Westminster Hall

Wednesday 24th April 2024 Westminster Hall

Wednesday 24 April 2024

[Christina Rees in the Chair]

Brain Injuries in Football

Wednesday 24th April 2024 Westminster Hall

11:00

[Damian Collins (Folkestone and Hythe) (Con)]

I beg to move,

That this House has considered brain injuries in football.

The fact that so many Members are present to seek to intervene or speak in this short debate shows the great interest in the topic. The subject of brain injuries in football and concussion, and brain injuries in sport as a whole, has received considerable attention in recent months, but it is an issue we have been familiar with for many years. My wife’s grandfather, George Richardson, who played professional football for Sheffield United and Hull City, died from a brain haemorrhage in 1968 aged just 56. It was widely believed in the family that it was a consequence of heading heavy footballs when playing as a striker in the football league in his youth.

In 1966, famous for the England World cup win, there was also the end of the first domestic season in which injury substitutions were allowed in English football. A report that I read in the Liverpool Echo from that year recorded that 772 injury substitutions had been made, of which more than 10% were made as a consequence of concussion or head injury. The vast majority were for leg injuries—understandable for football—but even then quite a high number of players were taken off for concussion. We can imagine the high bar there would have been at the time, given that understanding of the consequences of concussion and long-term health impacts were not as well understood.

Staying with 1966, five members of England’s World cup-winning team have subsequently died as a consequence of dementia or brain-related conditions. Recently, other well-known England and Scotland footballers, such as Jeff Astle, Gordon McQueen and Joe Kinnear, have also died from brain-related injuries. However, no longer is this just a matter of tragic stories being brought into the public domain of great loss and sympathy for the families concerned; it is now a matter of increasing scientific study, especially in Scotland, with the 2019 field study conducted by Doctor Willie Stewart of the cases of more than 7,000 former Scottish professional footballers, looking at their cause of death against a study of the general population involving 23,000 people.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

I congratulate the hon. Gentleman on securing this debate. He makes an important point about that field study in Scotland. At the time some people dismissed it, because it was only one study, but what has changed in the intervening years is that there have been studies in other European countries. I would argue that the evidence is now overwhelming. It is not just the high-profile cases that he talked about; thousands of footballers are caught up in this and are in financial difficulty. What we really need, given this understanding, based on the scientific evidence, is to have this type of injury classed as an industrial injury by the Industrial Injuries Advisory Council.

[Damian Collins]

The right hon. Gentleman makes an incredibly important point.

I will dwell briefly on the main statistical outputs of that field study, because it is the best baseline that we have in the UK. The figures are stark. The study discovered that former footballers have a fivefold increase in Alzheimer’s disease, a fourfold increase in motor neurone disease and a twofold increase in Parkinson’s disease against the base level for the general population.

Further medical studies have identified, too, the medical condition of chronic traumatic encephalopathy, or CTE, which is linked to head trauma—head injury. It can be caused by a severe blow to the head, but also within the course of playing football. It causes a release within the brain that is made worse by repetitive injury. That is why the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) has a point about classifying this as a form of industrial injury caused by the circumstances of playing football. It can have prolonged and lasting effects. Players who have received concussion injuries on several occasions may be more likely to have severe trauma later on, even if it is recognised at the time.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for bringing this subject forward. It has taken some time and I commend him for his zeal in making it happen. There have been advances and helpful discussions with the Irish Football Association. Does the hon. Member agree that the lessons learned have meant that changes must be made, including the pilot scheme that was introduced by the IFA in 2020 to allow substitutions for suspected concussion with no disadvantage to the teams? That means that players do not feel that they have to shake it off and can be medically wise. There are some things that can be done. For every debate that we bring forward, it is important to highlight the issues, but it is also important to highlight the possible solutions.

[Damian Collins]

I agree with the hon. Gentleman that concussion substitution would be a sensible measure. In Scotland, I believe there is a campaign for rugby called, “If in doubt, sit them out”, which recognises the danger of concussion injuries and allows a pause in play. Often the incentive within professional sport is to keep people playing as long as possible, and often the players want that themselves. However, there must be proper safety standards so that the right decision is made and the incident does not lead to lasting injury and trauma.

In the United States of America, the recognition of CTE as an injury caused by playing professional sport, particularly American football, is well recognised. The National Football League is providing hundreds of millions of dollars of support for players who are diagnosed as having CTE. There is recognition of the link between head injury and playing sport, and people are properly supported and compensated.

There are two challenges that we have to look at. First, how can we prevent unnecessary and lasting injury as a consequence of head and brain injuries in football and other sports? Secondly, how do we support people who, late in life, are suffering as a consequence of the injuries they sustained during their playing career? The question of compensation is one that families in particular have raised. While a £1 million fund has been created by the Premier League, administered by the Professional Football Association, the concern is that there is no guarantee beyond the first year of its operation, which we are still in, that the fund will continue—although we hope that it will. It needs to have proper resources and to be properly accessible to families.

I spoke recently to John Stiles, the son of former England footballer Nobby Stiles, who made it clear to me that in his father’s case, his care costs per year were over £100,000, and yet the cap for funding from the current fund is £60,000 a year. That would not have been enough. In that case, Nobby Stiles decided to sell his medals, including his World cup-winning medal, which helped pay for his retirement and his costs. However, not everyone is in that position. Many other footballers and their families can be in a position where they are required to sell the family home, although they were told that would not be the case when the fund was created. Some former players and their families have had to sell their homes.

[Duncan Baker (North Norfolk) (Con)]

Last week I raised on the Floor of the House the point about funding, because Chris Sutton, the former Celtic, Chelsea, Blackburn Rovers and—more importantly, being in Norfolk—Norwich City legend, is my constituent. Currently, support is in place from the PFA and the Premier League’s brain health fund, which has already paid out thousands to help families. That is positive, but a proper registered charity would be the way forward to ensure that the funding is in place. Does my hon. Friend think the Minister could help with putting the proper vehicle in place?

[Damian Collins]

I am sure that the Minister has heard the point my hon. Friend makes. I think the Minister’s convening power could be extremely helpful in this case. There needs to be a properly resourced fund that football pays into. There is enough money in football to provide compensation for players who clearly need it.

The cap on the fund means that it will not cover some care costs; it would not have done so in the case of Nobby Stiles, had it existed at that time. However, there have been other deaths of former players recently, such as Chris Nicholl, a former player for Aston Villa and Southampton, who died without his family receiving a penny of funding. Similarly, John McNamee, a former Newcastle player, died as a consequence of CTE and his family had to sell the family home to cover care costs. Real concerns are being raised by the families that, limited though these funds are, they are not universally accessible, and there is no guarantee they will exist in the future.

[Sir Gavin Williamson (South Staffordshire) (Con)]

I congratulate my hon. Friend on securing the debate. The points that have been made about the brain health fund are incredibly important. Does my hon. Friend agree that in addition to the Premier League and the Professional Footballers Association, the Football Association and the English Football League also have a part to play, and that it is by all partners and Government coming together that we can deliver much more for players today and into the future?

[Damian Collins]

I completely agree with my right hon. Friend. There has been criticism from the families about the fund. It was created voluntarily by them, but the EFL and the FA are not part of it, and they need to be. All the groups that represent professional football need to come together and provide that support fund.

I agree with the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) that we should look at classifying these as industrial injuries, but football does not need to wait for that classification; more could be done now to put those support elements in place. This is where I look to the Minister. I know that the issue has been raised with him before, and he has taken a keen interest in it. I believe the Government can play a role in bringing the parties together. There should be a recognition of the link. I know that the Department is supporting more research and convening a forum to decide where the areas of priority research should be. That will help us to understand how we can safeguard young sports players today and safeguard against brain injuries in the future.

More must be done now to recognise the existing link and accept a responsibility. There is a danger sometimes that people are concerned about legal liabilities; but we have known about this link for a while. In March 2024, Dan Roan of the BBC published a report showing that FA board minutes from 1983 recognised the concern about head and brain injuries and the causal link between those injuries and playing football, so let’s not pretend that this link was not known. Something needs to be done now.

Does the Minister think he can play a role bringing the FA and the English Football League together with the Premier League and the PFA to agree a package of financial support to make the available fund sustainable, to look at lifting the cap above £60,000 a year and to guarantee that no family will ever have to sell their home to pay for the care costs of a former footballer? Will football accept its responsibility to care for these heroes of the past, who incurred their injuries while providing entertainment and joy for millions of people and who have enriched other people who have made money out of the game?

Yesterday, on Second Reading of the Football Governance Bill, I raised the case for player welfare to be part of the remit of the regulator. I do not think the regulator’s job should be to write rules for football; it should be there to ensure that competition organisers and clubs adhere to the standards that have been set by the competitions with regard to athlete and player welfare. That would be consistent with the corporate governance responsibilities that the regulator sets. In terms of funding support for players’ care costs in later life, that could be another opportunity where the fines collected by the regulator could support both grassroots sport and legacy injuries related to football, particularly brain injuries. The fund could be used helpfully in that way. I do think there is enough money in football that primarily the professional football organisations themselves should set that standard.

Finally, as has been mentioned, the question of the rules that govern concussion and brain and head injuries in sport today is really important. I do not want to see things like heading the ball removed from football. It is a physical game and is enjoyed as such, but players should be aware of the risks they are running. There should be safety standards, such as concussion substitutions during matches or training, and ensuring that people sit out when they have had a head injury and are given a proper amount of time to recover. There should also be consideration as to whether unnecessary repetitive exercises in training that include heading the ball are really necessary if they cause damage. These things need to be properly understood. In some cases, more research may be needed. We should look at this on an ongoing basis.

As a starting point, let us recognise the link that exists and the genuine need of support that some former players and their families have now. Football already respects the fact that the connection does exist, but we need a proper agreement to resource this and make sure that the support is there and the fund continues. I ask the Minister, as the Football Governance Bill passes through the House, to consider the role that the regulator can play in ensuring that the welfare and safety standards we should expect from clubs and competition organisers are actually followed through.

11:14

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

It is a pleasure to serve under your chairmanship, Ms Rees. I thank my hon. Friend the Member for Folkestone and Hythe (Damian Collins) for securing this important debate. I am under no illusions about the significant interest in the issue among right hon. and hon. Members. The fact that so many colleagues are here for a half-hour debate proves that point.

Brain injury in football is an important issue that touches many people’s hearts. Last September’s Backbench Business debate on the links between football and neurodegenerative disease demonstrated the wide cross-party support and depth of feeling about this vital issue in the House and in wider society. That has been reflected in the many personal stories of constituents that hon. Members have raised.

[Ian Blackford]

I am grateful to the right hon. Gentleman for referring to the debate that we had on 14 September. As he rightly says, it was a cross-party debate; I led it with the hon. Members for Moray (Douglas Ross) and for Easington (Grahame Morris). I was very encouraged by the response from the Government Front Bench at that point. Subsequently, on behalf of the three of us, I had discussions with the Industrial Injuries Advisory Council.

There is a recognition of the wealth of evidence that exists, but we now need some help from a Government Minister to get to the next level. The previous Minister for Disabled People, Health and Work—the hon. Member for Corby (Tom Pursglove), who has now moved on—had indicated that he would have a meeting with the three of us. I have been trying to push the replacement Minister by letter: I wrote to her on 18 January and on 13 March. Will the right hon. Gentleman assist us in getting that meeting for the benefit of everyone engaged in that debate and this one, so that we can do the right thing and ensure that more people like John McNamee—a Hibs legend as well as a Newcastle one—do not face the same financial injustice?

[Stuart Andrew]

It was certainly a pleasure to respond to that debate, and I made a commitment to write to the Department, which I did. I was due to meet the Minister for Disabled People yesterday, but I had to spend all day in the Chamber for the Second Reading of the Football Governance Bill. That meeting will be rearranged, and I will be sure to raise the right hon. Gentleman’s request. I will come on to his point about industrial injuries shortly.

The safety, wellbeing and welfare of everyone who takes part in sport is paramount. I also know how important football clubs and players are to all our local communities. The recent examples of dementia-related deaths of former footballers are of great concern to Members across the House and to me as the Minister for sport. It is important to acknowledge that the vast majority of people play sport safely, but head injuries in sport do occur.

Player safety must be a major focus for sport, as we recently highlighted in our Government sport strategy, “Get Active”. More work is still needed to ensure that robust measures are in place to reduce that risk and improve the diagnosis and management of sport-related head injuries at all levels of sport. That should apply during not just matches but training, and there should be provision for both professional and amateur players, as hon. Members have mentioned.

The national governing bodies are rightly responsible for the regulation of their sport and for ensuring that appropriate measures are in place to protect participants from serious injuries. I am pleased to say that positive progress has been made across different sports in recent years. For example, home nation football associations have changed their guidelines to prevent under-11s from heading footballs during training in England, Scotland and Northern Ireland, and the FA is co-funding research with the Professional Footballers’ Association to build the evidence base relating to brain injuries in football. It is not just national governing bodies contributing to improvements in player safety; players’ associations such as the PFA also play a valuable role in supporting professional players and providing short and long-term support to those affected by sporting injuries.

[Damian Collins]

The Minister mentions that further work is being done by the FA, but is there any doubt in his mind or the Government’s about the link between brain injury and sporting injury?

[Stuart Andrew]

I will come on in a minute to research and to some of the things I want to take from the debate.

Hon. Members have mentioned the brain health team and the range of support for former players and their families, which of course includes assistance with claiming state support and benefits. I have discussed the work on player welfare with the PFA’s chief executive, including the football brain health fund for players affected by dementia, which was established last year with the aim of providing financial support for players. An initial amount of £1 million has been made available to provide discretionary financial support, as assessed by an independent panel, to improve quality of life.

I welcome the creation of the fund, the first of its kind in English football. I hope that it will provide support to those former players who need it most. The PFA has confirmed that further investment will be forthcoming, but I will seek further reassurances for that fund. I acknowledge that there is some scepticism from former footballers who have contacted me to express doubts about the fund’s effectiveness.

[Sir Gavin Williamson]

Will my right hon. Friend also make representations to the FA and the EFL about the work being done on the brain health fund? On temporary concussion substitutions, the decision will be made not by the FA or the Scottish Football Association, but by the International Football Association Board, of which the largest component is FIFA. Will the Minister use his office and his position to make representations to FIFA and the International Football Association Board so that the voice of home associations is properly heard and action is taken to introduce temporary concussion substitutions?

[Stuart Andrew]

I thank my right hon. Friend for his intervention. I have had letters from former footballers expressing concern about the fund, and I wrote just yesterday to the PFA to seek assurances that the fund is working. I recognise that there is wider work to be done, and I will be more than happy to convene a meeting or roundtable with all the interested bodies and reflect the comments that right hon. and hon. Members have made today. I will, of course, include FIFA.

[Damian Collins]

I am very glad to hear that. At that roundtable or a subsequent one, will the Minister also meet the families who are raising concerns about the practical operation of the funds and the difficulty of accessing them?

[Stuart Andrew]

I would be more than happy to do so. In fact, I suggest that it is probably sensible to do so before we do the roundtable, so that I can reflect what I hear from the families.

There has been some discussion of the industrial injuries disablement benefit. The Department for Work and Pensions provides specific support for that benefit and the Industrial Injuries Advisory Council is the independent scientific body that will make recommendations. I know that many Members feel strongly that the council should explore professional footballers’ access to the benefit. My understanding is that the council is currently considering any connection between neurodegenerative diseases such as dementia and the possible effects of repeated head injuries sustained during a career as a professional sportsperson. It needs to give further consideration to the evidence before it can make a decision and will publish its findings when the investigation is complete. It would be premature for me to speculate on how that will progress, but I will definitely raise the matter with the disability Minister.

[Ian Blackford]

I am grateful for the Minister’s remarks, because many of us feel that the research is now overwhelming. The role that we can play on a cross-party basis, with his assistance, is to demonstrate to the advisory council that an early determination would be welcome, particularly in the light of the hardship that so many footballers experience as they struggle with the impact of brain injury. We cannot allow this to be dragged out ad nauseam. We need to get to a conclusion and make sure that footballers get the help they deserve.

[Stuart Andrew]

I will try to reflect the right hon. Gentleman’s comments as accurately as possible at my meeting with the disability Minister.

It is important to highlight that the Government are leading work on brain injuries in sport, and specifically on concussion. As part of that, my Department has worked with interested parties to develop the first ever single set of shared concussion guidelines for grassroots sports across the UK. The guidelines, which were published last April, were developed by a panel of UK and international experts in the field of sport-related concussion. They build on the world-leading work in Scotland that hon. Members have mentioned.

We are grateful for the support of Scottish, Welsh and Northern Irish colleagues in expanding the remit of the new guidelines to cover the whole UK and their full use for everyone involved in grassroots sport, from school age upwards: participants, coaches, volunteers and parents, as well as those working in education settings and healthcare professions. Through the guidelines, we want to encourage more people to enjoy the benefits of being active and playing sport. We hope that they will be a useful tool in reducing the risks associated with concussion. At all levels of sport, if someone is suspected of having concussion on the field of play, the overarching message, as my hon. Friend the Member for Folkestone and Hythe said, is “If in doubt, sit them out.”

Evidence-based research is an important component of ensuring that sport is made as safe as possible. My Department has therefore established a research forum to look at concussion in sport. That group brings together key academic experts with experience in traumatic brain injury, neurology and concussion to identify the priority research questions around sports concussion that still need to be addressed for the sporting sector. It is now formulating a report to identify the priority research questions, which is expected to be completed this year. Alongside that, our Department has established an advisory panel with the aim of identifying tech innovations that can help with concussion in sport.

Separately, the Department of Health and Social Care is formulating the Government’s new strategy on acquired brain injury, including dementia. Our Department is feeding into that process to ensure that those who play sport are represented in the gathering of evidence. We remain committed to working with the sector to make sport safe and enjoyable for everyone, including through technological solutions and the prevention of concussion.

[Damian Collins]

I thank the Minister for giving way one last time. Alongside the establishment of new guidelines based on research, which everyone welcomes, is the question of enforceability. There is a sad history in sport of anti-doping regulations and other welfare standards not being enforced properly because there is no external validation. Policies are often executed within team and club environments by the coaches and the medical staff who report to them, with no external supervision. Having an external actor to check that the right things are being done will be important to making the new guidelines effective.

[Stuart Andrew]

I heard my hon. Friend’s comments very clearly yesterday. The regulator we have established for football has a very tight scope—we needed to do that—but my hon. Friend raises some interesting points that I will take away and consider. I will certainly make the point, when we convene the roundtable with all the interested parties, that further work is needed in this area. Much good work is going on across Government, but I recognise that we need to do more.

I understand the strength of feeling about the issue and its effects on those who suffer from this terrible illness and on their families. We will continue to work with the sports sector, including the football authorities, to ensure that player safety is prioritised so that everyone can take part in sport safely. I thank my hon. Friend again for securing this debate, and I thank everyone present for their thoughtful contributions and their interest in the area. Once I have had the roundtable, I will be happy to update hon. Members on the outcomes of the discussion.

Question put and agreed to.

11:29

Sitting suspended.

Football Index Collapse: Lessons Learned

Wednesday 24th April 2024 Westminster Hall

[Mrs Sheryll Murray in the Chair]

14:30

[Liz Twist (Blaydon) (Lab)]

I beg to move,

That this House has considered the lessons learned from the collapse of Football Index.

It is a pleasure to serve with you as Chair, Mrs Murray. This debate is about the lessons to be learned from the collapse of Football Index. I had a debate on Football Index in June 2022, but I am here again because I was alarmed to read reports in The Times and The Guardian just a few weeks ago about a new platform, KiX, which uses Football Index as a proof of concept and involves some of the people previously involved in Football Index. I do not want my constituents to be caught up in a scheme that replicates the problems of Football Index, so we need to learn the lessons.

The collapse of the supposed betting platform Football Index was mired in controversy, as the site proved to be incorrectly regulated for the majority of its lifetime. Those regulatory failures affected tens of thousands of people across the UK, many of whom lost substantial amounts of money. I am sure most Members in Westminster Hall today and across the House have received emails from constituents who lost life savings, struggled with their mental health and dealt with putting their lives back together after that failure.

Let me give a quick recap. The Sheehan report, which the Government commissioned, was damning in its verdict that there were regulatory failures from both the Gambling Commission and the Financial Conduct Authority in their work to protect customers from Football Index. According to the report, the failures go back to the beginnings of the platform. The Gambling Commission was made aware of the “go to market” function back in April 2015, but did not note that feature during the licensing process. It did not consider other aspects of the platform’s similarity to a stock market at the licensing stage, and the platform’s terms and conditions were not subjected to detailed scrutiny prior to 2019. The report states that at that point the Gambling Commission became aware of the full nature of the product, but it did not suspend the platform’s licence for another two years. That is crucial, because if the platform been taken down in 2019, it could have saved some customers huge amounts of money. The report also noted that, during that time, the Financial Conduct Authority expressed inconsistent views about whether the platform fell under its remit, and was driven by resource prioritisation, rather than by its legal responsibility to protect consumers.

Those failures cost victims dearly. Many lost their homes, their life savings or their wedding funds, causing them huge amounts of stress, anxiety and depression, not to mention financial difficulties for some. My constituent Collin spent months unable to work as a result of the stress. He told me:

“I feel a massive sense of guilt and anger that a huge amount of my family savings has been stolen. That money could have been used for my children’s future, house improvements, holidays and other investments.”

Many victims are reluctant to come forward due to the shame that they feel after being misled in such a way. That has not been helped by the language of the Government, who referred to support for “problem gamblers” in their response to the dormant assets consultation last year. To be clear, no one should have to feel shame if they are struggling with gambling addition, but that framing negates the fact that the product’s promoters branded it as an investment product.

None of the victims walked into a bookie’s and put £3,000 on an accumulator or a race. They were misled and instead believed themselves to be investors. They were misled and instead believed themselves to be investors taking risks, hedging funds and building a portfolio—something that would be normal for those who engage in the stock market. To suggest otherwise is to let the platform and the regulators off the hook.

There are unanswered questions. Since my debate in June 2022, there have been three different Prime Ministers, four Secretaries of State for Digital, Culture, Media and Sport, and four Ministers responsible for gambling, but as of yet, no one has been able to make much progress on this vital issue. In that time, I have heard countless more stories of the hardships suffered by victims as a direct result of these regulatory failings. Together, their financial losses amounted to as much as £124 million. They are desperately waiting for action and dealing with uncertainty. They fear that they may never see justice, and that they may never be compensated.

I pay tribute to the journalists who have been fighting to keep this issue in the public domain. Joey D’Urso at The Times, Ellie Pitt at ITV and Greg Wood at The Guardian have all helped to tell the story of the victims and have given them a voice. I encourage the Minister and those present to attend the all-party parliamentary group hearing on 30 April, so that they too can hear at first hand from those affected.

It is important that we keep the focus on this because so many questions remain. Although the Sheehan report was fundamental to exposing some of the regulatory failures, the text itself references the significant time constraints under which it was produced and the fact that it therefore could not take in the full amount of evidence that has since come to light. Some of the victims have lost everything, and they deserve to have their voices heard.

Having secured a meeting with the Minister back in 2022, the Football Index group has continued to gather and develop evidence that strengthens its case. However, I have met the group, and the Government have not accepted a submission from it. I am grateful to the current Minister for meeting representatives of the group, but after three long years, they deserve more—they deserve action.

There are ongoing concerns related to what the regulators knew and when, and whether there were additional opportunities to prevent the eventual outcome that were missed. It is my understanding that the current Minister was sufficiently concerned by what he heard to consider an independent review of the evidence by someone external to the Department and the Gambling Commission. No doubt the Minister will tell us himself exactly what he has been doing, but the action group are still waiting for progress on this issue. If we are to learn lessons from the collapse of Football Index, there must be proper, independent scrutiny of all the available evidence. I hope that the Minister will commit to that during this debate.

Turning to novel products, a process of examining what went wrong with Football Index is vital, so that we can protect people from such harm in the future. Unfortunately, recent developments have made this matter all the more urgent. As I said at the start of this debate, in a recent article in The Times it was revealed that the co-founder of the Football Index platform is working with others to create a new trading platform, citing Football Index as proof of concept. This is deeply worrying. I can only imagine the frustration and anger that victims must feel upon hearing this news; they will be concerned that others might be let down in the way that they were.

The new platform, KiX, will be a football cryptocurrency trading project that makes use of non-fungible tokens and cryptocurrency. Ministers have previously said that the Gambling Commission has strengthened its approach to novel products, and I understand that the commission is currently reviewing elements of the KiX product. However, the commission has also said that the product may lie outside the scope of regulation, given the involvement of NFTs and crypto.

On 23 April, the Government set out plans to overhaul gambling and admitted that Football Index blurred the boundaries between gambling and investing. If Football Index blurred the lines, KiX is seemingly crossing over them altogether to create a similar product in an unregulated market. Having seen the impact on Football Index victims, how could we possibly permit another product that preys on football fans by persuading them to part with hard-earned income and invest in their knowledge of football?

[Mr Gregory Campbell (East Londonderry) (DUP)]

I thank the hon. Member for giving way and congratulate her on securing the debate. She talked about susceptible fans sometimes being preyed on when it comes to gambling. Does she agree that one of the big emerging problems in the past few years has been the virtual epidemic of gambling companies sponsoring almost every single Premier League team, to the extent that young people think of and see their heroes as being part of the gambling industry, which is compounding the problems that she is rightly analysing today?

[Liz Twist]

I thank the hon. Member for his intervention. Of course, we could have a whole different debate on the influence of the gambling industry on football—indeed, I am sure that in future months we will have such a debate. But today that link between gambling and clubs and their players, with or without their consent, is being used to attract people to gamble money.

As I was saying, I fear that the product that I am talking about today—KiX—is dangerous and has the potential to bring misery to more people. I therefore urge the Minister to do everything he can to ensure that this platform does not launch without the utmost regulations being in place. To put it simply, that is the very least that the victims of Football Index deserve and we do not want to see more victims being created through new platforms.

I also bring to the Minister’s attention another company—StocksFC. I am told that it has been operating in the crypto space for about a year. Alarmingly, a quick glance at its website and at the Twitter account of its head of marketing shows the dangers of this type of platform. It is clearly masquerading as a stock market and is manipulative in its language, suggesting to people that they are “investing” and sharing the totals of profits made on their supposed investment.

I will add that despite this platform allegedly being a crypto-based platform, there are no entries about it on the blockchain and users in the UK can deposit money straight into its system from their debit cards. I am sure that the Minister will agree that that is deeply concerning and a danger to consumers. Does he know whether the Gambling Commission is aware of this operator and if so, what discussions has he had with the commission to ensure that consumers are being sufficiently protected?

Many victims of the original Football Index collapse are vulnerable and eager to recoup their losses through any means, and I fear that new platforms could prey on their vulnerability. I hope that the Minister will raise these concerns with the Financial Conduct Authority, and that the FCA and the Gambling Commission will work in partnership to ensure that nobody is left victim to an unregulated football stock exchange ever again, consulting with the Football Index action group to learn from the real-life examples that it can provide.

The evidence regarding the regulatory failures that led to the collapse of Football Index is highly compelling. It serves as a reminder that we cannot let anything like that collapse happen again. Meanwhile, victims have long-standing grievances that are yet to be resolved.

People from across the country will now be willing the Government to respond to the new platform of KiX in a serious manner and to review, in full, the evidence that the Football Index action group has sourced and put together. I hope that the Minister will listen to calls from the victims, because that is quite simply the least that they deserve.

Finally, I would welcome any update that the Minister can provide on this subject. At the heart of this scandal is injustice. We need to develop a plan that seeks to compensate victims of the Football Index collapse effectively while working to ensure that any future football platforms, such as KiX, cannot be launched without learning considerably from the lessons of the Football Index scandal.

[Mrs Sheryll Murray (in the Chair)]

I remind Members that they should bob if they wish to be called in the debate.

14:39

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mrs Murray. I thank my hon. Friend the Member for Blaydon (Liz Twist) for securing the debate and for the work she has done over a number of years to highlight this issue, as well as other existing or future problems that need to be tackled.

We know that Football Index has been described as

“the biggest scandal in British gambling history”,

with thousands of customers suffering cumulative losses of up to £134 million. It is a scandal and a failure. I am sorry to say that we are all getting rather too used to saying in this place that, once again, people have been let down. Whether it the sub-postmasters, the Women Against State Pension Inequality Campaign, the leasehold scandal, infected blood, the loan charge, mortgage prisoners, Equitable Life or the myriad other investment scandals that have seen people’s life savings stolen, too often in this place we end up saying that what happened was totally wrong and should not be allowed to happen again. But yet again that is where we find ourselves today.

It is little wonder that public faith in our elected representatives continues to erode when Parliament seems to be incapable of learning from past mistakes. Whether it is regulatory failures, loopholes or bad actors, this place seems unable to stop them. Consumer protection and other basic safeguards for our citizens seem to have gone missing in action. We are failing in our basic duties; light-touch regulation has clearly had its day. We know the terrible stories of those affected by Football Index—losses into seven figures, individuals driven to the brink of suicide, marriages collapsed, families torn apart and life savings vanished—and those impacts have been part of all the other scandals I mentioned. Too many people in this country have suffered grave injustices that we seem incapable of putting right.

Football Index has been described as a Ponzi scheme. As we have heard, its executives were warned soon after its launch—in fact, as early as 2016—that their so-called football stock market would prove unsustainable. All the warnings came some five years before its eventual collapse, leaving serious questions about how effective regulation was. According to newspaper reports, the Gambling Commission was warned in January 2020 that Football Index was

“an exceptionally dangerous pyramid scheme under the guise of a football stock market”.

We all know that that warning proved to be correct.

Perhaps it was the unusual nature of the product that meant it carried on without effective intervention. However, I have looked at Trustpilot reviews for many of the major online gambling companies, and there are a litany of tales about frozen accounts, withheld funds and appalling customer service. It seems that even the more straightforward gambling propositions are able to get away with far too much, so it should be little surprise when an unusual scheme, which was unsustainable by design, also escapes attention.

The FCA took its time to get involved, and was also indecisive, changing its view twice as to whether Football Index fell within its regulatory remit. On two separate occasions, in September 2019 and September 2020, when it did indicate that Football Index fell within its remit, the FCA did not follow up with adequate action, and the product continued to be unregulated.

Those who used Football index talked about it being advertised as an investment product, with only a very small note squirrelled away on its website saying that it was a betting scheme, which is what it really was. FCA regulation allows for redress for losses through the Financial Services Compensation Scheme, but because Football Index was considered gambling—although not overtly advertised as such—the failure to regulate it meant that the losses were allowed to continue to stack up.

The Gambling Commission has now updated its framework on how it assesses risks, so that the novelty of the product is fully considered. Licences will not normally be issued if the product’s name contains language associated with financial products. The FCA now has, I understand, an executive director to oversee its relationship with the Gambling Commission where products appear to cross boundaries. However, despite those actions, the reality is that nobody has been held to account.

Even those originally involved in the company have got away with it. The Insolvency Service, which I wrote to, decided there was insufficient evidence to justify directors disqualification proceedings. The people who created Football Index in the first place are allowed to carry on with impunity. That is wrong, because they knew it was unsustainable and they were warned about that from the very start, but they carried on anyway.

That leads us on to KiX, which my hon. Friend the Member for Blaydon mentioned. The KiX website says:

“Digital Athlete Tokens (DATs)…represent the on-pitch performance of individual footballers…and are deployed as smart contracts on the blockchain”.

It says that the owner of a digital athlete token becomes

“eligible for twice weekly winnings.”

I do not really know what that means, but it has a familiar ring to it—as we have heard, some of the people behind Football Index are part of KiX. That quote about digital athlete tokens means it is as clear as mud to me whether this should be regulated by the FCA or the Gambling Commission—perhaps it is neither. KiX is apparently a “decentralised autonomous organisation” and apparently has a

“decentralised, egalitarian and democratised blockchain ethos.”

If that word salad is not enough to put you off investing, I hope that someone, somewhere, who actually understands what that means is going to take responsibility for regulating this.

We have let people down, and these products need proper regulating and policing. We really do not want to end up here again in another few years, bemoaning our lack of action. I have had too many constituents ripped off by one investment scheme or another, and the lack of accountability, justice and—I am sorry to say—interest from those whose job it is to ensure that there is justice says to me that we are letting people down on a systemic basis. We have to do much better than we are at the moment.

14:51

[Barbara Keeley (Worsley and Eccles South) (Lab)]

It is a pleasure to speak in the debate with you in the Chair, Mrs Murray. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on leading the debate and on her excellent work on this issue. I have two constituents who were affected by the collapse of Football Index in 2021. One told me he had lost £20,000 as a result. He said:

“I am a father and soon-to-be husband whose family has been swindled by the stress, guilt and shame which this has brought me in such an important part of mine and my family’s life. This has put me in some very dark places and I have had thoughts and stress like I’ve never experienced before.”

Failings by a number of organisations led to this impact on customers, which was highlighted in the Government’s independent report into the regulation of Football Index, led by Malcolm Sheehan KC. First, the report found that BetIndex Ltd, which traded as Football Index, did not properly notify the Gambling Commission of the nature of its product in its licence application, and nor did it inform the commission of changes to its product as it should have done.

Secondly, the report found that the Gambling Commission could have responded better, including through better scrutiny of the product offered by BetIndex in 2015, better monitoring of the development of the product, and quicker decision making once it identified in 2019 that BetIndex appeared to be operating outside the scope of its licence. Indeed, as my hon. Friend the Member for Blaydon said earlier, if the platform had been taken down in 2019, that would have saved money being lost by a number of the victims. Thirdly, the report identified areas of improvement for the Financial Conduct Authority, including its speed of response to requests from the Gambling Commission and the consistency of messaging on its regulatory responsibilities.

It is welcome that the Government have committed to implementing the review’s recommendations and that, in September 2021, the Gambling Commission and the Financial Conduct Authority agreed an amended memorandum of understanding, including on response timetables and the process for escalation of unresolved issues. However, I understand that people such as my constituents, and so many others, still feel very upset and angry at the loss of capital as a result of the collapse of Football Index.

Some believe that there were further failings by the regulatory bodies that were not identified in that independent review. In particular, people feel misled about the nature of the product they were using. One constituent told me about

“the magnitude of the deception that took place by the Football Index, which positioned and promoted itself as a safe investment with ‘guaranteed yields’.”

They also said:

“This attracted a significant number of users who were wholly misled as to the nature of the Football Index product and the degree of safeguards pertaining to its regulation.”

There is a need to improve financial literacy to help counteract financial products that are purposely misleading and confusing, and aimed at exploiting customers for greater profit. Unless lessons are learned from the collapse of Football Index, there exists a risk that a similar situation could emerge through new platforms.

Like my hon. Friend the Member for Blaydon and others present, I am particularly concerned by reports about the new trading platform KiX, which is using Football Index as a proof of concept. The Times has reported that KiX is being advised by the co-founder and chief executive of Football Index, Adam Cole. As we have heard, users of KiX will be able to trade footballers using non-fungible tokens, but because KiX is a decentralised, autonomous organisation underpinned by the blockchain technology used by cryptocurrencies, it is not currently regulated. Its website says that KiX is beginning with football but may expand into other sports if successful. Campaigner David Hammel has called the development of KiX

“a real kick in the teeth”

for all those affected by the collapse of Football Index. I would be interested to hear from the Minister whether the Government have had discussions with regulators about how to protect people from the risks of this latest scheme.

Returning to the issues caused by the collapse of Football Index, it is important that the Government fulfil their intention in the gambling White Paper to protect vulnerable people from gambling harms and financial detriment. This situation should never have been allowed to occur and it must never be repeated, and I look forward to the Minister reassuring us on behalf of our constituents that it will not be.

14:55

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Blaydon (Liz Twist) on bringing the debate forward. She will recall leading a debate on a similar subject here a couple of years ago, and I was very fortunate and pleased to support her, just as I regularly support other Members in Westminster Hall, which is always a pleasure, by the way, because the issues are really important. The hon. Lady is right about this issue: it is important—it is important because some of my constituents have found themselves in this terrible malaise, having lost money, so it is good to return to it.

If the Minister does not mind me saying, I am very pleased to see him in his place, as he always tries to answer constructively the questions and queries we pose to him. I was remarking to him earlier that he performed really well in the debate on the Football Governance Bill last night in the main Chamber, where his final comment referenced, “They think it’s all over! It is now!” I am old enough to remember that saying in 1966. I know that the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), is far too young to remember that, but a whole lot of others here are not—I better be careful not to say too much now, or I will be reprimanded.

I took part in the last debate on the impact that Football Index has had on all our constituents, including mine—I will not mention their names, but I will refer to them. It is really good to be back here to discuss what lessons we have learned and what has changed. That was the question posed by the hon. Member for Blaydon: what has changed? Hopefully, the Minister can reassure us in his response.

The collapse of Football Index was detrimental to so many people, and some were undoubtedly financially ruined—I know someone who sadly was, although I am not able to put their name on record, but I have seen the detrimental effects. The situation has also highlighted the importance of being gambling aware. It is important that we get it right this time and the next time round. I was hoping that the hon. Member for Swansea East (Carolyn Harris) would be here, because she has been such a stalwart at the forefront of gambling issues. I admire her greatly, and she has taken up the subject in this House with real enthusiasm in order to make changes.

What is our football knowledge really worth? In football’s first stock market, people had fantastic prospects of making money based on how well they knew football. I know a whole lot about Leicester City, having been a loyal supporter since 1969, when I was a wee boy at school. That was not yesterday, by the way—it ages me greatly when people do the figures. The point I am making is that, although I do not know all about football, I love it. Most people here in this debate probably love football, but they may not know all the ins and outs of the subject matter before them.

The financial losses from this collapse have been absolutely devastating. I have read some absolute horror stories from people in my constituency and further afield. Some have lost hundreds of thousands of pounds that were invested in open bets on football players and their performance. It is also my understanding that the company folded with £124.5 million in remaining open bets—wow! Isn’t that truly extortionate? It shows the magnitude of what we have before us today and why this debate is so important.

Some 67% of people in Northern Ireland have been said to gamble, and they cover a range of ages, sports and other means. My hon. Friend the Member for East Londonderry (Mr Campbell) referred to all the other sports and the implications for them as well. Individuals must be aware of their gambling habits and the potential dangers that come along with gambling. Reports have suggested necessary recommendations for any similar scheme in future.

One point that we must get right is ensuring that any gambling company offering long-term bets will be able to cover payments to customers. That is to be covered by the Government’s forthcoming gambling White Paper. I look forward to hearing what the Minister has to say about the White Paper and how it will address some of the issues we have before us today. If it does not—with respect, Minister—we will need to see how it can be strengthened and enforced.

Others will make contributions. I am not sure whether the hon. Member for Inverclyde (Ronnie Cowan) is going to speak, but he has great knowledge of this subject. I hope he will intervene at some stage to give us some of his wisdom on the matter. I mean that honestly because he has a particular grasp of the situation.

[Ronnie Cowan (Inverclyde) (SNP)]

The issue is that when it comes to gambling products, we understand that there are rules and regulations in place. They are not to my liking, but they are there. This scheme and the successor schemes are designed to work in the grey areas—the dark shadows—of gambling. The Financial Conduct Authority did not even know whether it was responsible for them.

Hopefully, down the line somebody will be able to hold these companies to account. Their will is not to create an exciting thing for football fans to get more involved with and enjoy a game of football; their will is to take money out of people’s pockets. We know plenty of gambling products that are already doing that. I am not sure there is much in the White Paper at all that touches on FI. There has to be something that ensures the regulations are clear and understandable. It must also stop KiX: if KiX is up and running, plenty of other organisations behind it will be waiting to do exactly the same thing, and all they will do is extract money from punters’ pockets.

[Jim Shannon]

I thank the hon. Gentleman for that intervention. He has posed a few questions that are pertinent to the debate. I look forward to the contributions from the SNP spokesperson, the hon. Member for North Ayrshire and Arran (Patricia Gibson), and the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), and the questions they will pose in turn to the Minister.

We need to see a sea change that does away with the grey areas that the hon. Member for Inverclyde referred to and the uncertainty, where people can get sucked into the process. Ensuring that customers can get their money back is of major importance. Early day motion 697 was tabled on 25 November 2021. I am pretty sure the hon. Member for Blaydon was instrumental in tabling the EDM and ensuring that others signed it. I signed the EDM to show support and to urge the Government to do more to ensure that those owed money receive a full reimbursement.

As I have stated before, gambling is a personal choice. I am not here to tell anybody what they should or should not do; I will always try to give people choice if I can. At the same time, sometimes Government have to encourage people to be more aware of what the choices are. As the hon. Member for Inverclyde said, there are clearly occasions when that does not happen, and that is why it is important to have a system in place. While gambling is a personal choice, we hope that those choosing to do so are educated about the potential risks. The losses can be huge. I read one story—I thought about it long and hard—about a young man, probably in his early 20s, who lost £165,000: my goodness! He lost what he did not have. He found himself in all sorts of problems, and he stated that it completely turned his life upside down. How could it not, given that he lost that amount of money at an early stage in life?

Many have openly referred to the shame they feel and how such things have affected how they look at gambling. There is absolutely no doubt that the Financial Conduct Authority should have regulated Football Index, and there are still questions to be answered. I know this may not be the Minister’s responsibility, but I would really like to know what discussions have taken place with the Financial Conduct Authority and what it is doing to regulate the situation. There are still questions to be answered.

Although it is argued that FI was seen as an investment, not gambling, its business model still relied on money from constituents and it was undoubtedly fundamentally flawed, as some of my constituents are able to confirm. Many people state that they feel let down by the regulators and that more should have been done to ensure the system was working correctly.

I will conclude because I am conscious that others want to speak. I look forward to hearing from the two shadow spokespeople, the hon. Members for Barnsley East and for North Ayrshire and Arran, and the Minister. Consumer protection must be at the heart of the lessons learned. The FCA’s consistent view has been that all the products fell within its regulatory perimeter up until the collapse in March ’21. Evidentially, that is no longer the case, and therefore we need a legislative change and reassurance.

Legislatively, it is always better to put these things in black and white. I hope action is taken to support those who suffered losses as a result of the collapse. I urge the Minister and our Government to ensure that victims do not wait years for reimbursement. That would be unfair, and we have a chance today to urge the Minister to grasp that. I commend the hon. Member for Blaydon for bringing forward this issue; there is no one in the Chamber who does not think she has done exceptionally well.

15:06

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

It is a pleasure to serve under your chairpersonship, Mrs Murray. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing this debate on such an important issue, which has caused a great deal of suffering for thousands of people.

Several years ago, I met a group of parents outside Hillsborough stadium whose loved ones had tragically taken their own lives after struggling with gambling addiction. The victims were mainly in their 20s and 30s. The parents were taking part in the Big Step, and were walking between five Yorkshire football grounds to call for an end to gambling advertising and sponsorship in football. Thirty-five clubs across the UK have signed the Big Step’s pledge to eliminate gambling advertisements in football, and Premier League teams have agreed not to take front-of-shirt sponsorship deals from gambling firms from 2026. However, that leaves us in the nonsensical situation whereby we recognise the dangers posed by gambling sponsorships but are happy to relegate them to the sleeves of football kits and advertising hoardings around stadiums, despite research showing that only 5% of gambling logos showed during live Premier League football matches would be affected by the front-of-shirt ban—in my opinion, that is 5% too many.

We need to do far more to combat the blight of gambling sponsorship in sport. I remain disappointed that the Government’s White Paper on gambling reform, which required the introduction of a cross-sport gambling sponsorship code of conduct, has been continually delayed. Will the Minister tell us when that code of conduct will be introduced? Will he investigate KiX, which is now operating instead of FI?

Sadly, any changes to legislation on football sponsorship are too late for the users of Football Index. Prior to its collapse, Football Index sponsored the shirts of three English Football League teams. Those sponsorship deals helped to convey an aura of trust and respectability that may not otherwise have existed, furthering the dupe that it was an investment platform. Football Index was more than happy to play into that misconception. Internal company documents reveal that Neil Kelly, the director of BetIndex—the Jersey-based company that ran Football Index—said:

“the Football Index platform functions somewhat similarly to a stock market, hence for marketing purposes it is sometimes referred to as the football stock market and when the Company uses this term, it is deliberately misspelled as the football ‘stockmarket’.”

As one of the previous speakers said, that is working in the dark shadows of the law. It is completely unacceptable, and I really hope that the Minister will put it right. The deliberate misspelling may have reassured directors that they were not operating a stock market, but that distinction was less than apparent to their customers. The Guardian reported:

“The only hint on its website that it was actually a betting site was an easy-to-miss strapline, which was added several years into its existence at the insistence of the Advertising Standards Authority.”

The authority had previously complained that the language used by Football Index was

“synonymous with the language used to describe conventional stock markets and investment products.”



The Gambling Commission has been made aware of the concerns, having been warned in January 2020 that tens of thousands of users were being

“misled into believing they are investing rather than gambling, with little or no consideration that all of their money is at risk”,

and that the platform was little more than an “exceptionally dangerous pyramid scheme” in a formal submission by industry experts. However, the platform’s misleading nature meant that there was a reluctance from both the Gambling Commission and the FCA to take ultimate responsibility for regulating the product, to the detriment of the thousands of Football Index’s victims.

Let us not forget that consumers have rights, including a right to redress if their product is mis-sold. Customers in a regulated industry such as gambling have the right to expect that the regulations will be adequate, appropriate and diligent. The users of Football Index have been wronged. The regulatory failings have cost thousands of people dearly, and they deserve compensation for their losses. However, beyond that, we need real systematic change. Football is watched by millions of young people every week, yet they are still subjected to constant gambling advertisements. I fear that without urgent reform, more consumers will fall prey to similar products that intentionally blur the lines between gambling and investing. Will the Minister commit to helping ensure that the gambling sponsorship code of conduct is introduced as soon as possible?

15:11

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I am pleased to participate in this debate. Like others who have spoken before me, I congratulate the hon. Member for Blaydon (Liz Twist) on bringing it forward. It is important that we learn lessons and remember the mistakes made during the collapse of the online gambling product, Football Index. I also pay tribute to my hon. Friend the Member for Inverclyde (Ronnie Cowan), who has done a huge amount of work on this issue and in the wider gambling context generally.

I remember well when Football Index collapsed in 2021. I remember a number of constituents contacting me in despair, some having lost significant sums of money in what they believed was an investment because it had been marketed as such. It was deliberately marketed to look like a football stock market where customers could invest in players, collect dividends based on performance and sell their shares in a player at a profit if they did well. However, when operations were suspended, customers lost more than £90 million in open bets, or in other words, investments in players.

What became clear is that Football Index was akin to a pyramid scheme, operating unsustainably until its collapse by paying customers dividends using new customers’ investments. That collapse represents the biggest collapse of a gambling product in the UK. However, relatively speaking, it has not attracted the attention that it ought to have done. We know that the Gambling Commission had been warned some 14 months prior to the collapse that the platform was an

“exceptionally dangerous pyramid scheme under the guise of a ‘football stock market’”.

Its business model was fundamentally flawed and spiralled out of control.

As we have heard, the issue is that many of those using the platform were not fully cognisant of the fact that they were gambling, participating in a pyramid scheme dressed up as something quite different. If somebody does not know that they are gambling, they surely cannot be fully aware of the risk to which their money is exposed. The reality is that Football Index’s deliberate imitation of an investment product led to

“unparalleled levels of irresponsible gambling”

from thousands of users who were misled into believing that they were not gambling but investing, and obviously had no idea of the risks to which they were exposed. There is unanimous agreement in the Chamber today, and I am sure that the Minister will be listening to that carefully.

All the information was contained in a report to the Gambling Commission, which did nothing and rejected the warnings, as it did not consider that there was enough evidence to show that the undertaking was fraudulent. It then transpired that the Gambling Commission was not properly notified of the nature of the product in its licence application, nor was the regulator informed of changes to the product after its launch as required. There has clearly been an absence of scrutiny and, one might say, of curiosity in some quarters, given the concerns raised about the platform. Football Index was never regulated by the Financial Conduct Authority, but areas for improvement for that body have been identified, including the speed of response to requests from the Gambling Commission and consistency of messaging on regulatory responsibilities.

For the constituents who contacted me about the issue—I am sure that it is the same for other Members’ constituents—the financial losses have been significant. For some, they have been life-changing, and have put strains on family relationships and future plans. Still there has been no redress for those who were told they were participating in an investment instead of a gambling opportunity. Indeed, the only hint on Football Index’s website that it was a betting site was an easy-to-miss strapline, which was added several years into its existence, and only at the insistence of the Advertising Standards Authority.

This situation happened because of spectacular failures in regulation, which allowed a gambling product to masquerade as a financial service or investment platform, without the regulation that that would suggest. Those who were fooled by Football Index—and they were fooled—should not pay the price of this failure of regulation. That only adds insult to serious injury. I know that the Minister will say that gambling losses cannot be made good by taxpayers’ money, but I draw his and other Members’ attention to the words of David Hammel, who is one of the spokespeople for the Football Index action group. He said:

“The regulators don’t actually cost the taxpayer any money, they are funded by licence fees and they also contribute to the Treasury by way of fines and settlements. There is a net surplus since…Football Index was first licensed in 2015, it’s approaching £1.3bn or £1.4bn that’s gone into the public purse.”

Football Index action group wants a mere 10% of that sum to be reassigned for use as redress. That would not directly involve taxpayers’ money.

[Ronnie Cowan]

I have one of those numbers going around in my head. It is said that £90 million was lost. Well, it was not lost. It is there somewhere. Someone has that money in a bank account somewhere; it did not just disappear into the ether. We are trying to find redress for people who have lost tens of thousands of pounds. If we identify that money, surely there is a way. Even if it is in a bank account in Jersey, there has to be a way of paying redress to the people who lost it in the first place.

[Patricia Gibson]

I thank my hon. Friend for that point, but I also urge the Minister to look carefully at the suggestion of David Hammel from the Football Index action group. I agree with Mr Hammel, and I want the Minister to consider his proposal for how redress can be managed for the victims of this scandal.

It almost goes without saying, but I will say it anyway, that such a fundamental regulatory failure must not happen again, yet Members have raised concerns about the co-founder of Football Index being involved in a new trading platform, KiX, that has striking—chilling, even—similarities to the one under discussion. I hope that the Minister will use his role to ensure that regulators keep a close watch on that new product. We must ensure that the same mistakes are not repeated, and that it is clear to all users whether a site is a gambling site or an investment site. There should never be any dubiety that the customer has to work through; it should be clear and front-facing.

I am sure the Minister will agree that this must not happen again. I ask him to think carefully about the suggestion from Mr Hammel about how we can recompense users of Football Index without directly using taxpayers’ money.

15:20

[Stephanie Peacock (Barnsley East) (Lab)]

It is a pleasure to serve under your chairship, Mrs Murray. I will begin by paying tribute to my hon. Friend the Member for Blaydon (Liz Twist) for securing this important debate and for all her work on this important issue.

The collapse of Football Index three years ago was devastating for many people up and down the country, as we have heard. Football fans had been told that they could put their money and confidence in players who they identified as rising stars, and were promised that they would be paid dividends if they were correct. It was advertised as the world’s first football stock market, which was misleading to users as they believed they would be using the football knowledge they had gathered over years to make money on the scheme, rather than participating in gambling.

After administrators were called in, the collapse took an estimated £90 million in customer funds. Victims have formed the Football Index action group and I pay tribute to its work. It is campaigning to ensure that the events that led to the loss of that huge amount of money never happen again, which my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) spoke about so well. Some users lost hundreds of thousands of pounds, as the hon. Member for Strangford (Jim Shannon) highlighted.

Following the collapse, the Gambling Commission decided to suspend Football Index owner BetIndex’s operating licence in 2021. The Government then commissioned a review by Malcolm Sheehan KC of the events surrounding the establishment and subsequent collapse of Football Index, with the intention of learning lessons from the mistakes made. His report concluded that BetIndex failed to properly inform the Gambling Commission of the nature of the product in its licence application and did not inform the regulator of changes to the product after its launch as it was required to.

The Football Index action group includes that among its criticisms of the model, arguing that everything about the index sought to brand it as an investment product rather than a betting site, as my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) outlined. Indeed, one of the index’s two main features, the “go-to-market” feature, was not communicated to the Gambling Commission as part of the original application, flouting the commission’s expectation of openness and transparency during the process.

The Government report also found that there was potential to improve the Gambling Commission’s handling of the incident. In the first instance, reports that the Gambling Commission was made aware of the issues with Football Index in 2019, two years before the collapse of the product, are extremely worrying. Questions remain about why the commission failed to act sooner, thereby potentially mitigating some of the effects of the collapse. The report recommended a number of steps for the commission to take, including greater scrutiny of new gambling-related products intending to come to market, consideration of the effect of language used on consumer understanding of gambling products, and more prompt decision making and action. The report also suggested that the Financial Conduct Authority could have done much more to help, and recommended improvement of regulatory co-operation between the commission and the FCA.

It is welcome that the Government have committed to implementing the recommendation of the Sheehan review in full, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said. People feel that they have been let down by both Football Index and the regulator, and argue that they should never have been put in this position without intervention to prevent cash losses. They remain angry and the Government must learn from the incident to ensure that others do not find their capital at risk in the same way.

In an age when advances in technology have allowed the betting and gaming industry to develop rapidly, it is right that we work with the industry to ensure that consumers are protected from potentially harmful schemes while allowing those who gamble responsibly to continue to do so.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend is presenting an excellent summary of the failures of Football Index. Like others, I have constituents who lost large sums of money. I am concerned to hear that a new platform called KiX—a football cryptocurrency trading platform modelled on Football Index—has been set up with the involvement of Adam Cole, one of the founders of Football Index. Should the Government not ensure that the FCA and the Gambling Commission both look into KiX at this early stage and that the appropriate regulatory activity happens this time so we do not see a repeat of Football Index?

[Stephanie Peacock]

I thank my hon. Friend for his intervention and I will come on to that point in just a moment.

The rapid growth in technology and our growing awareness of the impact of gambling harms mean that changes to our gambling regulation are now long overdue. It is important that we revise our gambling legislation to avoid incidents such as the collapse of Football Index in the future. Those who flout the rules of the regulator should be punished for their actions so that customers can be sure that those operating in the market are legitimate.

That has sadly not been the case, however, as reports emerged this month that the co-founder of Football Index, Adam Cole, is now helping to launch a product similar to the collapsed platform. That will be released as the new football cryptocurrency trading project KiX, as has been mentioned. The Football Index action group spokesperson, David Hammel, described that as

“a real kick in the teeth”

for victims. I would like to raise those concerns with the Minister and ask him why Adam Cole has been allowed to be an integral part of a new platform that mirrors Football Index.

We have heard about the devastating effect that losing money through Football Index has had on the mental health and lives of users. It is clear that more must be done to ensure that vulnerable people and families are protected. The Labour party welcomes the measures outlined in the gambling White Paper with the intention of protecting vulnerable people from gambling harms and financial detriment.

Examples like the collapse of the Football Index outline the serious threat that not having the right legislative and regulatory protections in place can cause to consumers. I hope the Minister will listen to the concerns of the Football Index action group, and that he can tell us what the Government have been doing to ensure that this can never happen again and how they can learn from past mistakes.

15:26

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the hon. Member for Blaydon (Liz Twist) for tabling this debate. I know she also secured a debate in 2022 on the impacts of the Football Index collapse. I would like to acknowledge the contribution she has made to ensuring that these events receive the attention that they deserve. She is an admirable representative of those in her constituency and others who have been affected. The Government appreciate, and I certainly do, the impact these events have had on them and many others. I personally offer my sympathies to all of those affected financially by the collapse of Football Index.

I thank all hon. Members for their contributions today. I also want to say thank you to David Hammel for his campaigning work on behalf of people who have lost money as a result of these events. I have met Mr Hammel and know that he has engaged administrators, regulators and politicians on behalf of those affected.

Today’s debate has been valuable and I commend all those who have contributed for their thoughtful comments. It has been important for me personally to hear the perspective shared this afternoon on this important topic. I want to be clear that I and the Government recognise the serious consequences that the collapse of Football Index has had on consumers. As I said, I sympathise with all those affected. It is important that we ensure that a similar scenario cannot happen again.

I will not repeat the background to these events, as that has been well covered by colleagues. I want to focus on the action being taken following the independent review of the regulation of Football Index, led by Malcolm Sheehan KC. I thank him for that work. His report examined the regulatory circumstances around the granting of a licence to BetIndex, its subsequent suspension and the company’s ultimate financial failure. Importantly, it identified areas, as others have said, where the Gambling Commission could have been more effective in responding to the challenges posed by this novel product. It also highlighted where the FCA could have co-operated more effectively with the commission.

The report recommended that the Gambling Commission should enhance its scrutiny of novel products; such products are less likely to fit neatly into existing regulatory frameworks, and there is greater risk that they are poorly understood by customers, as colleagues have mentioned. It recommended closer examination of the language typically associated with investments and financial markets, which can obscure the fact that a product is a gambling rather than a financial product. It outlined the need for more prompt decision making, quicker internal escalation and greater scrutiny of any differences between described and actual features of products. Finally, the report recommended that the commission consider whether operators should be required to demonstrate additional levels of liquidity in the case of longer-term tradeable bets like those offered by Football Index.

Although Football Index was never regulated by the Financial Conduct Authority, Mr Sheehan’s report recommended that the FCA should also seek to achieve quicker and more consistent decision making on regulatory responsibility issues. The report concluded that the FCA could have been faster to come to decisions in the Football Index case and to communicate those to the Gambling Commission.

The Gambling Commission and the FCA agreed a formal memorandum of understanding in June 2021. The Sheehan report described that as an appropriate and proactive step. However, it also made recommendations about how the memorandum could be strengthened. It recommended that the new memorandum should include an agreed mechanism for resolving disputes over regulatory responsibility; mechanisms for ensuring that disputes are identified, discussed and escalated where necessary; and provisions for the written recording of meeting outcomes.

It is vital, as the title of the debate points out, that we learn lessons from the Football Index case to ensure that a similar situation does not take place again. I am pleased that all the recommendations of the report for the commission and the FCA have been implemented in full.

The Gambling Commission has taken various actions to achieve that. It consulted on and updated its statement of principles for licensing and regulation in June 2022. It has updated how it assesses risk so that novel products are properly considered. It now undertakes systematic reviews of novel products offered by existing licensees. It has also increased the resources available to ensure that licensees disclose notifiable changes to products. The commission has also changed its approach to licensing products where long-term bets might appear more like financial products. It has made it clear in its statement of principles that it will not normally grant a licence to products that use language usually associated with investments or financial products.

Various colleagues raised issues around advertising, and the hon. Member for Worsley and Eccles South (Barbara Keeley) asked about the gambling White Paper. We are not introducing one single Bill because we want to ensure that we get as many of the changes done as quickly as possible. We are making good progress. I have consistently committed to trying to get everything done by the summer. Some of these things will be ready for statutory instruments soon, but some are what the Gambling Commission will implement. By splitting it up, rather than having one big Bill that might take a long time to get through this place, we are proceeding at pace to bring about the reforms.

The FCA has also implemented all the recommendations from the report. Importantly, it has taken steps to improve the speed and consistency of its decision making, including nominating an executive director to oversee the relationship with the Gambling Commission.

An updated memorandum of understanding addressing all the review’s recommendations was agreed between the commission and the FCA in November 2022. The agreement has established a process and timeline for co-operation between the two authorities and a process for escalation, and created a relationship owner and primary contact in each authority to oversee the operation of the memorandum. It also requires a quarterly minuted meeting between the two authorities to ensure that the memorandum operates as it should. The most recent meeting took place yesterday.

There are also now ad hoc meetings between the chief executive officers of the two authorities, which provide an avenue for escalation of regulatory matters if required. I am grateful to the Gambling Commission and the FCA for their work to ensure that this important report is acted on.

I mentioned David Hammel, and I admire the work of campaign groups such as the Football Index action group and the way that it has conducted itself. I met him last year and we have had follow-up correspondence. I am taking seriously the extra evidence that Mr Hammel has submitted in relation to the Sheehan review, and I am considering, as the hon. Member for Blaydon mentioned, whether it would be appropriate and feasible for Mr Hammel’s evidence to be scrutinised by someone external to the Department.

A lot of Members mentioned the new product, KiX, which has described itself as a football cryptocurrency trading project and bears similarities to Football Index. It involves trading footballers in the form of so-called “Digital Athlete Tokens”, which are purchased with cryptocurrency. The tokens pay out a yield based on the performance of footballers. It appears that the product is in a test phase and is not currently live, nor does it appear possible to deposit currency.

The Gambling Commission is taking proactive steps in relation to KiX. It has written to the hon. Members for Blaydon, for Swansea East (Carolyn Harris) and for Brentford and Isleworth (Ruth Cadbury) to outline its approach, and it has written to my Department. The commission is currently reviewing a number of elements of the KiX product. That includes a review by its compliance and legal teams to consider whether, if launched, it would meet the definition of gambling under the Gambling Act 2005. It has also written to the individuals responsible for KiX for further information on the product and their intentions, and to highlight the consequences of launching a product that meets the definition of gambling in Great Britain without an appropriate licence.

[Ronnie Cowan]

Is the Minister saying that the Gambling Commission alone will decide whether KiX is given a licence to bring its products to the marketplace? I have a meeting with the Gambling Commission at 4.30 this afternoon and I would like to ask it that question, too.

[Stuart Andrew]

The hon. Gentleman interrupted me just before I was going to say that the commission and the FCA are already engaging to establish the details of the product and to agree the appropriate steps.

There have been reports that two individuals previously involved in running Football Index are involved in KiX. Adam Cole was the co-founder of Football Index. He surrendered his personal management licence in September 2021 while under review, and the commission reached findings of fact regarding his involvement in Football Index. Those would be considered if he were to make a new application for a personal licence.

The commission also wrote to Abdullah Suleyman, the former head of trading at Football Index, to confirm the nature of his involvement in KiX. Following the letter, he surrendered his personal management licence on Monday 22 April.

[Liz Twist]

I recognise some of the steps that have been taken, but this comes down to the fact that we do not want to see people being taken in in the same way as they were with Football Index. It is great that those individuals have given up their personal management licences, but they have already shared their information and used their experience to set up a new system. What more can we do to make sure that people in the UK are clear about the status of this and that it is properly regulated?

[Stuart Andrew]

I was going to come on to that point. I reassure colleagues that the commission will continue to take a very active role in the monitoring of this product, and the FCA is also looking into the KiX business and will take appropriate risk-based action if it identifies that any of its activities fall into the FCA’s remit. However, I will raise this issue with both organisations again to ensure that everything is being done, because, like everybody else here, I do not want this to happen again. I hope I can reassure the House that the commission has been monitoring the market for several years for potential products that attempt to replicate Football Index. It has intervened in several instances. Although it would not be appropriate for me to name those businesses, that demonstrates the commission’s proactive work in this area.

The hon. Member for Blaydon raised the issue of StocksFC. The Gambling Commission is engaged with StocksFC and is monitoring the company at this moment. I will write to the commission for further information on that product and ensure that everything is being done to monitor it.

[Barbara Keeley]

I want to emphasise the point that my hon. Friend the Member for Blaydon made, but I also want to pose a question: what credibility does the Minister think the Gambling Commission has now, given that so many people have lost so much money? As for the commission posing the question of KiX, “Is it gambling?”, if it is based on the Football Index proof of concept and the expertise going into it is from Football Index, it is Football Index mark 2 in a different form. Hon. Members have all outlined how much this was not an investment and how much it was gambling. In fact, questions of compensation are affected by that, in that Ministers have said that taxpayers’ money should not be used to compensate people for gambling losses. So it seems to me that it is a bit of a joke to ask, “Is it gambling?” Do we have to ask that when it so obviously is?

[Stuart Andrew]

I understand the hon. Lady’s point, but it is important that these things are looked at properly, under the remit of the existing legislation. The Gambling Commission has done a lot of work in this space to try to deal with the grey area that the hon. Member for Inverclyde (Ronnie Cowan) mentioned. I want to come on to that point, because the cryptoasset side of things brings in another area of work.

I assure Members here that I will speak to my Treasury colleagues to highlight this issue, and to ensure that we do not find ourselves in a position like this again and address each of these issues. I am confident that the relationship between the Gambling Commission and the FCA is much improved and that the regular meetings between the two organisations will ensure that there is not a slip again. However, in order to get this right, I am more than happy to speak to colleagues in other Departments to ensure that no cracks still exist.

[Patricia Gibson]

I want to press the Minister: can he assure me that he will go away and look at the suggestion made by David Hammel of the Football Index action group about a route to deliver compensation without having to take it directly from the taxpayer?

[Stuart Andrew]

I think it would be worth more than my life’s worth to commit Treasury colleagues to a policy, but I understand the hon. Lady’s point. I have seen that suggestion and I am sure that Treasury colleagues will have views on it. I will raise that with them and write to hon. Members following their response.

I thank everyone who has contributed to the debate. I hope that I have been able to provide clarity about some of the lessons that have been learned from the collapse of Football Index and the action that has been taken by the Government, the Gambling Commission and the FCA as a result. I understand the real consequences that people have felt. This debate has been invaluable for me to ensure that we consider all the issues that need addressing and speak to colleagues across Government so that we do not see this awful situation happen again.

15:43

[Liz Twist]

I thank everyone who has taken part in this debate, including my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Worsley and Eccles South (Barbara Keeley), the hon. Member for Strangford (Jim Shannon), and my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss). I thank the shadow Front Benchers, the hon. Member for North Ayrshire and Arran (Patricia Gibson) and my hon. Friend the Member for Barnsley East (Stephanie Peacock), and I thank the Minister for his response.

I have a few points to make. As is usual these days, people have been tweeting points at me all the time as well, so I was watching those. The main thing I want to say is that we all want to ensure that we learn the lessons and make it not possible for people to be fooled—to be misled—in this way again. That is what our attention must go to.

I am particularly concerned that we should not see people falling through a gap in the regulatory frameworks, whether that involves the FCA, the Gambling Commission or any other organisation. It is really important that we not only reach memorandums of understanding but ensure that that works and, if neither one seems suitable, that we look at what on earth we can do to make sure that the gap is plugged in the meantime. That is really important for people.

I note that the Minister has undertaken to speak to the Treasury, which is really helpful. Arguably, we could have been having a debate in Treasury time saying what happened and what went wrong. It is really important that the Government work together to ensure that people are not misled and not required to look at the tiny print at the bottom of a website to find out the status of a scheme.

Finally, in news hot off the press, we talked about the FSCS, and I understand that there are currently 10,000 users on that scheme and that we are still looking at it. I do not expect the Minister to be able to respond on that, but it would be helpful if we looked at it outside this debate.

I thank everyone for participating. Let us make sure that what happened with Football Index is not allowed to happen again.

Question put and agreed to.

Resolved,

That this House has considered the lessons learned from the collapse of Football Index.

15:46

Sitting suspended.

Universal Credit: Farmers

Wednesday 24th April 2024 Westminster Hall

16:00

[Wendy Chamberlain (North East Fife) (LD)]

I beg to move,

That this House has considered universal credit and farmers.

It is a pleasure to serve under your chairpersonship, Mrs Murray.

This morning for breakfast I had oat clusters, and for lunch I had a cheese panini with some salad—it is a good day when I remember to eat. So far today, without even thinking about it, I have had produce from oat and wheat farmers, dairy farmers and a variety of vegetable farmers, and I am suspect everyone here could say something similar if they stopped to fill in a food diary. Farming is integral to our day-to-day lives.

When we are down here in Westminster, farming might seem very far away—there is not a field in sight—but my constituency of North East Fife is rural and has a wide variety of agricultural businesses. Next month, the annual Fife Show will attract farming from across North East Fife and the surrounding areas, and bring that community very visibly together. It is therefore not surprising that I am here today talking about this issue, given the constituency I represent, but it affects even MPs representing urban constituencies: farming is quite literally the lifeblood of our very being. Without farmers, we would not have food. I say that at the start of a debate on universal credit to drive home the very important point that we must not lose sight of the needs of our farmers, and must do everything we can to support them. Surely that is what the Government’s Farm to Fork strategy is all about.

The state of our food supply chains mean that some farmers need benefits to boost their incomes, and that is deeply worrying. That is a debate for another day and another Department. The fact that some need support is why we are here today to ask the Minister and the Department to design a system that works with, and not against, farmers.

[Jim Shannon (Strangford) (DUP)]

The hon. Lady always brings subjects to Westminster Hall and the Chamber that are of particular interest to me. I declare an interest: I am a member of the Ulster Farmers’ Union, and we own a farm outside Greyabbey, so I understand the issues and the implications of what she is saying. Does she agree that farmers may have three good months of income—not necessarily profit—followed by nine months of hardship, so the monthly system is not appropriate for their seasonal work? Rather than making farming viable, the Government aid through the universal credit system may put people off and make farming untenable for families. That is incredibly concerning as it affects our food security, which this debate is also about—food security and delivering for the nation.

[Wendy Chamberlain]

The hon. Gentleman always gets straight to the key issues in his interventions. I will talk about a number of the things that he referenced. Indeed, the monthly aspect of universal credit is one of the key challenges.

Let me start with the basic point: the Government are asking the vast majority of farmers to go through the process of transitioning to universal credit from tax credits now, right in the middle of peak farming months. For example, it is the middle of lambing season. Let me be blunt: sheep farmers do not currently have the time to sort through accounts, visit the jobcentre or have interviews by phone. We all recognise that farming is not a 9 to 5 job where appointments can be scheduled. The sheep three fields down having a difficult birth will not be able to hold on just because the jobcentre is due to call. The farmer who cares deeply for their animals and also cannot afford to lose income if things go wrong will not be able to stay in the farmhouse to wait for that call. They will be down in the field with the sheep to keep an eye on things and intervene if need be. Even if there is a phone signal, which is not always guaranteed, a farmer can hardly talk through the viability of his or her business while elbow deep in that sheep.

I appreciate that that sounds slightly comical, but it is deeply frustrating for farmers and incredibly stressful when they are worried about losing their income. It shows a failure within the DWP system to understand how farming works, so I ask the Minister: what thought and consideration was given to farmers when the decision to roll out the transition to universal credit was made? I know the National Farmers Union raised concerns about the transition as early as 2018 in evidence to the Work and Pensions Committee. Did the Government pay any attention to that? Even if they are talking to the NFU, I cannot see the outcome in those policy decisions.

I recently tabled a written question asking for an impact assessment on how the roll-out of universal credit to farmers has been done. The response—I will be honest—did not exactly answer the question, so I will make the assumption that the answer is no. If I am wrong, I am happy to be corrected on that, and I hope the Minister will use her time to set out the findings from that assessment. But the response I received did point me to the latest findings from the “Move to Universal Credit”, in which there was only one paragraph relevant to farmers—an observation that additional checks on self-employed claimants may be a factor in the low take-up of universal credit. Obviously, that is a part of it, but it somewhat understates the issue, and it also conflates all self-employment businesses. Farming is very different to somebody, for example, running a shop, selling handmade products, or a tradesperson such as a joiner. Here we are: I am going to assume that the Minister has heard the warnings from the NFU, has seen correspondence from MPs, has spoken to farmers herself, has had her officials carry out research into the farming industry, and has seen the media coverage on the radio, specialist farming news and print media.

In any case, I will explain why universal credit fails farmers. Universal credit does not account for variable incomes and does not allow for those incomes to be averaged out. The very nature of farming means that farming income varies significantly through the year, or even over multiple years. I want to go back to that sheep farmer who is busy saving their animals and bringing new ones into the world, rather than speaking to a work coach. That lamb will not be ready for sale until much later in the year, meanwhile the sheep and the lamb will require food, shelter, water, shearing and possibly extra hands on the farm to help out in the busy months. An animal farmer might in some cases try their hardest to grow crops to be harvested in each season, but often that is not practical. Not all areas are suitable for all produce, and even if they were, economies of scale mean that it can be more profitable to specialise. That does not mean there is no work that needs to be done until harvest and sale time; just that the work done by farmers does not get paid for many months. Meanwhile, seed, fertiliser and fuel costs are all going up. That is arguably one of the reasons why some farmers need extra support in the first instance.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Like my hon. Friend, I have had correspondence with the Government on this issue. The sheep farmer example is a very good one. That sheep farmer will have income, possibly in the autumn from the sale of the sheep, possibly from a basic payment, and possibly from something like the less favoured area support scheme. There might be a small wool cheque at some time in the late summer or early autumn, but apart from that, that is all the income, which then has to be spread and harvested throughout the rest of the year. That is the reality for the sheep farmers to which my hon. Friend refers, and it shows the virtual impossibility of shoehorning that into a universal credit scheme that looks at things on a monthly basis.

[Wendy Chamberlain]

I am grateful to my right hon. Friend, and he has illustrated part of the challenge. We are finding that, when that income spike happens, that is the very point where farmers are losing the benefit to which they should be entitled. It is important to recognise that sometimes it all goes wrong: a really bad harvest; illness among livestock; a year of barely breaking even; or worse. Otherwise, in the main, hopefully all that hard work and waiting pays off and payments come in. After months of very little, there is a significant income boost, and a boost that—as I have just said—will write off universal credit for that month, even though that income boost will have to stretch over the many months until the next sale day.

Tax credits allowed farmers to average out their income over a multiple-year cycle to truly reflect their monthly income over time. Universal credit only takes a one-month snapshot, and I know that people have experienced difficulties with universal credit in occupations such as farming for that very reason. Given that work coaches are required to assess whether self-employment is gainful, there is a significant risk of months of loss being seen as not real work. Recently, on that very issue, a headline in the Telegraph stated: “Farmers claiming benefits told their farms are ‘hobbies’ and to get jobs”. Some work coaches might understand how farming works, but it is clear that others certainly will not and do not—it cannot be left to luck. I doubt the Department has spare funds to train all work coaches in farming practices, so a standard reform of how income is assessed would surely be a much fairer and efficient path to take.

Another related issue that I will highlight is the imposition of the minimum income floor after the 12-month transition period. I fully accept that there must be measures to stop people being able to potentially manipulate benefits to prop up an unsustainable small or hobby business. Applying a deemed minimum income when calculating universal credit works in those cases, but I seriously question why it is useful to take vital income support away from farming families in those months where their produce is being produced rather than sold. Farmers are not earning the minimum wage in those months, so why on earth are we pretending that they do?

The 12-month transition period is welcome, but the nature of farming will not change in the course of a year. Arguably, all that will do is push the problem down the road, so I urge the Minister to go away and review it. If she is genuinely concerned about farmers exploiting universal credit, there must be other anti-abuse provisions that we could be looking at. The minimum income floor is a blunt tool that is doing more harm than good.

My final point is similar to my first, because after the administrative burden of applying to universal credit, farmers must continue providing monthly income updates. Farmers are not accountants; they often operate in partnerships and, most importantly, they work full time doing the actual farming. Their definition of full time is different from others, because it means well over 12 hours per day, seven days a week. When exactly does the Minister think that farmers will have the time to meet those obligations?

I ask the Minister to not just repeat the same platitudes that have been signed off and sent in a standard letter, which my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) and I have both received. I have seen that letter shared online many times, and I assure the Minister that it has done nothing to reassure anyone.

The good news for the Minister is that she needs only to look back to the tax credit system to find out what works; she does not need to reinvent the wheel. What farmers need is a system that allows for averaging income over multiple months and years, where benefits are paid during income spikes and where there is no assumed minimum income when it is low. They need a system without the administrative burden of monthly appointments and paperwork, and with an understanding of how farming works and the variety of set-ups, be that tenant farmers, those in partnerships, and everything in between.

It is not just farmers saying that. I have an example from a rural land and property agent, who has published a blog entitled “Why the Universal Credit System Isn’t Working for Farmers”. The Farming Forum threads on the change currently have nine pages of comments on one thread, while another thread has 24 pages. There is a Facebook support group for farming families that has been deliberately kept open so that MPs, journalists and others can see what farmers are saying about this change.

Yesterday, on that Facebook page, someone anonymously posted that because their family were so busy on the farm they could not get to the job centre, and their benefits had been stopped. The writer went on to say, in their own words, that they wanted to chuck themselves off a bridge as a result. A few days before that, someone wrote that they were able to feed their children but they could not afford to eat that day themselves. They used to get £700 in tax credits a month, but the assessment for universal credit does not take into account the difference between income paid to the family and income used to meet farming bills.

The system change means that someone who is producing our food cannot afford to eat. That is just not okay. Farmers are literally the reason why we are here in the Chamber with full stomachs, why our children have the energy to go to school and learn, why we can go to the supermarket and make our dinners tonight and why our restaurants are some of the best in the world. It is not an issue that will go away; it is a crisis for too many farming families. We must support them, and I hope that the Minister’s response recognises the gravity of the situation.

16:14

[The Minister for Employment (Jo Churchill)]

It is a pleasure to see you in the Chair, Mrs Murray. Before I respond, I would like to pay tribute to Lord Field, whose passing was announced earlier today. He was a wonderful individual who contributed over many decades to the important issue of welfare. My personal memories are of his kindness and compassion during my early days here. As a former Work and Pensions Committee Chair, I know he would have taken great interest in all the activity happening across the House on welfare issues, not only this week but in the recent past.

I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing this debate. First, let me put it on record that the Government recognise the vital contribution of farmers to the country and to the economy as a whole. It is worth the most enormous amount to us, in not only the growing sector, but the manufacturing sector. From my own early days as a young farmer, right through to my representing a rural community, I have been more than embedded, and I understand the challenges. The hon. Lady will know—as I do—that, as with many business areas and sectors, these businesses come in a multitude of forms. Although I appreciate what she said about her farmers lambing, my farmers are trying to get seeds in the ground after the most appalling rainfall. I say gently that they are not the only businesses dealing with fluctuating incomes, transitions throughout their year or lives where they put in 12-hour days. We are working with them, and I agree that that point is important.

For clarity, I met the representatives from the National Farmers Union on 19 March, and I am very grateful to them. As soon as the issue of the migration of those in the farming community from tax credits to universal credit was flagged to me, I reached out to the NFU directly, it responded and we had the meeting to discuss that issue. I cannot answer the specifics that the hon. Lady brought up, but I am interested in them, because the tax credit migration notices have only just gone out, so I am confused as to why there would have been the stories she mentioned. Perhaps if I might be facilitated with those individual challenges, I can make sure they are addressed swiftly.

Officials in my Department are continuing that engagement to ensure that farming communities are communicated with clearly, that the transition to universal credit is as smooth as possible and that the concerns are heard. At official level, I had meetings on 9 and 10 April with officials from my Department and the NFU. Engagement has been constructive. Actions include sharing the third-party information pack on the move to UC with the NFU, which will share it with farming charities—the pack supports welfare rights organisations and charities in understanding the process of making claims and what support is available; the NFU promoting the move to UC activity to the farming community via its regular communication channels; work with the NFU to produce a product for work coaches explaining the farming sector, because I, too, do not like that term; and inviting the NFU external affairs team to a monthly UC stakeholders forum. I have also asked whether we can have somebody with the right expertise at our county shows throughout the country to have a session in the NFU tent, the CLA tent or wherever is appropriate, so that people can have discreet conversations where they are most likely to be facilitated.

The Department is providing that support, including assistance when making a claim for universal credit to those who need it. Importantly, that also includes comprehensive transitional protection if they are eligible. Transitional protection is an extra payment in a customer’s UC award ensuring that their entitlement is not lower than what they would have received on tax credits at the point of movement. Transitional protection is there to smooth the change, which is why individuals should fill in the migration notice when they get it. Importantly, self-employed customers are also exempt from the application of the minimum income floor for a 12-month period, providing significant time for the adjustment to UC to take place.

It is therefore vital that customers take action when the migration notices are received, so that they do not miss out on the important transitional protections we are trying to provide to make sure that a worried customer—today we are talking about farming, but they could come from various other sectors—is helped and managed through the migration. When I discussed this with the NFU in March, it understood the need to avoid delay and indicated that it stood ready to support individuals and ensure they engage.

[Mr Carmichael]

I am sure we can all play a role in ensuring that this transitional relief and the importance of returning the form are understood—doubtless, the NFU and others will do that, too. The difficulty I have, however, is that even at the end of that transitional period, I do not see what in the farming business model will have changed. There will still be self-employed people with income coming in significant sums, but at small points in the year. At the end of the transition, we will still be where we are today—that will not change. If there is going to be change, it must come from the UC system.

[Jo Churchill]

I thank the right hon. Gentleman for his comments. If he will allow me, I will come on to those shortly. I gently say that he comes from a tourist-driven area, where those incomes for those individuals fluctuate, and we expect them to have moved over to the UC system.

With regard to self-employment, universal credit addresses a number of flaws with the tax credit system. The Government stand by these reforms, which were first introduced in 2013. To give context, self-employed individuals have previously been able to report very low earnings from their business activity while receiving much of their income from tax credits. That can act as a disincentive to grow a business or look elsewhere for employment, if a business is not viable. All of us in this room know that businesses vary in their viability. This is an arguably unfair situation for the taxpayer and risks trapping individuals in low-earning self-employment and thereby, in some instances, more of a dependency on the welfare system.

All customers moving to universal credit, including farmers, are asked and expected to attend a one-off meeting with a work coach to confirm their employment status. This means confirming that farming is their main employment, being regular, organised and developed, and trying to making a profit—not that it has to, but just that it is their main job. I am sure the hon. Member for North East Fife would not disagree with this approach, as it is focused on fairness. We consider each claimant’s circumstances individually, and it is no different for farmers. They are most likely to be considered gainfully self-employed, for the exact reasons she laid out: they have livestock, they have to be there every single day, or they have crops to grow and so on. They will therefore be free to work on their business with no expectation to look for other work or take it up while in receipt of universal credit.

During a farmer’s first year in receipt of the new benefit, they might be expected to meet their work coach up to four times more, but to minimise this, multiple appointment channels are available, which I am assured includes digital, so it might just be a short meeting over Teams. With all due respect, that is not any more onerous than engaging with a feed supplier or with accountants. After 12 months, the minimum income floor is applied, and no further work coach interactions are required if an individual’s or a household’s circumstances stay the same. Again, once established—that is what the transition period is about—that stability is carried through.

I know that concerns have been expressed about the impacts on farmers through the way their earnings are reported and the administrative burden that this might cause, but I would like to reassure hon. and right hon. Members that my officials are working with the NFU to better understand whether farmers are worrying about this challenge in anticipation, or whether there are things we can do to assist. That includes the NFU’s attendance at monthly stakeholder engagement sessions and our offering to speak at NFU events. It is not to anyone’s benefit to have people worried in this situation.

Universal credit seeks to take earnings into account in a way that is fair and transparent, with earnings considered in the assessment period in which they are received, with a customer’s award adjusted accordingly. That does mean that individuals are required to report their earnings more frequently than with tax credits and in a slightly different way. However, the system has been designed to be simple and straightforward, with customers needing to provide only the total income from receipts into the business and high-level details of payments out during the assessment period.

While we are debating universal credit and farmers, I gently say that the farming community, as I alluded to earlier, is not the only profession experiencing these large monthly fluctuations, with retail and tourism also doing so. I am sure that the hon. Member for North East Fife agrees that it is important that we work with our farmers, vital as they are to all of us, given the food they put on our plate, to alleviate concerns, overcome barriers and help with the transition to UC.

Assessing earnings monthly rather than annually may have a greater impact on all self-employed people with large monthly fluctuations, but steps have been taken to account for that. Where a self-employed customer reports a loss, the value of the loss is carried forward and taken into account when assessing earnings in future assessment periods. Similarly, when customers experience a spike in their earnings, only earnings that have exceeded £2,500 more than the amount that would normally reduce their universal credit award to zero will be carried forward to affect a future assessment period.

Universal credit is a broad system of support that takes account of all individual household circumstances. I am a little concerned that the assumption today is that every engagement a farmer might have with the Department for Work and Pensions would be a negative one; that is not the case. Where additional help is available—for example, with childcare or other assistance—individuals will be signposted to the support they are eligible for, which they might not have been aware of prior to making their claim.

Finally, I want to put on record my thanks to the NFU, which swiftly engaged with us when asked and was honest and forthright about the challenges. It has stepped up to working with us. I hope that we can work together to assist the broader farming community, which is hugely important to the nation. I strongly encourage people to engage with the migration notice so that they can access the support and income protection as we make the move to universal credit.

[Mr Carmichael]

On a point of order, Mrs Murray. It was remiss of me while intervening in the debate not to remind the House of my entry in the Register of Members’ Financial Interests. I hope you will allow me to do so now for the record.

[Mrs Sheryll Murray (in the Chair)]

Absolutely.

Question put and agreed to.

16:27

Sitting suspended.

Space Industry

Wednesday 24th April 2024 Westminster Hall

16:30

[Mark Garnier (Wyre Forest) (Con)]

I beg to move,

That this House has considered the UK space industry.

It is a pleasure to serve under your chairmanship, Mrs Murray, and a delight for me to talk about this extraordinarily thriving industry right here in the UK.

As chair of the all-party parliamentary group for space, I get the opportunity to see at first hand what is happening in the UK. The group has recently put on four exhibitions, taking over the Attlee Suite here in Parliament to highlight various aspects of our thriving space industry. We started last year with launch and propulsion, followed by current applications that use space, and we have finished with two sessions on the future of space and the important issue of space sustainability. The exhibitions were well attended by parliamentarians, civil servants and industry experts, and over the four events, more than 40 space companies had the chance to highlight their skills and products to attendees. The exhibitions were supported by ADS and UKspace, and my thanks go to the teams that helped both with those events and in supporting the all-party parliamentary group.

Such drop-by exhibitions serve to highlight that the UK space industry is thriving, active and innovative. Indeed, it is the leader in smart thinking for the sustainability of space and how we will preserve it for future generations. Smart thinking on things such as ESG —environmental, social and governance—kitemarking for UK-licensed space flights, and the wider discussions of space sustainability bonds mean that the UK is a thought leader that will ensure that the ultimate infinity of space is not lost to us because of an impenetrable cloud of space debris orbiting the earth.

At this point, I should declare that my fascination with the sector goes so far that I take an interest in specific companies and organisations, and I refer hon. Members to my entry in the Register of Members’ Financial Interests. I will, of course, avoid speaking about those interests that are financial this afternoon, for important reasons.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for introducing the debate. I spoke to him beforehand and I am keen to ensure that whenever this process moves forward on the engineering side, we in Northern Ireland can benefit. Does he agree that, with engineering the largest subsector in Northern Ireland and especially in the field of aerospace, skill and capacity levels are high and therefore ripe for further investment? Does he further agree that Northern Ireland and the United Kingdom must be globally promoted as being shovel ready or, to use the terminology, rocket ready for greater investment?

[Mark Garnier]

The hon. Gentleman is absolutely right and I will mention Belfast later. Queen’s University Belfast has recently hosted some incredibly important energy-beaming experiments, which will completely open up the possibility for the UK to be world leaders in space-based solar power. I will talk a little more about that later.

My interest in space also derives from my unachieved desire to be an aeronautical engineer. My career in the City of London and an interest in economics have given me the insight to recognise that the space industry is the epitome of what Adam Smith talked about in his 1776 book “The Wealth of Nations”. The space industry epitomises a mature economy’s desire to seek ever more productive activities and the UK is doing particularly well in that area.

The UK space sector as a whole has a turnover of some £17.5 billion per annum, employing nearly 50,000 people, 2,300 of whom are apprentices.

[Christine Jardine (Edinburgh West) (LD)]

I thank the hon. Member for giving way and for obtaining this debate, which is of particular significance in Scotland and in my constituency. I recently visited San Francisco and its space industry, where Edinburgh University is highly regarded. An ecosystem and an environment have been created there that engender growth and co-operation between the university and the private sector specifically on space. Does the hon. Member feel we are doing enough in this country to engender the same sort of ecosystem in places such as Edinburgh, where there is that potential?

[Mark Garnier]

We are, but we could always do more. It is interesting that the hon. Lady chose that moment to intervene because I was just about to mention the amazing things going on in Scotland. Scotland is fascinating for a whole load of different reasons, but she is absolutely right to raise those important points. How we take forward our space industry now through the relationship with the Government is incredibly important to its success. I will talk more about that later, but she should be proud that Scotland is doing so well. I am pleased to see several Members from Scotland who are here to rightly represent the interests of their constituencies, and I look forward to hearing from them all.

In fact, my next line was that more CubeSats are built in Glasgow than anywhere else in the world. Indeed, the space industry in the UK has led to a number of key hubs for space across the country, in addition to Glasgow and Scotland more widely. While it is sometimes easy to overdo the definition of a hub, we have a handful of significant centres leading the way. Harwell Science and Innovation Campus near Oxford hosts a large campus of space companies, from start-ups supported by the Satellite Applications Catapult to offices for big primes and the European Space Agency. Surrey has its research park at Guildford centred around the leading UK satellite company, Surrey Satellite Technology Ltd. Cornwall has a hub developed around the Newquay spaceport and Goonhilly earth station. Leicester has its own science and space park with a fabulous museum and, of course, a space-dedicated university. Scotland has not just its hub around Glasgow, but potentially three vertical and two horizontal launch centres.

The global opportunity is immense. Across the world, turnover is expected to grow from £270 billion in 2019 to £490 billion by 2030. It is vital that the UK not only participates in that growth with our own domestic ambitions, but accelerates its opportunity by seeking wider export markets.

[David Morris (Morecambe and Lunesdale) (Con)]

I declare an interest as the UK space adviser—non-paid, of course. Does my hon. Friend agree that the Government are putting more money into the space sector than any other Government before them?

[Mark Garnier]

They are, but it could always be better. Again, I will come to that later, but my hon. Friend is absolutely right that support from Government in this complicated sector is incredibly important.

To get back to the export market opportunities, the team at space consultants Space4Sight has identified 25 nations across the globe that are only now starting to show their space interest, all of which would benefit from a collaboration with UK companies and expertise. Indeed, I am heading to Vietnam in a month in my role as the Prime Minister’s trade envoy to Vietnam, and one of the scheduled meetings is to promote UK space exports to that economy, which is growing incredibly strongly. This is a huge opportunity for the UK to grow space technology exports to newly identified space nations.

Although we are good at this stuff, we must not be complacent. We have a lead in many areas, but without the right environment, we could lose out to other nations. We need to think about what space is. I have always seen it as a thriving economic sector, yet I notice that the Government, in their last restructuring, chose to locate it in the Department for Science, Innovation and Technology, as opposed to the Department for Business and Trade. Space is a business, not a science project. While I have immense respect for those supporting the sector in DSIT, and they have done an incredibly good job, I hope the Minister will reassure me that his Department sees space as a sector that contributes to our economy, with a lot of commercial opportunity.

I would not want the Minister to feel that I do not appreciate what his Department and some other Departments do for the sector. The Government invest directly in space activities and, according to the OECD, our public spending amounts to around 0.025% of our national GDP. It sounds like a small number, but it represents quite a significant amount of money. However, when compared with other countries, it starts to look a bit small. It is half the relative commitment of Germany, India and Belgium. It is a third of the commitment of Italy and Japan, and a quarter of the investment by France and the United States of America. The sector is highly commercial, but because of the challenges of high upfront costs, other countries have discovered that de-risking opportunities for investors through grant funding stimulates private investment. I hope Members of all parties agree that we should get behind stimulating private investment in the sector through grant funding.

We should not necessarily see space as a sector in its own right. We have other assets in the UK that would benefit from a symbiotic relationship with this super high-tech, high-productivity sector of the economy. The City of London has been a global leader of finance and financial markets for a few centuries now. Expertise in trade finance, investment, insurance, currency trading and the wider associated legal service has made the City of London a global financial hub for a long time, but our lead position is always under threat. For the City to remain a leader, it needs to remain relevant.

A few years ago, I prepared a discussion paper on how we can take inspiration from Gordon Brown’s tax interventions in the UK film industry to find a way to stimulate the City as a space finance hub. Gordon Brown created tax breaks for film investment. I suspect a direct line can be drawn from his intervention to the success, for example, of the Harry Potter franchise. That series of films would always have been made but, without that tax incentive, those spells may have been cast with a Hollywood accent.

A selected tax break here, an innovative approach to governance there, and the City could dominate the world as the go-to place to raise money for space-related opportunities. The City would continue its path from being innovative financier of trade across the globe to modern financier of trade beyond the globe. Other ideas are coming out of the City that would be good to get behind. Professor Michael Mainelli, who is now Lord Mayor of London, has been promoting a space protection initiative that looks at the further purchase of space debris retrieval insurance bonds to go on space flights to ensure that any debris could be recovered in the event of a satellite going out of service. Perhaps they could be called space junk bonds.

If we combine that financial expertise with our world-beating universities and wider technical capabilities, the UK will become the destination for all aspiring space entrepreneurs and developers. With imagination for things such as a British space bank, copying the British Business Bank or UK Infrastructure Bank, the funding that the British Government might offer could be leveraged several times. That would reinforce the message that the Government in the UK are not just grant funding but supporting space through innovative strategic partnerships.

Either way, uplifted long-term funding for the space sector to deliver priorities in the national space strategy, such as the space industrial plan; adopting a long-term approach to industrial strategy that includes a policy commitment to grow small and medium-sized enterprises; and an improved wider understanding of the space sector to encourage more people into science, technology, engineering and maths careers, would have an extraordinarily energising effect on this highly productive sector of our economy. That would certainly solve our current productivity conundrum.

There are further ways the Government can help our growing space sector and the many SMEs that participate. SMEs not only act as suppliers to the big primes in programmes and projects, but have their own prime missions and services. That brings world-beating capability to the market. We need to consider how we can further boost the sector. For example, a British space bank might also be an equity investor as well as a debt funder, complementing the UK Space Agency’s grant funding. Government procurement can act as an anchor customer for demonstrator missions. Scaling up the space technology exploitation programme would help, for example, to boost rapid development and implementation of cross-Government space policy programmes, thereby boosting economic activity in the sector.

I want to finish with some thoughts on an area where we are leading the way, and which demonstrates how widespread the application of space technology can be: space-based solar power. I should declare that I serve as the chair of the advisory board of the Space Energy Initiative, a coalition of businesses, academia, Departments and specialists in this burgeoning area of solar energy from space. I also serve as a non-executive director of Space Solar, the UK’s leading company seeking to develop this actually not very new technology. I stress that those are non-financial interests; I give my time on a pro bono basis.

That is an example of how an emerging sector is growing fast right here in the UK. The Department for Energy Security and Net Zero sponsored and set up a three-day conference last week to study this area, at which I spoke on the last day. It was astonishing to be in a room with such an extraordinary collection of highly intelligent people, looking at something they all know is not just a probability but a reality that will provide dispatchable, baseload, cheap green energy at gigawatt scale within the next 15 years.

Although many doubters suggest that that is science fantasy, UK primes, the UK Space Agency, international primes, the European Space Agency, leading universities and the UK Government all know that this is a reality. Space-based solar power will happen, with or without UK involvement. We are fast approaching the time when we need to decide whether we are to be the driver of this innovative approach to net zero or just another passenger.

If we seize the opportunity, space-based solar power will provide cheap, clean energy faster and cheaper than nuclear. It will be an astonishing export asset for the UK, be it through licensing the technology to other nations or selling the power directly from the satellites. It will tackle other issues in the UK, such as grid equalisation. I repeat that the UK is leading in this field. It is leading because the Government have supported not just the ESA’s Solaris programme but UK research for UK businesses.

In the last few weeks, a huge success has been achieved in the field of energy beaming through 360° using phased array antennas—and it was done in Belfast. The Government have stepped up to the plate to make this happen, and have indicated possible further support through match funding.

However, it does not matter whether we are talking about space-based solar power, GPS where the technology not only finds the nearest pub but times financial transactions, internet services via OneWeb, or Earth observation that helps everyone from generals in Ukraine to farmers seeking yield improvement. A massive range of services comes from the UK space industry, and many of us do not even realise that they happen. We must therefore strive to make sure that our space entrepreneurs are a success, and that this British business success supports the whole of our economy and public finances. That means that we need Government support, because we do not want to find ourselves, as we have done in the past, inventing something brilliant but not exploiting it commercially. For example, Frank Whittle was a brilliant engineer who invented the jet engine, only to see, a few years later, an American pilot flying an American aeroplane over America, using British technology to break the sound barrier. We do not want to see that again.

We are really, really good at this stuff and the Government know we are. That is why we can never get enough support in this incredible industry. I am conscious that many other Members are keen to speak, but I am sure that the Minister has heard what I have said and I very much look forward to his speech later.

[Mrs Sheryll Murray (in the Chair)]

I remind Members that they need to bob if they wish to be called in the debate.

16:46

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

It is a pleasure to serve with you in the Chair, Mrs Murray. I pay warm tribute to the hon. Member for Wyre Forest (Mark Garnier) for securing this debate and for the work he does in the sector. We have spoken about the strategic significance of the space industry for the United Kingdom as a whole. Everything he said in that respect was absolutely correct, but the words in his peroration—about ensuring that we maximise the opportunities that will come from the industry—were particularly pertinent. For my constituency, that goes beyond the high-level opportunities that the hon. Gentleman identified.

There are a number of specific local opportunities for Shetland, as we host on Unst—the most northerly of all the Shetland Islands—the Shetland spaceport at SaxaVord. We have seen that quite remarkable progression in recent times as a consequence of a lot of hard work by the Shetland spaceport, and I pay particular tribute to Frank Strang and his colleagues for getting it to this point. It is now licensed by the Civil Aviation Authority, and we were delighted that it got a commitment of £10 million from the Government in the Budget. Indeed, such is the nature of the achievement that the Shetland spaceport is now even getting some interest from the Scottish Government—something else that must be welcomed.

If you look at the right map, Mrs Murray—by which I mean a map that has Shetland on it, and not just parked somewhere in the Moray Firth in a box—you will see that Shetland, and Unst in particular, sits at the highest latitude point in the United Kingdom, and indeed one of the highest in Europe. That, in turn, allows for a greater payload to be launched for the same fuel efficiency, turning many of the disadvantages with which we have struggled for so long into advantages. Because of where we are, there are natural opportunities for security and safety that would not necessarily be found closer to other larger centres of population.

[Christine Jardine]

I was privileged to visit my right hon. Friend’s constituency last month to see the SaxaVord spaceport and the work being done there. Does he agree that a lot of that work reflects the ingenuity and effort that went into developing the oil and gas industry in Shetland, and which is now being used in a similar way to develop SaxaVord, and that that has already been recognised by the space industry elsewhere in the world?

[Mr Carmichael]

I am delighted that my hon. Friend understands that it was a privilege to visit Shetland. She is absolutely right about that. What I am coming on to say fits well with that, because there are lessons for Shetland to learn from its engagement with the space industry and from how we have successfully engaged with the North sea oil and gas industry for the past 40-odd years.

The history of Saxa Vord, even in my time, has not always been a happy one. Back in the day, it was an RAF radar station waiting for the Russian bear in the cold war to come screaming over the polar ice cap. With the end of the Soviet Union and the fall of the Berlin wall, it was felt that that sort of presence was not necessary. That may have been somewhat premature. I remember, as a Member of Parliament, when the RAF announced its drawdown from Saxa Vord in 2005. I remember going to a meeting of the local community in the Baltasound Hall and the feeling of absolute desolation at that point, because RAF Saxa Vord had become such a massive part of the local economy of Unst. That was to go virtually overnight, and it was a struggle to find something to replace it. We welcome the coming of the space industry to Shetland, but we welcome it on our own terms and—as we did with the offshore oil and gas industry—we want to maximise for ourselves the opportunities that it can bring to our communities.

Some of this is already starting to emerge. SaxaVord spaceport has a science, technology, engineering and maths initiative that already has collaborative research and development projects under way with academic institutions, including the University of Alaska, the University of Strathclyde and the University of Edinburgh—I suspect that Edinburgh probably has the least welcoming environment, in terms of temperature, of those three.

SaxaVord also has an outreach programme for local Shetland schools and colleges, generating future technical skills in the area and ensuring a sustainable spaceflight ecosystem in Shetland and the wider United Kingdom. For us as a community, keeping young people in our community or giving them opportunities to come back when they have been away and had their education is critical. We see this as an opportunity.

It has to be said, though, that the coming of a spaceport to Unst will be transformative for the community. One project that the community is keen to proceed with—and which is deserving of some support from the Scottish Government and the United Kingdom Government—would be to replace our inter-island ferries with fixed-links tunnels going from mainland Shetland to Yell, and Yell to Unst. It is a case that stands well in its own right. It is not an easy thing. To see the opportunities that come from the construction of tunnels, look no further than to our neighbours to the north-west, in Faroe Islands. That is the sort of thing that should be Shetland’s price for playing host to the space industry. That is the sort of opportunity that we as a community should be entitled to exploit and to expect co-operation on, and support from, Government and elsewhere.

We are putting a lot of ourselves into this industry. This industry has great significance strategically for the United Kingdom, as well as economically and militarily, and in just about every other way imaginable. When the Minister replies, I hope he will acknowledge the significance of the contribution that Shetland stands to make to the rest of the United Kingdom, and that there is an understanding that, if we are to step up to the plate for the benefit of the rest of the United Kingdom, then the rest of the United Kingdom should acknowledge that responsibility.

16:53

[Steve Double (St Austell and Newquay) (Con)]

It is a pleasure to speak in this debate, Mrs Murray, and I congratulate my hon. Friend the Member for Wyre Forest (Mark Garnier) on securing it.

Something exciting has been happening in the space industry in Cornwall in recent years. We have seen the revival of the world-leading Goonhilly satellite tracking station, and I am incredibly proud to have Spaceport Cornwall, based at Newquay airport, in my constituency. It is something that I started championing before I became a Member of Parliament, way back in 2014, when the original call for sites for a spaceport went out. I worked very hard with Cornwall Council, the airport, the Government and the UK Space Agency to get the licence for the spaceport, and I was absolutely delighted that in January 2023 we had our first launch—well, almost. Frustratingly and sadly, due to a faulty $100 fuel filter, the final stage of the rocket burn failed, so the satellites did not reach their intended orbit.

However, that should not detract from the fact that, for Spaceport Cornwall, we played our part perfectly. Everything went well at the spaceport itself. Spaceport Cornwall remains the only licensed spaceport in Europe, and we are ready to launch again.

Also, there continues to be great interest in the facilities that we have, especially the satellite integration clean room—a world-class facility, and there are not many around the world—and our space systems operations facility, which is a dedicated office block on the spaceport site that continues to receive expressions of interest from people who want to locate there. Last month, Slingshot Aerospace announced that it will expand into the UK, with new offices in London and Cornwall, and just this month Space Ai, the Argentinian blockchain innovators, announced that it will set up new offices at the spaceport in Cornwall.

We continue to attract interest from around the world, and there is still a great deal of interest from launch operators who want to launch from Cornwall. There are advanced discussions going on with a number of potential partners that could see us launch satellites from Cornwall once again in the coming months.

In my view, the UK will struggle to fulfil its space sector ambitions without launch capabilities, and although it feels like all the attention is now on Scotland and the vertical launch site there, as the right hon. Member for Orkney and Shetland (Mr Carmichael) highlighted, it is important not to forget that in Cornwall we have a UK launch site that is licensed and ready to launch.

[Mr Carmichael]

The hon. Gentleman is making an important point. Inevitably in a competitive process, that kind of rivalry can emerge, but the real rivalry is between the UK space industry and the space industry elsewhere in Europe and the world. There must surely be a role for horizontal launch in Cornwall and for vertical launch in Shetland, and also at the Sutherland space site.

[Steve Double]

I am very grateful to the right hon. Gentleman, who makes the point that I was literally about to make—it is amazing how often that happens in debates. I am convinced that there is room for both. If the UK is really going to play the role that it aims to play, of being a world-leader in the space industry, we need both capabilities in the UK—vertical launch and horizontal launch. I am convinced that horizontal launch will very much be part of the future of space launch. As satellites become smaller, a horizontal launch will be the sustainable and more accessible option for many operators who want to put satellites into space.

Will the Minister ensure that his Department and the UK Space Agency do all they can to continue to support Spaceport Cornwall, and also work with us so that we can secure the partners to enable us to launch satellites from Cornwall once again in the months and years to come? The UK has an absolutely huge opportunity to stay ahead of the rest of Europe. As the right hon. Member for Orkney and Shetland pointed out, we are in a good position in the global space race to ensure that the UK can take advantage of that opportunity.

Spaceport Cornwall is a huge opportunity economically for the UK, and specifically for Cornwall, to attract investment and create the highly skilled and well-paid jobs that we desperately need in the Cornish economy. But for me, this has always been about something more than that. It has been about inspiring young Cornish people to believe that they can go and get the qualifications in science, technology, engineering and maths, and then have a career in the space industry while still living in Cornwall. That is what has driven me throughout this whole process.

With the establishment of the spaceport and the work that the team have done to engage with schools and colleges, we have already seen literally thousands of schoolchildren from the south-west come to see what is going on there and be inspired. That is so important, because one of the challenges we face with our young people in Cornwall is a lack of aspiration. There is no replacement for something on their doorstep that inspires them to say, “Yes, I can go on, get the qualifications and get a good career in this sector.” To that end, we were delighted that Cornwall secured the replica LauncherOne rocket, as a visible and tangible display: the centrepiece of an education centre that will inspire our young people and stimulate their interest in the space industry for generations to come.

There has been a bit of misunderstanding, in that the UK Space Agency seems to think that we are looking to build a tourist centre. We are not. It is an education centre, which will attract visitors and, in particular, inspire young people. Can the Minister look at what support his Department and the UK Space Agency can provide to Cornwall, so that we can create a world-class education centre? It will play a part in inspiring the next generation of scientists and engineers, not just in Cornwall and the south-west but across the whole country. We will need them in the UK if we are going to fulfil our ambition to continue to be a world leader in space.

These are exciting times. Just as Cornwall has always pioneered and led the way in new technology, whether that was the steam engine or Marconi and wireless communication, we again want to play our part in leading the UK into space launch.

[Mrs Sheryll Murray (in the Chair)]

I remind the SNP spokesperson and the shadow Minister that they have five minutes and the Minister has 10 minutes, because this is an hour-long debate. I call Carol Monaghan.

17:02

[Carol Monaghan (Glasgow North West) (SNP)]

It is a pleasure to serve under your chairmanship, Mrs Murray; it is fitting that you are in the Chair today, because you have been such a champion for Spaceport Cornwall —I hope that that might get me an extra minute or two—alongside the hon. Member for St Austell and Newquay (Steve Double). I want to correct him slightly. He talked about the failure of the launch, but the launch was actually successful; the failure came after. We have to take the positives from that, because this will be a learning process.

As a former teacher, I know that there are two things that get children really excited: dinosaurs and space. If we could get dinosaurs on space rockets, we would have everything sorted! The space sector is important for technology development, Earth observation and, increasingly, security and defence. Scotland plays a key role in that. We have already heard from the hon. Member for Wyre Forest (Mark Garnier), whom I congratulate on securing this important debate, about the importance of Glasgow in satellite manufacturing, with companies like Clyde Space and Alba Orbital. We also have space data analysis in both Glasgow and Edinburgh, as we have heard from the hon. Member for Edinburgh West (Christine Jardine).

What we are not so good at—and this is not just in Scotland but across the UK—is selling ourselves: telling people what we are doing in the industry. In Glasgow, Edinburgh and other places where there are space sectors, why do we not have big signs with rockets and propulsion units? That would tell young people that the space sector is here, alive and vibrant, and that there are jobs to be had in it. The Government could play a role in that.

We have heard about the five potential spaceports in Scotland. The right hon. Member for Orkney and Shetland (Mr Carmichael) talked about SaxaVord in Shetland, and we are looking forward to seeing the first vertical launch from that spaceport. We also have North Uist, A’Mhoine in Sutherland—the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned that—Machrihanish in Argyll, and of course Prestwick.

Scotland has great ambition in the sector. There is ability in our universities, so it is not a surprise or a coincidence that so many space companies have set up in Scotland. The ambitions are to capture a £4 billion market share of the sector by 2030 and an increase in employment in the space sector to 20,000. Those are ambitious targets, but they are achievable. To reach its full potential, the industry needs proper Government support. We have rejoined Horizon Europe, which is useful but there have been years outside Horizon Europe, and space talent now have to pay visa and NHS fees to come here, which is problematic.

Four years ago, the Government bought a £400 million stake in the satellite company OneWeb. On talking to the then Science and Technology Committee in 2021, Chris McLaughlin from OneWeb told the Committee that by 2024-25 we would be building satellites in the UK. We have not seen that yet, so I ask the Minister: we have heard about lots of companies doing great work, but how many jobs has OneWeb created in the UK for our £400 million stake? What steps have the Government taken to ensure that OneWeb’s second generation satellites will be built here in the UK? How are the Government raising awareness of the opportunities in the space sector, and what representations has the Minister made about reducing visa and NHS fees for those working in it?

There are real opportunities here. It is right that we inspire the next generation. To do so, we need physics teachers being paid proper wages. Without paying them proper wages, they will take their skills and work elsewhere. We need them here.

Scotland was famously at the heart of the first industrial revolution. As we enter a new era of industrial revolution, Scotland will once again play a key role in creating and developing new technologies in the space sector. I look forward to seeing more launches across the UK. I agree with the comments made today: there is room for horizontal and vertical. The more spaceports we have, the more we become a focus for the space industry across the world. I am sorry for the time I have taken, Mrs Murray—your tribute at the start took me extra seconds.

17:07

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairship, Mrs Murray, and to follow the hon. Member for Glasgow North West (Carol Monaghan). I congratulate the hon. Member for Wyre Forest (Mark Garnier) on securing the debate; as a member of the all-party parliamentary group for space, I can bear witness to what an excellent chair he is and what a great champion he is for the industry.

We all know that space is not just for the stars. Members from constituencies in Scotland, Northern Ireland and England have all emphasised—I am sure Members from Wales would, too—the potential and actual contribution that it makes to their economies. The right hon. Member for Orkney and Shetland (Mr Carmichael) and the hon. Member for St Austell and Newquay (Steve Double) particularly emphasised that point. The space industry impacts everybody and everything, from climate change monitoring and rural broadband to transport and agriculture. It is vital for security—just look at Ukraine—and for telecommunications.

In 2021 I spoke in a debate on space debris, which has been mentioned. That creates challenges and opportunities that literally go over most people’s heads. Labour’s first mission in Government is to secure the highest sustained growth in the G7, and space provides key opportunities for growth. Our aerospace research and development is a long-term endeavour, and our industrial strength is the result of decades of support by successive Governments—and Labour would build on that legacy.

Although there remain challenges to overcome, our regulators must be responsive to innovation in the space sector, from in-orbit manufacturing, as we have heard about, to space-based renewables. Labour’s regulatory innovation office would rewire regulators to support innovation, including the space sector. The office would set and monitor targets for approvals, benchmarked internationally, and give regulators steers from Labour’s industrial strategy, which would help ensure that space was seen as an industry and not as a project, as the hon. Member for Wyre Forest suggested. We would also support the Regulatory Horizons Council, with deadlines for the Government to respond to its work. On that subject, when the RHC reports on space, will the Minister commit now to a timeframe for the response from the Department for Science, Innovation and Technology? Will he also set out what specifically the Government are doing to support pro-innovation regulation for space?

As well as proper regulation, the industry needs greater stability from this Government, which has been in somewhat short supply, and not just at the macro level. We have seen the National Space Council that was set up by one Prime Minister cancelled by the next, and then reinstated by the one after that. We left the Galileo Project, and the U-turn on the rival system cost a further £60 million. The Science, Innovation and Technology Committee has also expressed concerns over the lack of coherence in the space strategy, and we heard about the ambiguity and the harmful speculation over the OneWeb deal after the Eutelsat merger, and the impact that has had.

The space industrial plan was three months late, and it is unclear how the Government see space relating to the key technologies in the science and technology framework, so could the Minister speak specifically to that point? I obviously welcome the Minister to his place, but he is the eighth Science Minister in five years. Does he concede that uncertainty is bad for business and bad for space? Labour’s industrial strategy, with our statutory industrial strategy council, will provide the stability and partnership that the industry needs, and enhance our sovereign capabilities, building on the work of the Satellite Applications Catapult and the UK Space Agency.

My final point is on skills, which Members have mentioned. The space industry is so important and it inspires the next generation of engineers. One of the reasons that I went into engineering was because I wanted to design spaceships. I never got to—not yet, but maybe that is still to come. Labour is proposing a national body that would be called Skills England, to provide leadership and bring together Government, businesses, training providers and unions to drive local skills needs. Expanding opportunities in this industry should create good jobs for people of all backgrounds. In February I visited Space Park Leicester, where the university, local government and industry work together to make space more accessible to all. Labour is pledging an action plan for diversity in STEM. I hope the Minister will support that, and I hope that we can see space as an opportunity for all.

17:13

[The Minister for Science, Research and Innovation (Andrew Griffith)]

It is a delight to be here under your chairmanship, Mrs Murray. I congratulate my hon. Friend the Member for Wyre Forest (Mark Garnier) on initiating this well-attended debate about the all-important UK space industry, as well as on his commitment to and leadership of the all-party parliamentary group. I am myself a former member, and I know how hard-working and formidable his connections are in this domain, together with my hon. Friend the Member for Morecambe and Lunesdale (David Morris).

This is a tremendous week for UK space, and I hope all Members will join me in congratulating astronaut Rosemary Coogan on achieving her space wings and graduating from astronaut school on Monday, together with two other British astronauts, John McFall and Meganne Christian. We hope they all have the opportunity in the coming years to leave this orbit behind and fly into space.

It has been enlightening to hear all the important points that hon. Members have raised in today’s debate, including on the way in which space and its attendant industries touch every single part of the United Kingdom. Today’s debate encapsulates the importance of the subject, from Spaceport Cornwall all the way to the opposite tip of these isles in Shetland and Orkney. There could not be any better examples than that.

Space is important to everybody and is an important economic activity. That is why the Government have a clear set of plans, which I can assure everyone that we are delivering upon daily. In 2021, we published the UK’s first ever cross-Government national space strategy. We are now spending approximately £650 million a year on space, which is an uplift of more than 70% on the amount we spent as a nation in 2018-19. I should be clear that this does not include all the space-related investment and spend on projects via Copernicus, UKRI and the Ministry of Defence.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

As the Minister knows, work continues apace at the Sutherland spaceport. It is interesting to note the recent announcement about the amount of investment that Orbex has attracted. Part of this is private money; when the markets speak, we listen. Returning to the remarks made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), it is about skills. The big challenge for us is how we will get the seedcorn we need to develop these homegrown skills. I suggest to the Minister that the Government should showcase proudly everything they are doing on this front, by holding space industry fairs—

[Mrs Sheryll Murray (in the Chair)]

Order. If this is supposed to be an intervention, it must be short.

[Jamie Stone]

Could I recommend that consideration is given to this in various parts, such as Caithness in my constituency?

[Andrew Griffith]

The hon. Gentleman is absolutely right to champion the spaceport in his constituency and to mention the importance of what is called private space, where companies such as Orbex are pioneering new ways of reaching for the stars. A number of hon. Members have also pointed out the significance of space in making an economic contribution and inspiring future generations. I will take away the hon. Gentleman’s wonderful suggestion of a space youth fair—let us see what we can do together with the UK Space Agency. My hon. Friend the Member for St Austell and Newquay (Steve Double) made exactly the same point about Spaceport Cornwall.

It is often pointed out that the United Kingdom could be more joined up in its space endeavours. The space council, in whichever iteration, brings together other Departments in orbit with the Ministry of Defence so that we can continue to punch above our weight. We have recently opened a joint space command centre for both civilian and military space.

My hon. Friend the Member for St Austell and Newquay mentioned his hard work before Spaceport Cornwall was even established, which is huge testimony to the work he does for his constituents across north Cornwall. He also mentioned Goonhilly and the very significant space cluster that exists in Cornwall. The Government remain extremely supportive of Spaceport Cornwall and all its endeavours, and the point is very well made about the launch capability of the United Kingdom, which I talk about to both the UK Space Agency and the Ministry of Defence in these uncertain times.

Moving to the other end of these isles, the right hon. Member for Orkney and Shetland (Mr Carmichael) talked about Shetland’s spaceport. It does indeed have formidable natural advantages, and so inspired by the opportunity, the Government resolve to do everything they can. That is why my right hon. Friend the Chancellor so significantly put an investment into SaxaVord, subject to reaching acceptable terms. In this very important week for defence spending, I offer this small vignette: the Labour party cut defence and closed RAF Saxa Vord, while this Conservative Government are investing in the future of Shetland. I hope that does not provoke an intervention from the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). [Interruption.] It is a fact. Facts sometimes can be provocative, but they are nevertheless facts.

We are bringing together many UK assets in space in the Harwell science and innovation campus space cluster. While it is also a significant contribution to levelling up, we have published not just the space industrial plan but plans for space clusters and space investment funds. I believe that the hon. Member for Newcastle upon Tyne Central and myself will both be speaking at the North West Space Cluster in June, which will give us both an opportunity to commit to the future of space in that important region of the United Kingdom. As my hon. Friend the Member for Wyre Forest raised a point about Adam Smith, space is at the heart of the comparative advantage and the productivity of this nation.

It is a busy world in space. It is going to be a banner year. We hope to see space launches from European soil from the first time. Just this week, the UK Space Agency announced an £8 million investment in the UK innovation & science seed fund. When my hon. Friend the Member for Wyre Forest opened the debate, he talked about the importance of getting capital to flow and of the connection with the City of London and finance. I hope that £8 million at the earliest stage—the seed and even the pre-seed stage—of the lifecycle could make a real contribution to growing the space supply chain and skills.

We will be responding to the Regulatory Horizons Council report on space well within the allotted timeframe. Before we break for the summer we will be publishing the space workforce skills plan, which the hon. Member for Newcastle upon Tyne Central raised. That is something very close to my heart and, I suspect, to the hearts of other Members. The hon. Member for Strangford (Jim Shannon) has left the Chamber, but Northern Ireland, as with all the regions, is an important part of the space sector. Its legacy and history in aerospace engineering is something that I firmly hope we can continue to bring to bear.

Time is running out and there is so much more we could talk about. We are off to the European Space Agency, and our commitment to that body remains as strong as ever.

[Carol Monaghan]

The Minister has not mentioned visa fees for space experts coming here, nor has he mentioned OneWeb.

[Andrew Griffith]

I would be delighted if the hon. Lady wanted to apply for another debate. I can see that there is a significant appetite to discuss some of these issues. The Government are very committed to maximising the economic and strategic advantage of OneWeb. It is a company that is based here. I have visited it just down the road in Shepherd’s Bush—I think it is still called Shepherd’s Bush. The new White City campus is where thousands of satellites, licensed and regulated out of the UK, are being flown as we speak and delivering all sorts of contributions to society. I am very supportive of the hon. Lady’s contribution to science, so I would love to engage further when we have more time. Mrs Murray is looking at me to say, “Hurry up.”

We will continue to work across this House through organisations such as the all-party parliamentary group, with industry, with the supply chain, and with our partners internationally, both through multilateral forums such as the European Space Agency and bilaterally. We will do all that with the objective of ensuring that the United Kingdom remains a strong spacefaring nation, and that the citizens of this country benefit from the prosperity and the inspiration that comes with space.

17:24

[Mark Garnier]

Thank you for overseeing this debate, Mrs Murray. It has been very enlightening, and I am conscious that Scotland is very well represented here. The space industry is fantastic, and I am grateful to the Minister for raising the points he did.

Launch is an interesting area: it is about logistics, but it is the inspirational path that people will look at. When we see rockets launching into space from the United Kingdom, that will be the point when everybody will get incredibly excited. I am grateful that we are doing extraordinarily well on space licensing here with the Civil Aviation Authority.

We have a fantastic opportunity in the space sector. I am an evangelist for the whole sector, and I think it is wonderful. I am grateful to the Minister for giving a commitment on the amount of money that will be invested into the UK space sector. That is absolutely crucial. Space is very difficult; it is very tricky. Getting things working in space requires a lot of investment in getting it up there. Commitment from the UK Government is exactly what we need to de-risk it and generate more private capital coming into the sector. Ultimately, we want it to be sponsored and funded entirely privately, unless the UK Government are a customer. We can get there, but the sector needs help to get that far.

I am conscious that we are about to have a bell for a vote any second now. Thank you very much, Mrs Murray.

Question put and agreed to.

Resolved,

That this House has considered the UK space industry.

17:26

Sitting adjourned.