Draft Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024
Draft Gambling Levy Regulations 2025
(2 days, 2 hours ago)
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The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I beg to move,
That the Committee has considered the draft Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024.
It is a pleasure to serve under your chairmanship, Mr Twigg. I begin by referring to my entry in the Register of Members’ Financial Interests, having taken part in a charity bet in April 2024.
Two decades have passed since the Gambling Act 2005 was introduced. Leading gambling firms operating in this country are now some of the world’s most successful companies, with cutting-edge technological capabilities and deep insight into customer behaviour. The gambling industry and gambling behaviour have since undergone monumental change, from the smartphone to the huge increases in online gambling.
The 2023 gambling White Paper laid the foundations for what is before us today, as we introduce draft regulations on stake limits on online slots. We will later discuss the statutory gambling levy, which will fund research, prevention and treatment. The Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024 will introduce statutory maximum stake limits on online slot games of £5 per game cycle for adults aged 25 and over, and £2 per game cycle for young adults aged 18 to 24. Online slots are the highest-risk gambling product. They have the highest rate of binge play and the highest average losses of any online product. They are associated with long playing sessions and high levels of use by people experiencing gambling harm. Online slots are also the fastest growing gambling product. The online gambling market is worth around £6.9 billion in gross gambling yield, £3.6 billion of which comes from slots.
In the past five years, that yield has grown by 61% and growth is not slowing down. However, there are currently no statutory stake limits for online slot games, unlike their land-based counterparts. As slots’ popularity grows, so does the risk for vulnerable people. Now is the time to act and stem the growing tide of unaffordable losses for people most at risk of gambling harm. We have designed these stake limits to target those most at risk of harm, while ensuring that the impact on operators is proportionate.
The lower stake limit for younger adults is an important intervention, as our research has shown that younger people may be at elevated risk of gambling harm. Young adults aged 18 to 24 have the highest problem gambling rates of any age group. This elevated risk of harm is compounded by the lower average disposable income of that group.
The industry trade body, the Betting and Gaming Council, welcomed the decision to introduce stake limits. If the regulations are agreed, there will be a transitional period to ensure that gambling operators have sufficient time to implement the changes. Operators will have six weeks from the day that the instrument is made to implement a £5 stake limit. They will then have a further six weeks to implement the £2 stake limit for younger adults. During that time, the £5 limit will apply to all adults.
These stake limits build on other rules introduced by the Gambling Commission in 2021 that make online slots safer to play. These requirements slowed the speed of play to a minimum of 2.5 seconds per spin. A raft of rules will reduce play intensity. These include a ban on autoplay features and features that speed up the display of results or that can give the illusion of control, such as turbo or slam stops. The evidence shows that such features increase the risk of harm to customers. That concludes my comments on the first set of regulations.
Mr Louie French (Old Bexley and Sidcup) (Con)
It is always a pleasure to serve under your chairmanship, Mr Twigg. Almost a year ago, the previous Conservative Government, having commissioned the Gambling Act review in 2020 and published the White Paper in 2023, announced the introduction of a new £2 maximum stake for under-25s playing online, as well as a £5 limit for those aged over 25. The previous Government took that decision following a specific 10-week consultation period in which most respondents agreed with the proposals in the gambling White Paper to introduce statutory limits for online slot games. That was, as Members know, to help counter the specific increased risk of harm and life-changing losses from online slot games that had developed since the introduction of the Gambling Act 2005. It was also to help level the playing field between land-based operators and those based online, as the Minister has acknowledged.
After more than a decade and a half, all parties recognised that the Gambling Act was analogue in a digital age and that reforms were needed. Unlike what the Labour Government are announcing today, the reforms proposed by the Conservative Government were relatively modest and sought to balance the need to better support those at risk of gambling harms with the safe enjoyment of gambling, as experienced by millions across the country in a sector that is a key contributor to our economy. That is the point in which I want to press the Minister with this first set of regulations.
It appears that the Government are continuing to miss the opportunity to promote growth in the sector and to engage in the modernisation of casinos more broadly. I have raised the issue previously, and, trying to be constructive in opposition, I do so again now. As the Minister knows, the White Paper set out a number of modest but important modernisation measures for land-based casinos to allow operators to continue to deliver a first-class leisure and entertainment experience offer to their customers. That included reforms to the formula of what type and quantity of machines venues could have, as well as allowing sports betting for all casinos, which I know from my own travels is common in other countries.
I have met a range of operators from across the across the country already and it is clear that there is still a desire to invest in those businesses, despite the significant headwinds and operational costs coming from the Chancellor’s Budget, which is pushing many into the red. Are the Government planning to reintroduce the draft instrument on casino modernisation, which I understand had already been drafted by the Department before the election? If so, when can we expect that, and if not, why not?
On the same theme of growth and investment, in light of the Chancellor’s rather strange comments that the Government will be reaching out to state regulators for ideas for growth, what discussion has the Minister’s Department had with the Gambling Commission on ideas for growth? Finally, what review mechanism will the Government put in place to ensure that these changes to online stakes do not further fuel the growth in the online black market? I know that many Members will share my concerns about this growth in the gambling black market, which I am afraid to say I did warn about both before and since taking up this brief.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I will keep my intervention short. First, it is a significant pleasure to serve under your chairmanship, Mr Twigg. As chairman of the all-party parliamentary group on gambling reform, it is a great pleasure to be here when the regulations will hopefully be brought in at last.
I welcome the long-awaited establishment of a maximum staking limit for online slots, a measure for which the all-party parliamentary group has long campaigned. It is long overdue, and, while we welcome its introduction, the one point I would like to make is that £5 is simply too high. We have a problem here, because we have physical shops on the high street where stakes will be limited to £2, yet we have a £5 limit for online. The online side will grow rapidly, and it has the greatest attraction for those who get hooked on gambling. Online slots are available anytime, can be marketed to every current and potential account holder and offer unrestricted access to high-speed and addictive products. That was clear in all the evidence. Although I welcome this move, I make clear that the stake limits will have to be reviewed quickly, because we cannot have two different stake limits that will at the end of the day punish those on the high street while supporting those online. That is the wrong way round.
The facts are clear. Online slots account for more than half of gambling revenues online, and 45% of those who engage with them are classed as either problem gamblers or at risk. A report on harm to national gambling treatment service clients by location shows that 38.1% report harm online. There is a multitude of evidence about the great harms of online slots gambling, and I therefore suggest to the Government that while they are doing the right thing, they should get it perfect, rather than just doing it. The truth is that the stake limit has to be at the same level as the existing £2. What scope will the Minister build into these regulations to adjust the maximum stake, given the risks of the £5 limit? Will she review the limit, given the clear indication that it is too high? That is a cross-party view of the all-party parliamentary group, and not mine alone.
The draft Gambling Levy Regulations are important. That levy was an important feature of the previous Government’s White Paper, and it is a damning indictment of the gambling industry that this levy—
The Chair
Order. You must stick to the first set of regulations. Have you finished your comments on them?
Cameron Thomas (Tewkesbury) (LD)
The Liberal Democrats support the regulations. The stake limit will help to address gambling-related harm associated with online slots, which have rapid, repetitive play patterns and high average losses per customer. It reflects a commitment to tackling problem gambling and is a progressive step in the right direction, strengthening player protection.
Combating problem gambling is a topic the Liberal Democrats have campaigned on consistently. It is a serious public health issue, and it is vital that we take robust action to mitigate the risks. According to the latest Public Health England report on gambling, approximately 246,000 people are problem gamblers and 2.2 million are at risk.
The introduction of the statutory levy is a welcome step, as are the regulations, but I urge the Government to go further. We urgently need action to tackle pervasive gambling advertising and sponsorship. We also need action on black market gambling, and we need gaming products such as loot boxes to be regulated as gambling products to protect children from gambling harms.
Fundamentally, we need a commitment from Government to treat the issue as the public health issue it clearly is. That was the approach agreed in the 2023 White Paper, and it must give primacy to protecting the public from gambling harms. My party has also called for the remote gaming duty to be doubled, and I urge the Government to look carefully at that proposal.
It is evident that urgent action is needed, and the regulations are an important step forward. Therefore, the Liberal Democrats support them.
Jim Allister (North Antrim) (TUV)
It is a pleasure to serve under you, Mr Twigg.
Could I take this opportunity to draw attention to a conundrum that exists in my part of the United Kingdom? Any company in Northern Ireland that wishes to advertise online gambling needs a licence from the Gambling Commission. None the less, the Gambling Commission insists that it should not perform any regulatory function in Northern Ireland. In consequence, there is no regulatory function and no control of online gambling, which is a growth industry. However, it has been established that Northern Ireland has an above average problem with gambling.
It could be said that gambling is a devolved matter; indeed, to the extent that I have set out, it is. However, the Northern Ireland Executive have utterly failed to establish any regulatory control, and the present legislation allows regulation only of terrestrial gambling, not of online gambling. I therefore ask the Minister to impress on the Department for Communities in Northern Ireland the fact that it needs to get up to speed and to bring in regulation to control online gambling and terrestrial gambling. Yesterday, in this vacuum of no regulation and no oversight, the Northern Ireland Assembly increased some maximum stakes. That is untenable.
Stephanie Peacock
I am grateful to all Members who have contributed to the debate, and of course I began by acknowledging that the 2023 White Paper, introduced under the previous Government, lays the foundations for what we are discussing.
I will briefly respond to the points that have been made. The shadow Minister raised some questions about casinos and I am very aware of the relatively modest changes being asked for by the casino sector. The Government support the measures outlined in the White Paper, and we will provide an update as soon as possible. I am grateful to the shadow Minister for his questions.
I thank the right hon. Member for Chingford and Woodford Green, who has been a doughty campaigner and done a lot of work on this issue. I appreciate his points, and he obviously believes that £5 is too high. It is worth considering that the average stake is 60p and that very few people actually bet £5. However, we know that those who do reach that higher limit are at higher risk. This statutory instrument, and indeed the White Paper as a whole, aim to balance tackling gambling harms with supporting industry. That is why we have gone for £2 and £5.
I acknowledge the comments from the Liberal Democrat spokesperson, the hon. Member for Tewkesbury (Cameron Thomas), about advertising. We have voluntary sports codes on advertising, which we can perhaps touch on in discussing the second set of regulations, when we can talk about prevention and research. With everything in gambling, there is the risk that people will go to the black market, and we do not want that to happen. That is why this is a proportionate and balanced SI.
I am familiar with loot boxes. I believe it was Sky News that did an investigation back in December, and I stand to be corrected if I have got my media organisation wrong. However, I am aware of the concerns around loot boxes. Some research has been commissioned, and we will provide an update in due course. We are aware of these new novel products and we take them into consideration.
I thank the hon. and learned Member for North Antrim for his questions and comments. We recognise our shared interest in and commitment to reducing gambling harm across the whole United Kingdom and we engage with the Northern Ireland Executive where necessary. If it would be helpful, I will ask the Minister for Gambling to write to him on his specific points. That might be useful on some of the points that he raised.
As I outlined in my opening remarks, we believe that online slot stake limits are an important and proportionate intervention aimed at the people most at risk of gambling-related harm. We think this is timely regulation, as online slot games continue to grow in popularity and gross gambling yield. The limits will bolster safer gaming design requirements to ensure that online slot games are safer to play than ever. Online slot stakes limits should serve as a maximum stake that customers can choose to stake up to, rather than as a new default that operators can drive customers towards. Operators currently offer stakes from as little as 1p a spin, and we would expect a range of staking options far below the maximum to remain available.
Finally, a number of questions were asked about when the limits will be reviewed. The Secretary of State will review these limits within five years.
Question put and agreed to.
Draft Gambling Levy Regulations 2025
Stephanie Peacock
I beg to move,
That the Committee has considered the draft Gambling Levy Regulations 2025.
It is a pleasure to serve under your chairship again, Mr Twigg. We move on to discuss the proposed draft regulations for a statutory gambling levy. From April this year, all licensed operators will be required to pay an annual levy to the Gambling Commission. The rates at which licensed operators pay the levy are set down in legislation, and licensees are at risk of losing their licence if they do not pay. We are clear that the statutory levy is a key part of our agenda for change. It is crucial to making our vision for the future of research, prevention and treatment of gambling harm a reality.
I recognise that the statutory instrument is narrowly focused on the payment of the levy, and that is why our response to the statutory levy consultation, published last November, presented a fuller picture of the future system and a sense of our ambition. The levy represents a watershed moment as well as a significant uplift in the investment dedicated to this area, greater Government oversight and a renewed commitment to further understanding, tackling and treating gambling harm.
The levy is not about change for change’s sake, and we want to build on the successes of the current system. The significant contribution that the gambling industry has made to supporting research, prevention and treatment since the introduction of the Gambling Act 2005 has been crucial and has allowed an expansion of the support and treatment options available for those in need. However, we now need a sustainable and equitable funding system so that all licensed gambling operators pay a fair share.
The levy provides us with an opportunity and the resources to put in place the right projects and services, with clear objectives and robust governance. We want a world-leading funding and commissioning system to reduce gambling-related harm. For that, we are mobilising existing expertise and infrastructure to move at pace, working with UK Research and Innovation, NHS England, appropriate bodies for Scotland and Wales, the Gambling Commission and the third sector. We are transforming the current system to deliver better access, outcomes and services for people across our country.
As Members will know, the Government’s next steps on prevention were not included in our recent publication. Prevention is crucial for future efforts to reduce gambling harm, but it is also a complex area and it is right we have taken the time to get the decision right. Developing a comprehensive approach to prevention with the right mix of projects and services is, as I have said, complex, but we expect to publish our decision soon, and I am confident that the Government will confirm their decision ahead of the debate on these regulations in the other House.
For the first time, sustainable ringfenced funding will be used across Great Britain for vital treatment, as well as to better understand the causes of harm and early intervention to support greater awareness and reduce stigma. Robust Government oversight will also ensure that the levy funding has an impact on the ground. The regulations represent the beginning of a new phase for gambling harm reduction, where people in our country are better protected and aware of the risks of harmful gambling. The levy is a crucial first step to delivering that, and I look forward to discussing this further. I commend the draft regulations to the Committee.
Mr French
It is still a pleasure to serve under your chairmanship today, Mr Twigg. Unfortunately, that pleasure does not extend to the regulations that we are now discussing. The Labour Government have spectacularly managed to take a set of draft regulations that were largely settled and agreed on, after significant engagement by the previous Department for Culture, Media and Sport ministerial team prior to the election, and got them to the position we are in today, where there are major concerns across the sector about their impact and unintended consequences.
Before I highlight some of those concerns to the House today, and in the spirit of trying to be constructive in opposition, I urge the Government and the Minister, who I have a lot of time and respect for—I know she is covering today—to address a clear structural problem with how they are approaching this important policy area. As has been highlighted in some of the responses already, having the Minister for Gambling in the other place working part-time on major gambling reforms is clearly not working. While most Governments will face criticism at times for not listening, it is remarkable that in almost every conversation that the shadow DCMS team has with people across the sector, we are being told consistently that the Government are not even engaging, let alone listening. That major concern keeps coming up and is a constant theme. The Government have successfully, and remarkably, managed to unite the anti-gambling and pro-gambling sides of the sector, and everyone in between, in their concerns about the lack of engagement. Separate to the regulations we are discussing today, I ask the Minister to take that away and feed it back, perhaps through the Whips, because it is quite a feat.
Sadly, that failure to engage properly is why I believe there are a number of issues with the redrafted regulations in front of us today. First, in the broader economic context, Members might have seen the recent “Sunday Times Tax List 2025”, which highlighted what many of us already knew: the gambling industry already pays a lot of tax. In fact, the Office for Budget Responsibility estimates that in the year 2024-25, betting and gaming duties alone will raise £3.6 billion. That represents roughly 0.3% of all receipts, and is equivalent to £124 per household and 0.1% of national income. The Betting and Gaming Council estimates that its members contribute £6.8 billion to the economy each year, as well as supporting more than 109,000 jobs across the country. Although I understand that some might wish to bash the bookies, we must have a sensible debate about the collective impact of Labour’s tax rises on the sector, the thousands of jobs across the country now being put at risk and the potential unintended consequences for charities, sports such as British horseracing and the growth of the black market, as I have referenced already.
Betting revenues from horseracing are evidently falling because of flawed affordability checks, and the economic backdrop today is fundamentally bleaker because of Labour’s Budget, which adds to the broader sector concerns as the Government seek to squeeze even more money out of firms. We all must be clear that the levies being discussed will further push up costs for businesses and, when taken with Labour’s tax rises as a whole, will severely restrict or even remove the viability of smaller gambling operators and important community assets such as bingo halls and racecourses across the country.
That brings me to my next point: the scope of the amended draft regulations, which has been expanded from the previous proposals. There are deep sector concerns about who this Labour Government are targeting by expanding the scope of the regulations. For example, regulation 2 brings into scope trackside betting at greyhound and horseracing racecourses, while regulation 3 sets the minimum levy payment threshold, which had previously been agreed at £500,000 a year. However, the Government have gone much further, reducing the minimum threshold to only £10 for small operators, after which point they would need to start paying the mandatory levy and doing the administration that goes alongside that.
Unsurprisingly, the move has caused great alarm among independent and smaller firms, which are being brought into the scope of liability for levy payments for the first time. Independent bingo hall operators have also been brought into scope. Under regulation 4, these businesses will be charged at 0.2%, which I understand is double what had been proposed previously. If I am interpreting the proposed regulations correctly, they will see small independent bookmakers at courses around the country charged double the rate of pooled betting operators, such as the Tote. Can the Minister confirm whether my understanding is correct on that point?
The Government’s new proposals have also lumped independent high street bookmakers with a land-based retail rate of 0.5%, which is also up from the previous proposal of 0.4%. That means that small independent betting shops will pay an additional £1,000 a shop and an additional £500,000 in total. The Betting and Gaming Council has said that it is a real “hammer blow” to the 500 small independent bookmakers in the UK, which employ more than 2,500 people, undoubtedly leading to closures and job losses.
As if it is not bad enough that important community assets such as bingo halls and racecourses are facing a Labour battering, community lotteries are also expressing concerns about the risk of being charged the levy twice, because of how it has been drafted. That would negatively affect distributions to good causes.
I understand that the Department considered charging the levy at 0% for society lottery operators but concluded that that would amount to an exemption and would carry significant legal risks. Has a new impact assessment been carried out to analyse in greater detail the risks and concerns that are being expressed? Even if some Members are comfortable with bashing the bookies, they surely cannot be comfortable with the unintended consequences and risks resulting from less funding for good causes and a loss of jobs and community assets.
My final concern is about the potential impact on the charities and organisations that are already doing fantastic work to support those suffering with gambling addiction. As Members should already know, through the existing voluntary scheme, although it is far from perfect, hundreds of millions of pounds of contributions from gambling firms have been invested to help to fund a network of specialist charities and organisations that support those who need help. I understand that that network currently cares for roughly 85% of all problem gamblers receiving treatment in Britain, but there are major concerns and great uncertainty about how and to what extent that care can continue as the Government seek to change the system from voluntary to statutory.
First, on short-term funding, our understanding is that the regulations will lead to some firms paying a double levy this year. Ministers have been clear that they expect the industry to pay voluntary contributions this financial year, and that if these regulations come into effect, the industry will also be required to make payments on profits backdated to 1 April last year. The Minister must know that, faced with being charged twice in the same calendar year, many firms in the industry will look to minimise their voluntary payments for this financial year.
Moreover, according to regulation 4(6), the levy due this October for the first period is 33% higher than usual, so the Government not only are asking firms to pay twice in a year, but have added up front, in the fine print, an extra third on to the statutory levy. That clearly risks removing millions of pounds in vital funding from the treatment network before October when the first statutory levy payment is due. In the Minister’s response, can she tell us what risk assessment her Department has carried out on that potential drop in voluntary contributions and funding in the short term, and how many people she thinks will lose out on treatment in that time?
The new statutory levy also raises many questions and great uncertainty about how the money will be spent and the process behind the decision making, which has again been fuelled by a lack of engagement by the Government. The Minister might want to get a pen out—I can see she has one now. Who in Government will be setting the strategic direction and who is ultimately accountable for any issues arising with the levy? Is it Ministers in the Department for Culture, Media and Sport, the Department of Health and Social Care or the Treasury?
Can the Minister please confirm what target percentage will be spent on prevention, treatment and support services, and what percentage the Government expect to be spent on research? How will the Government ensure that research is not duplicated at the cost of treatment and prevention? How will services be commissioned and value for money ensured? If commissioning will primarily be led by the NHS, what support will be provided to charities to ensure that any future tendering processes do not risk their expertise being lost? Who decides who sits on any advisory boards for the levy and will the Government ensure that all views are being heard rather than just those of vested interests?
Will the Government ensure that charities funded by the voluntary levy are not frozen out by the more anti-gambling parts of the sector? Are the Government looking to expand residential treatment, currently provided by excellent charities such as Gordon Moody? The Minister’s Department has announced that the Gambling Commission will not have carte blanche for its approach, which will be a relief to many in the sector, but what does that mean in practice? How will the Government hold the commission to account?
Those are all serious concerns. I could go on, which highlights the scale of uncertainty hanging over the sector and, sadly, the lack of engagement and clarity from the new Labour Government to date. They are a loose horse with bad form and no jockey to give them strategic direction. On many of these issues, the Government are now asking us to take a leap into the dark with them—comparable with jumping Becher’s Brook blindfolded knowing it is odds on that there will be a very painful landing.
I am afraid that without some meaningful answers today, without evidence that a thorough and up-to-date impact assessment has been carried out on all these issues, and without changes to the draft regulations, we cannot support these policies. We know that they will do further damage to jobs and the industry, put community assets such as bingo halls and racecourses at risk of closure, and risk harming the very people and charities that the statutory levy is supposed to support.
Sir Iain Duncan Smith
I want to make a very simple point. I do not agree with the position that my hon. Friend the Member for Old Bexley and Sidcup has taken. We spent a number of years debating this question with our Government, and we eventually came to this conclusion and the proposal went into the White Paper. Yes, of course there are issues, but are they worth our trying to block the idea of the statutory levy? The answer is no. Research will be vital to understand how many people are affected, how they are affected, and the extensions in effect on those that have suffered. I have met an endless number of families who have been ripped apart by early suicides, by problems and by bankruptcies, because, unbeknown to them, somebody in the family was addicted to gambling to the extent that, late at night, they basically trashed their own family.
This is where we intended to go. It was my whole original drive, and it was backed by the evidence-based findings of the then all-party parliamentary group on gambling related harm. I understand many of the points that my hon. Friend made, some of which have been reiterated endlessly by the gambling industry, but may I say one thing about trusting the gambling industry? I would not place much store on that. It had years to get the voluntary levy right. The good ones contributed; the bad ones did not—or when they did, it was peanuts. The statutory levy was required, otherwise the money was not going to many of those community groups and charities—I have met very many of them—who disburse the money and work to get this done.
I would simply say to my hon. Friend that I hope that Her Majesty’s Opposition will think very carefully about today, because it is important to get this legislation through. Yes, it is not without its faults. I recognise that there is an increase in the percentage it will raise that will affect high street betting shops, which are not the wealthy, massive offenders. We know that—that is where the pressure should come. I am in principle supportive of this legislation, because of the evidence we found.
I want to make one final point; I really want to press the Government on this. Will the Government confirm that GambleAware will have no role in influencing the future work, framework or shape of the research undertaken by UKRI under the statutory levy? GambleAware is far too close to the gambling industry. We need to make sure there is independence, based on the evidence we have of the harms, and more evidence that we can gather. I urge the Government to make sure that GambleAware is not party to that, so that this research will therefore be clearly independent.
Stephanie Peacock
This has been a useful debate. The statutory levy has previously had cross-party support. I will respond to some of the shadow Minister’s questions, and then I will respond to the right hon. Member for Chingford and Woodford Green. In response to the shadow Minister’s opening point about the Minister for Gambling sitting in the other place, I think it was unkind to refer to her as working part time; she merely sits in the other place, and I gently remind him that the previous Government’s Foreign Secretary did the same. Perhaps we could put the political point scoring to one side.
Mr French
I was the Parliamentary Private Secretary to the former Foreign Secretary, so I understand what the Minister is trying to say. I am not questioning the motives of the Minister for Gambling; the point is that she is tied up, as we all know, on the Football Governance Bill, because the Government have decided to put the Bill through the other place first. Hence, she can only work part time on the gambling reforms. That is the feedback we are getting consistently, and that is the challenge I am trying to make.
Stephanie Peacock
I do not recognise the logic of that argument. I do not believe the hon. Gentleman served as a Minister. He perhaps does not know that a Minister has to juggle a number of pieces of legislation, and a number of different issues. The Baroness is committed to being the Minister for Gambling, and she engages with a range of the sector, and as indeed did I when I was the shadow Minister, and I continue to speak to the sector when appropriate.
As for the economic picture, I will take no lessons from the official Opposition, given the state they left the economy in. Now I want to move on to discuss the actual statutory instrument.
Jerome Mayhew (Broadland and Fakenham) (Con)
In her first sentence the Minister says we should move on from these political points, then in the second sentence says she will take no lessons from us on how we managed to wreck the economy. I would like it if she could reflect on those two sentences, to see whether they are mutually compatible.
Stephanie Peacock
I will certainly do that.
I would now like to move on to discuss the matter before us, and to deal with some of the points that the hon. Member for Old Bexley and Sidcup made. He mentioned more than once the desire to bash the sector. I certainly do not want to do that. I enjoy a trip to the races as much as anyone. I recognise the contribution that the betting and gambling industry makes to my constituency in Barnsley South, and I have visited a number of those outlets. The regulations are about getting that balance and acknowledging that millions of people like to gamble regularly but that there is a significant issue and challenge in this country with gambling-related harm. As the right hon. Member for Chingford and Woodford Green pointed out, this has been a long-standing, cross-party piece of work and a number of hon. Members have done a huge amount of work on it—more than I have—to bring it together over a number of years. Obviously, we had the 2023 White Paper and we now have the statutory instrument that will introduce the levy.
I will now turn to the questions asked by the hon. Member for Old Bexley and Sidcup. We have listened carefully to the arguments made by the land-based sector, and we understand its higher operating costs. We are keen to work with it, and we are confident that this is evidence-led and that it gets the balance right. It is not our intention for there to be double payments, and I believe officials are working to clarify that. I will certainly write to hon. Gentleman. He asked for the breakdown: 20% will go to research, 30% to prevention and 50% to treatment. We of course recognise the role that the third sector has played over many years.
The hon. Gentleman mentioned society lotteries. We had a debate in this place on Friday last week. I only had four minutes left to speak, but I briefly outlined the Government’s position. We have committed to come back to this place on that by the summer. We have commissioned independent research on society lotteries, which is due to report by next month, and we will be reporting to the House on that.
I will now move on to the points made by the right hon. Member for Chingford and Woodford Green. I once again acknowledge his contribution to the debate and to the work in front of us. We want to make sure that this is the most effective and efficient levy, so he is absolutely right that, if there are questions, we want to work with the sector and with relevant charities to get it right. As with anything new, that may take some time. We do not believe that those challenges are a reason to oppose these regulations. I appreciate his support, and I acknowledge the contribution he has made. On his specific questions about GambleAware, we acknowledge the role that industry funding has played in raising awareness previously. We are aiming to build a comprehensive approach to prevention for the first time, and it is a priority to ensure that funding is directed to where it is needed most. I will write to the right hon. Gentleman with a more specific answer, and I appreciate his contribution.
Question put.
Draft Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025
(2 days, 2 hours ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
I beg to move,
That the Committee has considered the draft Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025.
It is a pleasure to see you in the Chair this morning, Sir Desmond. The draft regulations were laid before the House on 6 December 2024.
The Government are committed to increasing transparency of beneficial ownership and combating economic crime. Hon. Members will be aware that since 2022 the UK has had a public register of beneficial ownership of overseas entities that own property in the UK, known as the register of overseas entities. The draft regulations will strengthen the transparency of trust information on the ROE to further improve transparency around the ownership and control of land.
The ROE, which was created by the Economic Crime (Transparency and Enforcement) Act 2022, requires overseas entities that own or buy property in the UK to give information to Companies House about their beneficial owners and/or managing officers. The ROE is a key tool in cracking down on dirty money in the UK and is crucial in the fight against bad actors who use UK property as a money-laundering vehicle. The information available on the ROE has been used by many journalists examining corruption, money laundering and assets held by individuals who are subject to sanctions.
Currently, the ROE collects trust information, but there is no public access to that data, other than the name of the trustee. This approach protects the right to privacy for those who operate such structures for a variety of legitimate reasons. However, the Government understand that there are concerns around the use of trusts to facilitate economic crime, particularly because their anonymity makes assets easier to hide.
The draft regulations have been designed to provide further transparency and prevent potential abuse of trusts, while supporting legitimate trust arrangements. They have been laid before the House under powers contained in the 2022 Act, as amended by the Economic Crime and Corporate Transparency Act 2023.
The draft regulations consist of two measures. First, they will enable anyone to apply to Companies House to access trust information held on the ROE. This marks a significant step forward in transparency, empowering the public and civil society to scrutinise trust beneficiaries on the ROE more effectively. Anyone can apply to the registrar of companies for information about a specific trust. Applicants must provide their personal information, the name of the trust related to the relevant protected trust information, and the overseas entity’s name and ID.
Applicants seeking trust information related to minors, or to more than one overseas entity in a single application, must meet a legitimate interest for the requested disclosures. This will ensure that the vulnerable are protected but that critical information is available to those with a valid need, such as investigative journalists. By requiring this safeguard, the Government are striking a fair balance between protecting personal information and delivering on our commitment to greater transparency.
Applicants will need to show a legitimate interest; they cannot just go on a fishing expedition. They must show that they are investigating money laundering, tax evasion, terrorist financing or breach of sanctions and must provide a statement that they are requesting the disclosure in order to further that investigation and a statement on how they plan to use the information disclosed to them. If no such interest can be demonstrated, the registrar may withhold some or all of the information.
The registrar will notify the applicant of the decision and will provide reasons. If a legitimate interest can be demonstrated, the registrar will release any unprotected information. The registrar will have the discretion to impose conditions under which the trust information is disclosed, such as restricting its use or further disclosure; failure to comply with those conditions will be an offence. The registrar may also refuse an application where disclosure may prejudice an ongoing criminal investigation or adversely affect national security, or where the trust is a pension scheme.
The second measure in the draft regulations involves provisions for the protection of sensitive information, which will come into force before the disclosure provisions go live. Through the draft regulations, we are expanding the category of individuals who can apply to the registrar of companies at Companies House to have their information protected. This will ensure that those connected to a trust, such as settlors, trustees and beneficiaries, whose information could be published or disclosed by the registrar under the ROE, can apply to have their details protected from disclosure, for instance where there is a risk of violence or harm. The draft regulations will also expand the grounds on which an application for protection may be made, to include the ground that the individual is under 18 or lacks capacity.
The protection provisions will come into force on 28 February; the provisions on disclosure of trust information will come into force on 31 August. This will allow sufficient time for those who are eligible to do so to apply to Companies House for protection.
The draft regulations will not change the fact that an application for protection does not exempt an overseas entity from the requirements of the 2022 Act in general. The required information about the trust must still be supplied to Companies House, and the registrar will still be able to use their general information-sharing power, which was introduced by the 2022 Act, to share protected information with law enforcement agencies and public authorities for purposes connected to the exercise of their functions.
The draft regulations will further the Government’s mission to improve transparency of the beneficial ownership of overseas entities investing in the UK, driving confidence in our economy and exposing bad actors who seek to take advantage illegitimately. I hope that hon. Members will support the draft regulations.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Sir Desmond. I am grateful to the Minister for outlining in such detail the provisions of the draft regulations, which build on legislation passed by the last Conservative Government. The broad picture is that His Majesty’s loyal Opposition welcome and support them and will not seek to divide the Committee on them. Essentially, they will expand the category of individuals who can apply to Companies House to have their information protected under the ROE and will allow trust information on the ROE that is currently restricted from public inspection to be accessed by application, subject to certain requirements.
Although I stress that His Majesty’s loyal Opposition support the draft regulations, I have two sets of questions to which I would be grateful for an answer from the Minister, either directly this morning or in writing later.
First, who makes the assessment of who meets the threshold for being considered at risk of intimidation or violence? Is there a published list of criteria for meeting the threshold? Is there any means for applicants to appeal the decision?
Secondly, once an applicant has been successful in their application to have their information protected, how often will they need to reapply? How frequently will Companies House review their status?
Justin Madders
I am grateful for the Opposition’s support. The shadow Minister raises some important questions. I think that these will be operational matters for the registrar.
I have no doubt that there will be criteria; there will certainly be criteria available for legitimate interest tests. We envisage some kind of informal process for decisions to be challenged—but those, I think, will be operational matters for Companies House to decide in due course. I will write to the shadow Minister with further detail.
The shadow Minister asked about the period for which the information would remain protected. My understanding is that the protection would remain in situ unless something came to light that suggested that that information needed to be questioned—but, again, that is more of an operational matter. I will write to him with further detail.
If there are no further questions, let me commend the draft regulations to the Committee.
Question put and agreed to.
Draft Separation of Waste (England) Regulations 2025
(2 days, 2 hours ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
I beg to move,
That the Committee has considered the draft Separation of Waste (England) Regulations 2025.
It is a pleasure to serve under your chairmanship, Madam Chair. These regulations, laid in draft before the House on 3 December 2024, confirm the final policy positions for simpler recycling in England. For too long, households in England have been presented with a muddled and confusing patchwork of approaches to bin collections. These reforms will ensure that across England people will be able to recycle the same materials, whether at home, work or school, putting an end to the confusion over what can and cannot be recycled in different parts of the country—something that we all, as Members of Parliament, experience on a weekly basis.
We are all responsible for addressing our country’s waste problem. We know that citizens want to play their part and recycle as much as possible, but they are frustrated by limited and confusing recycling services. Through these reforms, we are empowering citizens to turn their good intentions into simple, effective actions.
Simpler recycling is one of the three core pillars of the Government’s ambitious collection and packaging reforms, alongside the forthcoming deposit return scheme and the extended producer responsibility scheme for packaging. Together, we estimate that the collection and packaging reforms will support 21,000 jobs in our nations and regions and stimulate more than £10 billion of investment in recycling capability over the next decade. The reforms are also estimated to deliver carbon savings of more than 46 million tonnes of carbon dioxide equivalent by 2035, with a value of more than £10 billion in carbon benefits.
Since 2015, household recycling rates in England have plateaued at around 44% or 45%, and they actually decreased to 43% in 2022. We urgently need to take steps to improve that recycling performance. This statutory instrument on simpler recycling will end the postcode lottery of bin collections in England by ensuring all households and workplaces can recycle the same core waste streams: plastic, metal and glass, paper and card, and food waste with garden waste for households upon request.
Simpler recycling will improve services for householders, by introducing weekly food collections for all households in England and kerbside plastic film collections. That will constitute a significant contribution towards meeting our ambition to recycle 65% of municipal waste by 2035 and our target of reducing residual waste generated per capita by 50% by 2042 compared with 2019 levels. These changes are a critical first step towards meeting the commitment in our manifesto to transition to a resource-resilient, productive circular economy, which delivers long-term, sustainable, resilient growth.
Let me draw Member’s attention to the exemptions introduced by this instrument. The legislation to implement the core legislative requirements of simpler recycling was introduced by the previous Government through the Environment Act 2021. This legislation has already come into force, which in practice means that simpler recycling will automatically into effect in March 2025 for workplaces and March 2026 for households.
Sections 45A, 45AZA and 45AZB of the Environmental Protection Act 1990, as amended by the Environment Act 2021, require that the six recyclable waste schemes—plastic, glass, metal, paper and card, food waste and garden waste—are collected separately alongside residual waste. The legislation states that local authorities and other waste collectors can make use of an exemption to collect these recyclable materials together if it is not technically or economically practicable to collect them separately, or if there is no significant environmental benefit to doing so. If they use an exception, however, the waste collectors must produce a written assessment to record the justification.
Laid in draft before the House on 3 December, the draft instrument sets sensible exemptions from those conditions, allowing any combination of the recyclable waste streams—metal, glass and plastic—to be collected together at all times. The exemption applies to collections from households and from workplaces. It also allows food waste and garden waste to be collected together from households at all times. Waste collectors will not have to justify co-collection of any of those materials as they would have to under the primary legislation. We took that decision because the Secretary of State determined, based on the evidence, that co-collection of those materials does not affect the potential for them to be recycled.
We will not include paper and card in the exemption; they must, by default, be collected separately from the other dry recyclable waste streams. This applies to collections from households and from workplaces. That is because paper and card are particularly vulnerable to cross-contamination from food and liquid commonly found on other recycling materials, which could significantly reduce the potential for the collected material to be recycled.
None the less, we want to provide flexibility for local councils and other waste collectors, so where waste collectors consider that it is not technically or economically practicable to collect paper and card separately, or where there is no significant environmental benefit from doing so, they may collect paper and card together with other dry recycling, if they provide a written assessment to document the justifications.
Waste collectors will decide where an exception applies. There is no need to request permission from the Department for Environment, Food and Rural Affairs or the Environment Agency to co-collect paper and card where an exception applies. We have published guidance for local councils and other waste collectors to support their decision making on the co-collection of paper and card with other dry recyclable materials where appropriate. All exemptions will be automatic; local councils and other waste collectors will not need to apply for them. They will need only to produce a written assessment to co-collect paper and card with other recyclable materials. Under the primary legislation, without this instrument, they would have had to produce written assessments to co-collect any combination of recyclable materials together.
The exemptions mean that the new default requirement for most households will be four containers: for food waste, mixed with garden waste if appropriate; for paper and card; for all other dry recyclable materials—plastic, metal and glass—and for non-recyclable waste. As we are maintaining flexibility, councils and other waste collectors may choose to separate materials further if that suits local need. This is a sensible, straightforward, common-sense approach to the collection of recycling for every household and workplace in England.
When the draft instrument is implemented, microfirms—workplaces with fewer than 10 full-time equivalent employees—will not need to arrange recycling of the core recyclable waste streams, as required by the Environmental Protection Act 1990, until 31 March 2027. We recognise that microfirms, of which there are estimated to be 1.8 million in England, may face more challenges introducing the changes, so the phasing-in period gives them more time to prepare.
These are substantial reforms and we will support local councils and workplaces to deliver the new requirements in the most cost-efficient way. Right now, we are focused on raising awareness and providing guidance for councils and workplaces on how to deliver efficient services, including through webinars and toolkits. For local councils, we are working to distribute funding for food waste collections as soon as possible. We have already provided £258 million of capital funding, and we will also provide resource and ongoing funding. We will also continue to engage with stakeholders to understand the challenges they face and to ensure the successful delivery of simpler recycling.
The need for simpler recycling has never been clearer. By simplifying what households and workplaces across England can recycle, these long-awaited, much anticipated reforms will jump-start England’s faltering recycling rate, maximising environmental benefits, ensuring we keep our precious resources in use for longer and unleashing investment and economic opportunities. I commend the draft instrument to the Committee.
Dr Neil Hudson (Epping Forest) (Con)
It is a great privilege to serve under your chairship, Mrs Furniss, and to be sitting opposite the Minister again, as I have done on various issues. I thank her for bringing these important regulations to the Committee.
The principle of improving our recycling is one that I wholeheartedly support. I believe the Conservatives have a strong track record in this area; I thank the Minister for graciously acknowledging the importance of our landmark Environment Act 2021. Between 2010 and 2022, we reduced the amount of waste going to landfill by about 47% and cut the amount of biodegradable waste going to landfill by 46%. We also introduced a simpler recycling collection system to make it easier to recycle, saving people time and stopping confusion, to boost recycling rates. Additionally, our introduction of the single-use plastic bag charge in 2015 led to a remarkable drop in plastic bag usage, significantly reducing plastic waste.
I am pleased to see that the Labour Government have drawn on our previous consultations to shape this statutory instrument. In 2021, the Conservative Government conducted an initial consultation on consistency in household and business recycling, followed by an additional targeted consultation in 2023 that focused on exemptions to allow co-collection of recyclable waste streams. The process engaged English waste collection and disposal authorities, the Environment Agency and key stakeholders across the waste sector.
These regulations, set to take effect at the end of March this year, introduce mandatory waste separation for businesses and non-domestic premises. Businesses with fewer than 10 employees—microbusinesses—have been given an extended timeline until March 2027 to comply. Under the regulations, businesses will need to separate their waste into three key streams: dry recyclables such as glass, plastic, metal, paper and card, food waste and residual waste.
Recycling is important, and we must continually look at ways to increase it and make it easier for councils to carry out their waste management roles. However, I do have a couple of clarification questions for the Minister that I hope she may be able to address. First, can the Minister confirm what specific campaigns or initiatives will be launched to ensure that businesses and non-domestic premises are fully aware of the changes coming down the line? Secondly, what measures are being put in place and what reassurances are being put out there to help businesses—particularly small and microbusinesses—to comply with the regulations without facing financial burdens?
This is an important issue; I look forward to seeing how these regulations and this important recycling agenda progress in future.
Mary Creagh
I thank the shadow Minister for his kind comments. It is fair to say that there has been cross-party unity on two of these three reforms; I was very surprised to see that his colleague, the hon. Member for Arundel and South Downs (Andrew Griffith)—not this shadow Minister, who had the very good sense not to be present in that debate—chose to divide the House on the introduction of the deposit return scheme. These regulations were in-flight regulations; they have taken such a long time from when they were first promised back in 2018, and my strong feeling is that we should not let the perfect be the enemy of the good. We could all create the perfect recycling system, but we have to deal with the world as it is, not as we would like it to be.
I agree with the shadow Minister that the single-use carrier bag charge was one of the Conservatives’ landmark reforms. By introducing a charge—not a benefit; people respond better psychologically to a charge than to a benefit—that measure has driven a huge behaviour change, which means we rarely see plastic bags littered. Of course, all these reforms are about tackling the avalanche of litter that is plaguing our rivers, lakes and seas, turning up on our beaches and killing our wildlife. All the evidence says that if we have unclear and inconsistent collections, people do not know what to do with their waste and they end up just putting it outside. That is how we end up with the fly-tipping epidemic that we are trying to tackle.
The shadow Minister asked me about campaigns. First, I think it is fair to say that these regulations have been a long time in the making, so local authorities certainly know that they are coming. My officials and I hosted a roundtable with local authorities last week in the Department at which the Merseyside waste authority, the Greater Manchester waste authority and several of the London waste authorities were present. Wiltshire county council was also present, which I know has been pressing hard on the recycling for plastic films that this instrument introduces. We had district councils, county councils and the big metropolitan councils in there, so I think there is awareness.
Given the timing of the election and recess, as well as parliamentary time, there is work to be done on the readiness of businesses and, as I have said, we are working with the Environment Agency. Obviously, some stakeholders may find the introduction of the reforms more challenging than others. We will work with them to support them in overcoming any difficulties that they might face in complying within the legislative timeframes. Of course, waste collectors have every incentive to tell businesses that these changes are coming because new collections, and therefore new business opportunities for the waste collection and recycling industry, flow from these reforms.
For workplaces, the Environment Agency will be the regulator, and if there is non-compliance, it will issue a notice. That could be against the workplace, as the producer of the waste that is non-compliant with the arrangements made by its waste collector, or against the waste collector that is not providing a compliant service. Obviously, the agency’s enforcement and sanctions policy requires it to act proportionately and to balance the risk posed, the seriousness and the impact of potential breaches when considering its response, while considering all individual facts and circumstances of a potential breach.
The Environment Agency, my officials and I are committed to supporting businesses—both waste producers and collectors—in understanding their duties under these regulations. The Environment Agency will deliver a range of engagement activities, guidance and resources up to and, crucially, beyond the commencement of the legislation; it would be naive to think that we can wave a magic wand and suddenly all this happens on 1 April, so we have to treat this first year as a gradual change. We will be working on that, and we have worked with waste authorities; I hope that answers the shadow Minister’s questions.
Question put and agreed to.