Fixed Odds Betting Terminals

Lady Hermon Excerpts

Tuesday 26th April 2016 Westminster Hall

[Jim Shannon]

The hon. Gentleman is absolutely right. We have many concerns. Today’s debate is fixed primarily on the fixed odds betting terminals, but I accept that control is needed elsewhere.

The lack of regulation of FOBTs has meant that they have clustered in areas of high social deprivation. They can prey on the young and vulnerable. There is strong evidence that the high stakes on FOBTs in the low-supervision environment of a bookmaker have led to increased problem gambling. Recent Responsible Gambling Trust research on FOBTs showed that 37% of players exhibited signs of problematic gambling. At stakes of more than £13.40 a spin, that rose to 80% of players exhibiting problem gambling behaviour. One third of problem gamblers calling the national problem gambling helpline cited FOBTs as their issue. Let us be clear that the debate is about fixed odds betting terminals and the blight they cause on society.

[Lady Hermon (North Down) (Ind)]

There is evidence that the terminals have been used for money laundering. Will the hon. Gentleman reflect on the involvement of paramilitary organisations in money laundering through the terminals in Northern Ireland?

[Jim Shannon]

The hon. Lady is absolutely right. There is evidence of that, and I will give examples shortly. I am sure others will, too. Whenever there is misuse and a dirty laundering system, that has to be addressed.

More than half the UK population plays the national lottery, and they lost £7.2 billion last year. That compares with the less than 4% of the population who play FOBTs, who lost £1.6 billion. The unemployed are twice as likely to play the machines as someone in work. The demographic that bookmakers target with FOBTs are also the least likely to have access to bank accounts, debit cards and credit, and thus have restricted access to remote gambling sites. Bookmakers and the gambling associations are clearly targeting those who are vulnerable to start with, but who are perhaps in some difficulties with money, too.

Bookmakers are using the cover of account-based play, which was instigated by the Government, to provide cash top-up cards that facilitate access to their online sites; the hon. Member for Alyn and Deeside (Mark Tami) mentioned such sites in his intervention. The gambling lobby says that we need more evidence, but it is clear that the evidence is out there. It is comprehensive, and it consistently lines up on the right side of the argument: we need to protect the vulnerable and enact regulation. I hope that, arising from this debate, we will have a chance to enact regulation that will filter out from this House to the whole United Kingdom, including Scotland and Northern Ireland.

FOBTs are useful for money laundering, as the hon. Member for North Down (Lady Hermon) said. The machines have a few filters, but the money launderers know them and work within the limits. Supervision is low and closed circuit television is poor, so it is a safe way to money launder. Low-level drug dealers clean cash in case they are pulled over by the police. Generally, they are younger lads with smaller amounts of cash. In one West Yorkshire case, the police uncovered £18,000 of FOBT tickets being held by one drug dealer. The machines are used for underworld criminal activities by those whose thoughts are nothing but criminal and outside the law.

Using the proceeds of crime to fund a gambling addiction, or cleaning the cash obtained from a crime, is common. The most common use of FOBTs since they landed on the high street is for getting rid of dyed notes obtained during robberies on armoured vans, cash machines and so on. The notes are sprayed with an irremovable dye that is an immediate alert as to their origins. They are therefore not exchangeable. However, they are still identified as legitimate currency by note accepters on gaming machines. The machine with the highest cash transaction capability and ticket pay-out facility would be the preferred option for laundering, and that is the fixed odds betting terminal.

The bookies and the suppliers adapted the software controlling ticket pay-outs to identify where less than 40% of the cash put in is wagered—that is where people either put cash in a FOBT and then print a ticket straight out, or stake a minimal amount of the total cash inserted—so that staff are alerted when people cash those tickets. Launderers have adapted to that by using minimal-risk wagering. The bookies are now making it easier for criminals by allowing them to put cash winnings on to a pre-paid credit card. They are not just hiding the cash, but making it electronic. Never ever think that the criminals and evildoers have not got ideas as to how to get around the law, how to work it to their advantage and how to launder some of that dirty money.

Following on from weaknesses in money laundering policies at Ladbrokes in 2013, Paddy Power was recently the subject of a high-profile money laundering investigation. That investigation resulted in the Gambling Commission reprimanding Paddy Power and imposing a £280,000 penalty; there were also serious failures in social responsibility. The Government are considering including betting shops in the European Union’s fourth money laundering directive. That would require the identification of customers transacting over £1,500 in a 24-hour period. The bookmakers are lobbying to be excluded from that, despite recommendations that they should be included first being made in 2001 in the Budd report.

The lack of FOBT regulation is a huge issue that cannot be ignored, and I am keen to ensure that the debate highlights it. Gambling the world over has evolved into a consistent structure, with the hardest gambling reserved to highly regulated venues such as casinos, where customers go with the knowledge and expectation of experiencing a harder gambling environment. Casinos have very high levels of player supervision and therefore protection. Players tend to be occasional visitors, and the casinos tend to be viewed as a destination leisure venue with more than just gambling on offer.

The Gambling Act 1968 put in place a regulatory permit for gambling. This set out that high-stakes gambling should take place in highly regulated and highly supervised environments such as casinos, and low-supervision environments should have lower stakes and require lower levels of supervision. Those principles were reaffirmed in the Gambling Act 2005 by Sir Alan Budd. Other countries follow this model. The UK is alone in offering very-high-stakes gambling of £100 on Britain’s high streets in the low-supervision, easily accessible environment of a bookmaker. Little or no monitoring and little or no supervision means vulnerable people can be taken advantage of. The regulation of fixed odds betting terminals is out of kilter with the principles of gambling regulation. They offer very-high-stakes gambling in an unregulated environment.

The only material restriction is that bookmakers are allowed four fixed odds betting terminal machines per shop. The result of this is that bookmakers have opened multiple betting shop branches in close proximity. That is a concern. When we look at the streets of the United Kingdom of Great Britain and Northern Ireland, we sometimes wonder whether we are in a gambler’s paradise—if there is such a place—because betting shops seem to be prevalent everywhere.

The bookmaker Paddy Power has focused its branches in areas with high immigrant populations. We have seen a 43% increase nationally in the number of betting shops located in town centres.

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[Mr Robertson]

I will come to that in a moment, but I just wanted to establish where I am coming from on this issue. There is a link between bookmaking and horse-racing, and if we lose one, without doubt we will lose the other. I want that to be very clear. There are far fewer betting shops than there used to be. We hear about the proliferation of bookmaking shops, but there are something like half the number there used to be. It is important to recognise that, while certainly acknowledging the issues raised by the hon. Member for Strangford.

You have asked us to take very little time each, Sir Alan, and I am happy to comply with that. I hope that the Government will continue with their evidence-based approach. I am not convinced that there has been an increase in the number of problem gamblers. There are people with addictive natures who will be addicted to something, whether that is alcohol, drugs or gambling, but we are discussing only one form of gambling, and many other forms are available.

Any Member could use their mobile phone to empty their entire bank account into a betting account and lose all that money within a minute or two. I mention that to draw attention to whether it would be fair to place restrictions on one kind of gambling when so many other forms are available, including the national lottery. I have linked horse-racing to bookmaking, and I also want to link the national lottery to the many good causes it supports. Billions of pounds have been spent on good causes thanks to the national lottery. I have some news for Members: that money is taken not from the millions of pounds that are won but from the money that people lose on the national lottery each and every week.

I hope we can get a measure of proportion into this debate. The Government should take seriously the important points and concerns raised by the hon. Member for Strangford, but I ask them to continue with their evidence-based approach and to remember that the great sport of horse-racing depends on the actions taken by my right hon. Friend the Minister and the Government.

[Lady Hermon]

The hon. Gentleman is of course the Chair of the Northern Ireland Affairs Committee, of which I am very proud to be a member. He chairs us well.

The hon. Gentleman has called for an evidence-based approach to be taken before the Government do anything, and he mentioned race courses in Northern Ireland. Can he produce any shred of evidence that those who go to the horse-racing in Northern Ireland, or anywhere in the United Kingdom, are the same people who play on fixed odds betting terminals? Where is the evidence for that connection?

[Mr Robertson]

That is not quite the point I was making. The situation is a lot worse now, but five years ago PricewaterhouseCoopers produced a report that said that up to 95 shops in Northern Ireland, which represents around 30% of the total there, would close if fixed odds betting terminals were banned. The hon. Lady is not calling for them to be banned, but that shows the scale of the problem. Some 975 jobs would be lost, costing £18 million per annum throughout Northern Ireland. The knock-on effect for the betting industry and therefore for horse-racing would be huge, because it is the machines that tend to keep the shops going. I am sorry that I did not explain that earlier, but that is my point. Fixed odds betting terminals are far rarer in Northern Ireland, where there are fewer than two per shop, than in Great Britain, where the number is nearer to four, so I am not convinced that the problem is greater in Northern Ireland. That does not mean that there is no problem, but if there is one I do not think it is of the same scale.

Sir Alan, you have indicated to me that I should draw my remarks to a close, so I repeat to the Government: please continue to take an evidence-based approach, and please remember that the sport of horse-racing depends on bookmaking.

EU Referendum: Timing

Lady Hermon Excerpts

Tuesday 9th February 2016 Commons Chamber

[John Penrose]

Absolutely. Europe is one of those issues that may be extremely exciting for a small number of people—extremely exciting, perhaps, to a small number of people in this place and in the half-mile that surrounds us—but if we “bang on about Europe” for far too long, we shall run the countervailing risk of starting to turn people off the whole issue, important though it is. A decent period which, after all, we use to decide general elections is what the country and the electorate are used to. It allows plenty of time for a full and in-depth discussion of the issues that need to be covered, without necessarily boring everyone to tears and turning everyone off before they go to the ballot boxes. Of course I entirely accept that a gap will be necessary.

[Lady Hermon (North Down) (Ind)]

Given that Northern Ireland remains part of the United Kingdom and will continue to do so for a long time, I expect the Prime Minister of the United Kingdom to come to Northern Ireland and campaign for it to remain part of the European Union. It would be helpful if the Minister confirmed that the Prime Minister will indeed campaign in Northern Ireland, but will do so after the Northern Ireland Assembly elections and not before.

[John Penrose]

I thank the hon. Lady for giving me this opportunity to commit the Prime Minister’s forward diary in such a specific way, although I think it would be a career-limiting move were I to do so. I suspect that she will nevertheless make her point strongly, and my right hon. Friend will have an opportunity to respond to it specifically.

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[Pat Glass]

Yes, I do. In areas such as my hon. Friend’s and my own, which have been dominated by flooding, that is a big issue.

[Lady Hermon]

The hon. Lady will of course be aware that the Northern Ireland Labour party intends to run candidates in the Assembly election, whether or not her party leader agrees. Is she aware of any objections from her colleagues in the Northern Ireland Labour party to the possibility of an early EU referendum in June? Has she heard of any complaints from them?

HMRC Office Closures

Lady Hermon Excerpts

Tuesday 24th November 2015 Commons Chamber

[Hannah Bardell]

I shall continue. The UK Government’s plan to slash 137 local HMRC offices across the UK will inevitably have a knock-on impact on the ability of SMEs to access information and advice on tax.

I would like to give my personal thanks to Gary Stein and his PCS colleagues who met me, my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) and MSP Angela Constance immediately after the closure announcement. I know that other PCS colleagues held similar meetings across Scotland and the UK. Gary and his PCS colleagues are working hard to engage staff and management in offices in West Lothian and have made clear their concerns about morale and the range of issues that I have highlighted. It cannot remain unsaid how valuable our local unions are in this process, and I am sure that it is not without sinister intention that the Government have marched ahead with their undemocratic Trade Union Bill, which would mean that the important work that our unions do in such situations would be made ever more difficult. Never has it been more vital that we have good engagement with the workforces who deliver essential public services.

[Lady Hermon (North Down) (Ind)]

Will the hon. Lady give way?

[Hannah Bardell]

I would be happy to do so.

[Lady Hermon]

I know that the hon. Lady is storing up the best until last, but in the meantime I am grateful to her for allowing me to intervene. We have a serious issue in Northern Ireland. We are the only part of the United Kingdom to share a land frontier with another EU member state, which gives rise, very unfortunately for HM Treasury, to fuel smuggling and the loss of a huge amount of revenue along the border with the Republic of Ireland. The announcement of the closure of HMRC offices in Northern Ireland has serious consequences, so will the hon. Lady reflect on that before she calls on someone else to intervene?

[Hannah Bardell]

I share the hon. Lady’s concerns, which will be shared across Scotland and other parts of the UK. My local PCS representatives spoke about what they felt was a perfect storm brewing. The greater the pressure we put on our public services and the more we squeeze them, the more likely it is that there will be major breakdowns in the system.

I am going to finish up. [Hon. Members: “Oh!”] I am sure that the hon. Member for Upper Bann (David Simpson) can save his intervention for speeches by other colleagues. I urge all parties across the Chamber to support our motion and ask this Tory Government in the strongest terms to think again on these nonsensical and ill-conceived HMRC closures.

Tax Credits

Lady Hermon Excerpts

Tuesday 20th October 2015 Commons Chamber

[Damian Hinds]

It is indeed an extraordinary amount. For every month we fail to deal with the deficit, not only would we be racking up more debts for all our children but we would be incurring greater interest charges in the here and now, which means money not spent on other essential services.

[Lady Hermon (North Down) (Ind)]

I am grateful to the Minister for giving way, although I am not quite sure he will be so grateful when he hears my question. I have to admit—in fact, I am embarrassed to say—that I voted with the Government on the cut to tax credits. I did so on the clear basis and understanding that there would be mitigation in the Chancellor’s autumn statement of the worst effects of the cuts to tax credits. The Minister cannot imagine my anger as I listened to his party’s conference, and the Prime Minister and the Chancellor ruled out any such mitigation. I will be voting with the Opposition this evening, unless the Minister tells this House today what mitigation the Chancellor will guarantee in his autumn statement. I give the Minister the opportunity to persuade me to change my mind.

[Damian Hinds]

The hon. Lady, who is a veteran and very experienced in the House, will know I cannot pre-empt anything in the Chancellor’s autumn statement on this or on any other subject. She was right to vote with the Government on the statutory instrument. As I will be outlining in my remarks today, this is a reform package of measures for working people. It is the right thing to do for the future of those families and the future of our country.

National Insurance Contributions (Rate Ceilings) Bill

Lady Hermon Excerpts

Tuesday 15th September 2015 Commons Chamber

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I beg to move, That the Bill be now read a Second time.

This Bill implements our manifesto commitment not to increase national insurance contributions for employers and employees. It will be interesting to discover whether it will be opposed by Her Majesty’s Opposition now that their new leader favours a 7% increase in national insurance for higher earners.

Hon. Members will be aware of the Government’s strong record of significantly reducing the burden of national insurance. At Budget 2011, my right hon. Friend the Chancellor announced a £21 a week above-inflation increase to the employers national insurance threshold. In 2014 we introduced the employment allowance to support businesses and charities across the UK by saving them up to £2,000 every year, and that has already benefited well over 1 million employers. The Government are now going further, and hon. Members will recall that the Chancellor announced in the summer Budget that that saving would be increased to £3,000 from next April. That means that a business will be able to employ four people full time on the national living wage and pay no national insurance at all.

From April 2015, the vast majority of employers employing under-21-year-olds were lifted out of employers national insurance as well. The exemption will be extended to cover apprentices under 25, helping young people to stand on their own two feet and fulfil their aspirations.

[Lady Hermon (North Down) (Ind)]

I am sorry to intervene so early in the Minister’s speech, but for the sake of clarity will she explain the long title to the Bill, which appears to apply only to class 1 national insurance contributions? I presume that the other classes will be covered in due course.

[Harriett Baldwin]

My remarks will be so short that hon. Members will need to intervene quickly with their points of clarification on this five-clause Bill. The hon. Lady will be aware that in the summer Budget the Chancellor announced that we are asking the Office of Tax Simplification to look at class 2 and class 4 contributions. We are expecting that consultation, which opened on 21 July, to inform the Budget next year. She asks a sensible question and I welcome her curiosity.

--- Later in debate ---

[Barbara Keeley]

No, I have nearly finished.

As I have argued, the Bill provides no protection for millions of hard-working families, and if the statutory instrument on tax credits is voted through by Conservative Members, those families will be £1,000 a year worse off on average. That will be a direct result of the Chancellor’s fiscal decisions, and I believe many Conservative Members will come to regret it. Ministers should not be wasting their time on legislative gimmicks such as this so-called tax lock.

[Lady Hermon]

I am most grateful to the hon. Lady for allowing me to intervene. She will know that the Bill extends to Northern Ireland. I have listened very patiently to what she has said here today, but I think the people of Northern Ireland and of the United Kingdom generally are entitled to know the policy of the Labour party, the main Opposition party, after a change in the leadership and with a new shadow Chancellor of the Exchequer. What exactly is their policy on national insurance contributions? Is Labour not going to increase them? Does Labour agree with the Government that they should not be increased for five years? Is that the clear policy of the Opposition?

[Barbara Keeley]

Yes, it is. I am the shadow Treasury spokesperson responsible for the Bill today. [Interruption.] Well, I am standing here today. We made the pledge first. I am very pleased that the hon. Lady raised the question in the manner she did. As I say, we made the pledge first: it is our pledge. Let us get back to that point.

Rather than wasting their time with gimmicks such as this so-called tax lock, Ministers should perhaps direct their focus on supporting low and middle-income families. [Interruption.] Ministers should really bear in mind that every time they sit there laughing on a day when they are going to take £1,000 off 8 million hard-working families, they simply provide grist to the mill of people who contribute to newsletters up and down the country. The Government’s fiscal policies are too serious for Ministers to sit there laughing. I really advise them to stop it. They should direct their focus at supporting low and middle-income families who will be worst hit by the summer Budget of this Conservative Government—with or without a tax lock.

Tax Credits

Lady Hermon Excerpts

Tuesday 15th September 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Damian Hinds)]

I beg to move,

That the draft Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015, which were laid before this House on 7 September, be approved.

I confirm, as required, that the provisions before the House today are compatible with the European convention on human rights.

The aspects of tax credits we are voting on today are amendable by statutory instruments, as laid down in primary legislation in 2002 by the then Labour Government. These and other aspects of welfare reform have of course been debated at length in the Budget debate, as well as in departmental questions and elsewhere. The underlying issues will also be debated in the Welfare Reform and Work Bill. In a response to a request from the right hon. Member for Birkenhead (Frank Field), the Government have brought the vote on the statutory instrument measures to the Floor of the House to allow all hon. Members the opportunity to vote.

[Lady Hermon (North Down) (Ind)]

Will the Minister give way?

[Damian Hinds]

Allow me to make a wee bit of progress.

Reforming tax credits and other benefits forms the first of five pillars of the Government’s approach to supporting working Britain. The second is the increase in the personal tax allowance; the third is the national living wage, the fourth is the major extensions to child care provision; and fifth is the overall sound economic management that is delivering growth in the number and quality of jobs, earnings and living standards.

[Damian Hinds]

It is important we see these changes in the overall context. I outlined some of the additional elements that are relevant. I certainly accept that they do not all come into play at exactly the same time, but in the course of time they do and by 2017-18 eight out of 10 households will be better off.

[Lady Hermon]

I am most grateful to the Minister for allowing me to intervene at this early stage. A number of my constituents in Northern Ireland feel extremely aggrieved about the change to the income thresholds for eligibility for tax credits. Before I could support the measure, I have to urge the Minister to give some guarantees on how the Government plan to mitigate its worst effects for families throughout the United Kingdom—not just in Northern Ireland.

[Damian Hinds]

I have been talking about some of the other elements, but these are matters on which the hon. Lady has a long track record of campaigning. Northern Ireland has a particular situation with regard to welfare reform and I hope all parties will come together to get through that. Discretionary payments are designed for housing issues in particular and were increased substantially in the summer Budget. It is possible that local authorities can use some of those funds to help out people who find themselves in particular difficulty, but I am of course very happy to meet her to go through this in more detail.