Gambling Act 2005 (Monetary Limits for Lotteries) Bill
Friday 24th January 2025
(3 days, 19 hours ago)
Commons ChamberGambling Act 2005 (Monetary Limits for Lotteries) Bill View all Gambling Act 2005 (Monetary Limits for Lotteries) Bill Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Wendy Chamberlain (North East Fife) (LD)
I beg to move, That the Bill be now read a Second time.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I hope that those who just walked past the Member about to speak are going to apologise.
Wendy Chamberlain
This is a small and, on the surface, technical looking Bill, but one that would revolutionise charity fundraising in constituencies up and down the country. The key clause is 1(2), which would omit subsection (3) from section 99 of the Gambling Act 2005. The law that would be changed is a requirement placed on charity lotteries alone that caps the proceeds of their sales in any given year. Put another way, if someone is running a purely profit-driven lottery with no societal benefit, there are no caps on the number of tickets they can sell, but for charity lotteries—the most well-known being the People’s Postcode Lottery—there is a cap of £5 million per draw and £50 million over the course of a calendar year.
What clause 1(2) would do—indeed, this is the purpose of the whole Bill—is remove that cap and allow unlimited charitable fundraising from licensed lottery sales, because, of course, it is important that the proceeds of the lottery go to charities, rather than just creating bigger and bigger prize pots. As things stand, there is a limit on prizes of £25,000 or, if it is more, 10% of the proceeds of the lottery. The limit is therefore £500,000 with the current cap. All the stakeholders agree that we ought to amend section 99(4) of the 2005 Act so that it reads £500,000, to maintain the current prize levels. My Bill seeks the Government’s agreement to that and asks them to exercise their powers under clause 3 to make the relevant consequential provisions. That is the extent of the Bill—two small legislative changes with a huge consequence for charities across the UK.
There are approximately 500 charity lottery operators generating more than £450 million for good causes every year. As I have mentioned, the largest of these is the People’s Postcode Lottery; indeed, it is the one with the largest reach in every constituency. To date, the People’s Postcode Lottery has coped with the fact that demand exceeds the cap by establishing different postcode trusts that each operate on a thematic or geographical basis, but I would argue that there are three fundamental problems with that.
First, it is incredibly bureaucratic, with each trust having to have its own licences, monthly returns, registrations under Scottish, English and Welsh law, trustees, audit and risk committees, monthly and annual accounts, financial audits, websites and so on. That bureaucracy increases costs that could otherwise be used for good causes. Secondly, it is deeply inflexible, with the funds raised under each trust being required to be directed to the trust theme or geographical designation. Right now, we see Storm Éowyn causing destruction over Northern Ireland and Scotland. If there is damage or some sort of major accident causing loss of life, charities, as they always do, will step in to urgently provide support. However, the People’s Postcode Lottery, for example, would not be able to divert funds to assist with such efforts because of the current rules on trusts, as a result of the cap.
Thirdly, even if we accept the additional bureaucracy and the restrictions on where funds are deployed, at the end of the day, all the evidence still shows that fundraising is being limited by the caps, and in any case, their value is eroded by inflation. It is estimated that if we do nothing and keep the caps today, the charities supported by the People’s Postcode Lottery will lose out on £175 million over the next five years. I challenge anyone in the House to argue that the charities in their constituency would not benefit from that funding.
We already benefit from funding in North East Fife, and I would love to see more support for fantastic local initiatives. I will list some of the individual projects that have been supported in the last two years alone. St Agatha’s and St Andrews nurseries received funds for the cost of outdoor education equipment and training. There has been support for Scotland’s international poetry festival, StAnza, which takes place in St Andrews every year—I am looking forward to March’s programme. The Newburgh wellbeing choir, which provides support for people living with dementia, was able to hire professional singers trained in dementia inclusion to lead the group. Nurture Steps had a project funded to run support sessions for parents of young children with disabilities, and Veterans Tribe Scotland was supported on a significant project to reduce isolation, loneliness and anxiety among those who have served our country. There were funds allocated to maintain a community playing field at Dunbog community hall. In the late summer, I hope to go to the Cupar big weekend, which has also been supported by charity lotteries.
I could go on; there are countless projects. For example, the Cupar food bank and local brownie units receive funding from their central bodies, the Trussell Trust and Girlguiding, that also comes from charity lotteries.
Olly Glover (Didcot and Wantage) (LD)
I commend my hon. Friend for bringing the Bill before the House and for all her work to promote charity lotteries. Does she agree that, in addition to all the organisations she has listed in her constituency, the MS Therapy Centre in Milton Park, Chilton county primary school and the Letcombe Brook Project in my Oxfordshire constituency would benefit further if the Bill progresses?
Wendy Chamberlain
My hon. Friend has just exemplified what I said earlier. Every single one of us has probably attended drop-ins in Parliament and seen the benefit of charity lotteries in our local communities.
Fundraising is not a one-off thing. There will be other projects that were not successful in getting funding, or all the funding they needed, because it has not been available under the current system. I would like to bring in some of those charities’ voices directly. I hope the Minister is aware that before Christmas, over 100 charity leaders wrote to the Prime Minister asking him to support my Bill. They pointed to the absurdity of charity fundraising being restricted. They noted, and I have to agree, that
“supporting this vital reform would send a strong message on the Labour Government’s backing for, and belief in the third sector and a vibrant, well-funded society.”
I spoke with one the signatories of the letter, Children First, earlier this week. It said:
“In a financial climate that is more challenging than ever, we rely on charitable fundraising to deliver the essential services we provide to children and families across the country. Importantly,”—
and I think this is a very important point—
“the unrestricted nature of the funding means we are more able to use the money in the most effective way for children and families, bridging gaps in the ever-complex funding environment. Many of our services rely on a jigsaw of income, sometimes stretching to 20 different sources all with conditions, data gathering and reporting requirements. This, in turn, has an impact on how much we can do for the children and families we support as time and energy is locked into sustaining funding as opposed to supporting families.”
Mr Lee Dillon (Newbury) (LD)
My hon. Friend talks about the financial pressures that charities face. Volunteer Centre West Berkshire has said that charities in West Berkshire will need to find an additional £383,000 next year just to stand still, because of the increase to the minimum wage and national insurance contributions. With the Government causing charities concern through national insurance, does she agree that her Bill would allow them to ameliorate some of that harm?
Wendy Chamberlain
Yes, I absolutely agree. Indeed, in a Westminster Hall debate just last week, where the shadow Minister, the hon. Member for Isle of Wight East (Joe Robertson), also spoke, I highlighted that very thing: the national insurance increase will hurt charities, and there is an opportunity for the Government, through my Bill, to ameliorate some of that.
Children First also said that it understands that technical barriers place limits on the way that charity lotteries provide funds and that it supports calls to remove the cap. There are about 170,000 charities across the UK. Of course, not all of them want or need charity funding, but many thousands do.
There are many reasons why the House should support the Bill. I understand some of the Government’s concerns. I have been told that they are worried about the impact on the national lottery, considering the Secretary of State’s statutory obligation to maximise its success. However, I would argue that there is no evidence to suggest there is a detrimental impact on the national lottery from charity lotteries. The Gambling Commission has investigated this three times in the last 15 years, most recently in October 2017, and found no statistically significant effect of charity lotteries on national lottery sales. That was confirmed again in 2022 in an impact assessment by Regulus Partners.
My goal with the Bill is to keep the distinct nature of the national lottery by protecting its much larger prize pots. This weekend, the lotto’s prize is £4 million, while the Euromillions’ is £83 million. In changing the law on sales, we want to change the current price cap to keep the prize maximum at £500,000. It is a very different ball game, and the Bill supports the evidence that players of one lottery often play the other as well.
I know that the Government are awaiting updated research. I suggest that the Government choose to progress my Bill today and consider the research at Committee stage or later. From my conversations with the Minister, I understand that the Government are determined to hold their current position that they want to see the evidence first. I hope that the Minister will confirm the commitment to make the research public when it is received and to update the House on the Government’s review of the research before the summer recess. I hope she will then set out any legislative action the Government are prepared to take.
I know that the Minister supported these reforms in opposition and is therefore sympathetic to the purpose of the Bill. I am sure she is aware of the money charities in her constituency have benefited from and will continue to benefit from. The Station House Community Association in her constituency notes the following in a project description:
“this grant has supported our running costs—just like everyone else all our bills have increased and we need to cover these costs.”
As my hon. Friend the Member for Newbury (Mr Dillon) highlighted, this is an issue we hear everywhere, particularly now that charities are faced with the additional cost of national insurance contributions. Increased fundraising to counterbalance these additional costs will be increasingly vital over the years ahead if charitable projects that we all champion are to survive. The Bill offers a way for the Government to support such charities, and at no cost to the taxpayer. It is a win-win in my view.
Before I finish, I would like to touch on gambling harms. I am a strong believer in reforms to the sector to protect people from problem gambling. Public Health England has said that there are more than 400 gambling-related suicides a year and that it costs the UK £1.4 billion. Extrapolation of this data by Gambling with Lives suggests that up to 650 gambling-related suicides take place across the UK each year. My party wants to see a compulsory levy on gambling companies to fund research, education, treatment, restrictions on advertising and the establishment of a gambling ombudsman.
The seriousness of addictive, problem gambling cannot be underestimated. I want to outline the steps that the People’s Postcode Lottery takes to tackle it. Players sign up to a monthly subscription to be entered into the draws. The number of monthly subscriptions for a single player is limited, and draws take place throughout the month with results published accordingly. One of the most influential factors in the development of gambling problems is the ability to gamble in real time over and over again. Charity lotteries do not allow real-time gambling, so it takes away the ability to chase a perceived high. Lotteries are widely recognised as being low-risk games compared to other forms of gambling.
To conclude, I feel confident that there are only benefits to the Bill. There are benefits to the charity sector, which is facing unprecedented pressures, to local charities and community projects, and ultimately to all of our constituents.
Joe Robertson (Isle of Wight East) (Con)
It is a pleasure to speak on behalf of His Majesty’s loyal Opposition on this important matter. I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on bringing forward this Bill. She has spoken with passion and knowledge on an issue that she clearly knows and cares much about. I also thank her for supporting my Westminster Hall debate on a related issue that is particularly important for charities: the impact of this Government’s national insurance increases.
The simple and well-intentioned aim behind the Bill is to allow charities to raise more money to deliver on their charitable aims, and the hon. Lady seeks to do that by disposing of the limits imposed by the Gambling Act 2005. She has already referred to the People’s Postcode Lottery, and we have heard how much it does to support charities in our constituencies up and down the country, including in mine on the Isle of Wight. Who would not want to support charities such as the People’s Postcode Lottery?
The leading argument against restricting the cap on charity lotteries is that they might then compete with the national lottery, which is not subject to this cap. That is a legitimate concern. It is in all our interests that the national lottery continues to thrive, but research has been done on competition between charity lotteries and the national lottery. In 2017, the Gambling Commission found
“no statistically significant effect of Charity Lotteries affecting National Lottery sales.”
Indeed, it remarked that the national lottery and society lotteries have continued to grow side by side. Consequently, the previous Conservative Government partially liberalised charity lottery sales and prize limits in 2020. Two years later, the Digital, Culture, Media and Sport Committee took evidence on the matter, and its subsequent report, “What next for the National Lottery?”, said:
“We do not consider that society lotteries pose a threat to the charitable giving of the National Lottery, in line with the views of the Gambling Commission and the Department.”
The Conservatives support the principle of allowing charities to raise more money, including from society lotteries, and reducing the regulatory burden placed upon them. The previous Government commissioned independent research, as the hon. Member has referred to, and she asked some questions of the Minister, which I endorse. Can the Minister say whether the research has been received at the Department, and will she give an indication of its summary?
Before finishing, I will briefly discuss the importance of charities’ work in delivering £17 billion of public services each year, without which the public sector could not do its work. This Government bear greater responsibility to support charities through additional fundraising than might otherwise have been the case, because they are taking an estimated £1.4 billion from charities through their increases to national insurance contributions in the Budget. The Government know that will damage the public services that charities deliver. That is why they exempted the NHS, but they provided no such exemption for charities delivering health and social care, charities supporting people who need housing, charities trying to lift people out of poverty, charities trying to cure disease, and charities supporting victims of violence against women and girls.
I urge the Government to act. They owe charities the support and they owe charities compensation for the money they are taking off them in extra tax. This Bill would just be a start. I thank the hon. Member once again for bringing this important issue before the House, and I wish her every success in realising the aims and objectives behind the Bill.
Chris Vince (Harlow) (Lab/Co-op)
I thank the hon. Member for North East Fife (Wendy Chamberlain) for bringing forward this private Member’s Bill. We all recognise what the Bill is trying to achieve and agree that the Government should look at a review into this area. I also thank her for her recognition of the harms of gambling. I have friends who are recovering gambling addicts, and I know what a huge and damaging impact it has had on their lives.
I want to take a moment to recognise some of the charities in my constituency, many of which I have had first-hand experience of working with. I had the honour of working for Streets to Homes, a charity that supports homeless people, rough sleepers and the hidden homeless. There is also Action for Family Carers—a speech does not go by without me mentioning young carers in this place—and Razed Roof, an inclusive theatre company that I had the pleasure of visiting yesterday. In short, it gives adults with learning difficulties the opportunity not only to socialise, but to thrive and be a huge part of the community. I look forward to its performance at the Holocaust Memorial Day service on Sunday.
I will quickly mention YCT—another charity of which I am a trustee—which provides counselling support to young people in my constituency. The problem with mentioning charities in our constituencies is that there is always a danger of missing one out—I am sure that I will get an email later. I will quickly mention Livewire, Butterfly Effect Wellbeing, Rainbow Services and, as mentioned by the hon. Member for North East Fife, the Michael Roberts Charitable Trust.
I will talk briefly about my issues with funding for charities, having worked in the charity sector myself. When charities look at getting funding, that funding is often very short term, and funding organisations always talk about new projects yet fail to recognise that quite a lot of charities just need ongoing funding for the important work they already do. I really emphasise the importance of looking at that.
I will finish by quoting my favourite Prime Minister and—controversially—disagreeing with him.
Chris Vince
Members will work it out. He once said:
“Charity is a cold grey loveless thing.”
We can all agree that we live in a very different world from when Clement Attlee was Prime Minister. The charities in my constituency of Harlow do a great deal of important work—I know that as I have been part of that myself—and I think we all agree that how they are funded needs to be looked at. I look forward to hearing the Minister’s response, when she can talk us through that.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I thank the hon. Member for North East Fife (Wendy Chamberlain) for bringing forward this motion. Society lotteries provide vital funding for hundreds of charities, community groups and sports clubs. Indeed, I have seen the impact of that in my own constituency of Barnsley South, where society lotteries such as the People’s Postcode Lottery are benefiting great local causes, from DIAL, which supports disabled people, to Magic Breakfast, which provides kids with a meal to start the school day. In that context, the Government have a clear message: we want society lotteries to thrive.
In the interests of time, I want to be clear from the outset that the Government have a clear commitment to update the House on our position with regard to society lotteries by the summer recess, once we are in receipt of the independent research, which I will come to discuss if there is time. We are not yet in receipt of the final research, but we understand that that will be here by the end of next month. I make that clear commitment to update the House by the summer recess—we have had discussions to that effect.
As hon. Members will know, there have long been mandatory conditions and limits on sales and prizes for society lotteries. Those have been reviewed and adjusted before, most recently by the previous Government, who introduced new sales limits for society lotteries, increasing the annual ticket sales limit fivefold, from £10 million to £50 million. Of course, umbrella lottery organisations may also operate with multiple licences: for example, the People’s Postcode Lottery currently holds 20 operator licences and is therefore able to sell a combined total of £1 billion-worth of tickets each year.
I acknowledge the strength of feeling behind the proposal in the Bill to remove the annual sales limits for society lotteries. I would like to speak briefly about some of the factors that the Government will consider for potential reform. Of course, we must reflect on where the sector is now and where it may be in future. The current picture is broadly positive, with recent evidence showing that society lotteries have continued to grow in popularity since the limits were changed in 2020. The vast majority of society lotteries are also currently operating well within existing limits.
However, the Government do recognise the challenge for large-scale umbrella lotteries, some of which have multiple licences for multiple trusts, and we know that a small number of those may reach a limit within the following year and that there are costs associated with operating in that way. We do not take this lightly, but it is worth noting that the current system does not hinder overall sales of society lottery tickets for those organisations.
Further to that, our support for lotteries raising as much money as possible is unwavering. We are also keen to better understand how the growth in sales is translating into the investment in good causes. The current picture suggests that higher sales have not led to an equivalent increase in funding for good causes, and there may be room to improve that.
A second element is the research that I referenced. The current evidence and data show that society lotteries are growing in popularity and revenue. The Government have commissioned independent research into the lotteries market as a whole to help us strengthen that evidence base ahead of any further review of limits. This research—