greater to double that of the PACEC estimate above. These differences are largely attributable to the way in which horses have been allocated to hunting and the survey results on the number of grooms employed and horses owned by hunting households. If, for example, the number of hunting horses were assumed to be 60,000 [3] (rather than 50,000), then the number of jobs supported would increase by about 300 FTEs and the difference between the Produce Studies (1998) estimates of direct jobs and those produced here would fall accordingly.

Section 4.4 footnote:

[3] The figure of 60,000 is in line with the data in the National Equestrian Survey 1999 (Produce Studies Research (1999)) on the number of privately-owned horses and ponies that are kept mainly for hunting (after allowing for the fact that the survey covered Great Britain, whereas PACEC's estimates were concerned with England and Wales only).

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5. Indirect and Induced Effects

5.1. Introduction

5.1.1. As indicated in Chapter 1 we have used social accounting methods at two levels in our analysis, to draw up a reconciled set of accounts and to project the implications of those.

5.1.2. Firstly we have drawn up a social accounting matrix of the ‘hunting’ economy. This identifies a total of approximately thirty-three groups of economic stakeholders in hunting activity and shows the transactions between them: hunts, followers, employees, and the various businesses they interact with in the wider economy.

5.1.3. Secondly we have set the hunting activity in the context of social accounts for the whole of the nation, specifically the input-output balances from which the UK’s national accounts are drawn up.

5.1.4. Our aim was to marry an understanding of what goes on in hunting with how it interacts economically with the rest of society. This is comparable to on the one hand investigating the engine, suspension and bodywork of a car, and on the other hand observing how it behaves in traffic on the road. We believe that both appreciations are necessary for a full understanding of the impact of hunting, actual and potential.

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5.2. Reconciling participants’ other expenditure and hunt income and expenditure

5.2.1. As we have seen, the bulk of participant’s expenditure goes on the purchase and maintenance of horses. However they also make payments direct to hunts, for caps, subscriptions and as donations, and they spend money on social activities to do with hunting.

5.2.2. Given the nature of the surveys, there was a good correspondence between the expenditure reported by the participants, and the income reported from the hunt. On the basis of the crude figures then horse-owning households reported a grossed up figure of £10.2 mn and non horse-owning households £1.1 mn. However, the grossed up total of £11.3 mn exceeds the £8.0 mn reported by the Hunts.

5.2.3. As indicated in Chapter 4 we decided to prefer the Hunt figure, on the basis that the survey coverage was much greater proportionally, and less likely to be subject to sampling error, then the follower figure, and also that the preponderance of followers described themselves as ‘more than average’ supporters, and this in itself called for caution in grossing up.

5.2.4. This left an allocation issue: should the remaining £3.3 mn be considered as an error in the total expenditure reported by participants, or simply as an error in the proportion allocated to caps, donations and subscriptions? The allocation effected was a balance between these two, with half the discrepancy being allocated to the remaining expenditure categories and half taken as bias in the reported expenditure figures.

5.2.5. A similar issue arose over social activities, but although of greater magnitude, this was easier to resolve. The Hunts reported an income from social and recreational activities of some £4 mn, with 83 per cent of Hunts saying that this figure included the gross income from point-to-points, balls, ‘race’ or ‘bingo’ nights, gymkhanas, puppy-shows and other events. However horse-owning followers reported expenditure of £8.7 mn and non-horse-owners £1.8 mn on social events and sporting events, or £6.8 mn more than received.

5.2.6. It appeared that the net/gross discrepancy was of some importance. For example, if a ‘race night’ (a form of lottery where typically supporters hold sweepstake tickets on horses in an obscure American horse race, and the entertainment is to watch a video of the race) were held in a pub which provided a room free of charge, to the participants the gross costs would be the cost of travel, of entry, of race tickets less winnings, and of food and drink consumed, to the organisers the ‘gross’ proceeds would be only entry and race tickets. Similarly, the Hunt expenditures rarely appeared to cover the full cost of a Hunt Ball, or a Point-to-Point.

5.2.7. The expenditure and income figures were able to be fully reconciled on the basis of Hunts receiving approximately one half of supporters’ gross expenditure on balls, point-to-points, other social events and other animal or sporting events. These appear to us to be in line with other voluntary organisations.

5.2.8. The final reconciled hunt income and expenditure account was as follows:

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5.3. Hunt-related businesses

5.3.1. There are a number of businesses which are particularly strongly linked to hunting and equestrian pursuits – farriers, livery stables, saddlers, specialist retailers and wholesalers, feed manufacturers, specialist transport undertakings, and veterinary surgeons. PACEC surveyed 156 of them, primarily a subset of the 1000 businesses covered in the National Equestrian Trades Survey.

5.3.2. There were a number of data difficulties. Primary amongst these was that fewer than half of the businesses would reveal sales and very few of the businesses indeed were willing to declare their operating expenditure – 22 in all. Of these more than half were in the distributive trades – wholesaling and retailing – and it was clear that the responses were not consistent as to whether the purchase of goods for resale was, or was not, classified as an item of operating expenditure. Another major problem was that the supplier businesses range from the very small (£24 000 turnover) to the relatively large (£20 mn turnover), so there was no ‘typical’ business.

5.3.3. The business areas covered were as follows:

5.3.4. Thus although the distinctive hunt-related suppliers were included, in no trade were there a significant number of respondents.

5.3.5. Such difficulties are not unusual in supplier surveys, even for official questionnaires where the inquiry is backed by statutory compulsion, when they deal with the very small businesses of the size found amongst hunt suppliers. The mean number of employees amongst the 156 survey respondents was 7, and amongst those giving cost details was only 5.

5.3.6. The approach followed was therefore to take a balanced UK-wide view for each of the key trades, and to compare the pattern of costs (and therefore economic impact) for that with the result from the PACEC survey.