Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2018
Debate between Lord Clement-Jones and Lord Faulkner of Worcester
Lord Faulkner of Worcester (Lab)
I am happy to support the regulations. I declare an interest as the chairman of the Alderney Gambling Control Commission and as a veteran of the scrutiny committee on the draft Gambling Act 2005. I recall very well that there were a lot of debates then about whether betting on the National Lottery should be permitted. Our advice was that it should not, for the reasons that the Minister has explained. There has always been a conflict of interest for the National Lottery and the role of the Gambling Commission as its regulator, which remains unresolved. The Gambling Commission—and the National Lottery Commission before it—had the twin objectives of player protection, in ensuring that people did not spend excessive amounts on the lottery and get themselves into difficulty, and the requirement to maximise the return to good causes. As I say, that conflict remains unresolved and will, I suspect, continue to remain so.
The regulations deal with companies such as Lottoland, from which I received a certain amount of unsolicited promotional material. It is based in Gibraltar and offers bets not just on the EuroMillions Lottery but on competitions such as the US Powerball, the Irish Lottery and something called the Bitcoin Lottery. I am not surprised that it opposed the regulations; being able to cash in on the promotion of EuroMillions is a nice little earner for it. Like the Minister, I do not agree that it is right for such companies to do that, so I support the order.
Lord Clement-Jones (LD)
My Lords, I thank the Minister for her introduction to the order. It is a pleasure to follow the noble Lord, Lord Faulkner, who took us down memory lane with the Gambling Act 2005. It reminds me that I have been doing this job almost as long, I think, as the noble Lord, Lord Stevenson, which is saying something.
I entirely accept the logic and reasons outlined by the Minister. First, there is the confusion that has clearly been caused. I, too, thought that Camelot’s briefing was pretty cogent on the subject of the damage to the EuroMillions and National Lottery brands in this country. Of course, that has a detrimental effect on participation. It is interesting that Camelot’s research found that only 14% of consumers could correctly identify that buying a EuroMillions ticket via Lottoland —already mentioned—is actually a bet on EuroMillions in a foreign country. Over 60% thought that they were playing EuroMillions the UK. Indeed, I understand that Lottoland’s research found that 28% of its customers did not understand the difference between the two products. That is pretty conclusive.
Secondly, none of the revenue from betting on these lotteries is returned to good causes. That must be a major reason for passing this order. Then there is the fact that Camelot is having to spend quite a lot of money defending its National Lottery brand as a result of all this. That is another reason, so we on these Benches support action by the Government very strongly. This kind of betting on lotteries runs contrary to the spirit and intention of the law, causes customer confusion and harms returns to good causes.
As is ever the case with these orders, it is a very good excuse to probe the Government on one or two other matters. I turn to the relationship between the National Lottery and society lotteries in this context. We know about the success of the National Lottery, which has partly been because of the clear distinction between the National Lottery and society lotteries. A single national lottery has been operated in order to maximise returns to good causes. The economic case for a single national lottery has been examined on many occasions; I think the most recent occasion was when the Gambling Commission advised the DCMS on regulatory policy for the lottery sector. That was in September 2014. It said that,
“the relatively low prizes and generally limited distribution footprint are key factors that have traditionally differentiated the”,
society lottery,
“sector from TNL”—
that is, the National Lottery sector. To make a clear distinction between the National Lottery and smaller, traditional society lotteries, prize and proceed limits exist for society lotteries—as the Minister will know—with the top prize capped at £400,000.
The emergence of national or “umbrella” society lotteries has blurred the distinction between the National Lottery and society lotteries. These larger lotteries are sold and advertised nationally and run by commercial operations. For these reasons, umbrella lotteries stray into the territory originally intended by Parliament to be the sole preserve of the National Lottery through its single national lottery model. Of the current operators in the market, the only umbrella society lottery to offer the top prize of £400,000 is the People’s Postcode Lottery. Increasing the top prize for society lotteries could create, in effect, many more national lotteries, contrary to all economic evidence that a single national lottery is the optimal way to maximise returns to good causes.
After that barrage, my question is: do the Government accept that case and that increasing the top prize for society lotteries risks unbalancing the single national lottery model, putting revenue for good causes at risk, and that therefore there should be no change to the top prize value for society lotteries? I would be more than happy if the Minister wrote to me.
Wireless Telegraphy Act 2006 (Directions to OFCOM) Order 2010
Debate between Lord Clement-Jones and Lord Faulkner of Worcester
Lord Faulkner of Worcester
My Lords, the Minister will be aware that I wrote to him about this matter earlier today. I apologise for the late notice I gave him, but I did not receive notification about this problem until seven o’clock last night when a member of the railway industry wrote to me to draw my attention to exactly the points just alluded to by my noble friend Lord Berkeley.
This is clearly a significant issue for the railway. It is not a situation where we can take a chance and see what happens. If it is the case that the new broadband width is going to interfere with signalling, obviously the railway will become unsafe. The solution would seem to be the fitting of filters not just to the train sets, as my noble friend Lord Berkeley says, but I understand to trackside equipment as well. The estimate of costs he gave is a figure that I am familiar with as well.
We are all anxious to see the extension of digital Britain. I played a small and modest part in the legislation passed in the previous Parliament, as the Minister knows, and I am keen to see the benefits of broadband extended as widely as possible. This is a potentially unfortunate unintended consequence, but the operation of the railway, if not endangered, will certainly be embarrassed as a result of the introduction of these broadband widths without some mitigating measures. My noble friend Lord Berkeley referred to the possibility of the Department for Business, Innovation and Skills paying the costs, but perhaps it would prefer that the purchasers of the new broadband width should have them built into their contracts. However, it is clearly unacceptable to expect the railway to pay for it, and indeed if the railway were to do so, it would then be for the Department for Transport because it is responsible for the cost of the new signalling system which is being introduced progressively over the next six years.
Again, I apologise for bringing this up so late. It is not a matter that has been considered either in the other place or in your Lordships’ Merits of Statutory Instruments Committee, but it needs to be taken into consideration. I hope that the Minister will be able to give us some assurance.
Lord Clement-Jones
My Lords, I suspect that, looking at the numbers in the House, we are in rather arcane territory with this order. We are indebted to Kip Meek, the former independent spectrum broker, for having come up with some solutions that are reflected in the order, but of course he has now gone to run YouView, and good luck to him in that very important project. But luckily today we have my noble friend Lord De Mauley, who was fully conversant with all the discussions over spectrum during the passage of the Digital Economy Bill, so I am confident that he will be able both to reassure and to enlighten me about some of the issues underlying this order. It is also a little bit of a reunion when I see the noble Lord, Lord Young, across the way as well.
I broadly support the order, and for those of us who worked in the salt mines of the Digital Economy Bill, the legislative and regulatory background to spectrum allocation is familiar. For the most part so is the content of this order since we were all ready to debate it before the last election. Indeed, we assumed that it would be reintroduced immediately after the election, but the Department for Business, Innovation and Skills appears to have been ruminating on it for some time.
The Minister helpfully mentioned some of the differences between this order and the draft order we saw in March, particularly simplification of the order and the removal of the coverage obligations, but otherwise it is not entirely clear what other differences there are between this regulation as tabled and the previously tabled regulation. The essence, as I understand it, is because there will now be a competition assessment before the auction takes place. What is the thinking behind this change? Is it because this means that the auction conditions can be tailored in the light of the assessment? This is an important and welcome addition, and if so, can my noble friend say exactly when that assessment will happen and what the process will be? I think he described the assessment as “urgent”, so I assume that means that the assessment is imminent.
Given the importance of fair allocation below 1 gigahertz spectrum, can the Minister confirm that Ofcom will conduct the assessment before the existing 900 megahertz licences are varied? Can he also confirm that the key element of the combined auction for the 800 megahertz and 2,600 megahertz licences will continue?
There is then the issue of timing which, according to the CEO of Ofcom, will be 2014. It will be at least a year before Ofcom issues an invitation to bid for the so-called four key radio frequencies that will allow mobile network operators to offer network speeds that are competitive with fixed-line broadband.
As I understand it, the timetable as set out by Ed Richards is as follows. Starting in February 2011, there will be consultation on steps for a competitive auction. On the consultation finishing, in the early autumn there will be a statement on future competition. At the end of 2011 the final auction regulations will be published. The auction will take place and then finally, in 2014 the 4G networks will be up and running. It will be helpful if the Minister can confirm that that is the expected timetable.
Mr Richards appears to describe this timetable as ambitious, but to many it appears rather slow. After all, the first Meek report came out in May 2009 and the final report came out in September 2009. Mobile network operators have been waiting for 4G spectrum in the 800-megahertz and 2.6-gigahertz bands for several years; they want and need the higher frequencies to relieve congestion in their urban networks and they want the sub-1-gigahertz frequencies, which carry further than 3G frequencies for the same power, so that they can extend their coverage cheaply.
These frequencies are also needed to enable networks to roll out the next generation mobile transmission technology known as LTE. The industry, however, has said that this timetable will put the UK well behind other markets. LTE services are already up and running in other European countries; a few networks in Europe are already running or testing LTE in 1800-megahertz and compatible devices, notably dongles for laptops.
What has been the cause of the delay? Was it the threat of legal action by Everything Everywhere because it feared being locked out of the sub-1-gigahertz spectrum, or the threat of litigation by BT on rather different grounds? Is the competition assessment the price of its withdrawal? Or is the real reason why Ofcom has been delaying the 2.6- gigahertz spectrum release until 2014 because it has no other spectrum ready that could be used for wireless cameras during the Olympics?
Have the Government thought seriously about the consequences of this delay? Is there any way the auction can be brought forward? It has been calculated that delay in the 800-megahertz and 2.6-gigahertz auctions is estimated to have already cost the Treasury £6 billion in lost revenues as industry has spent the money elsewhere in the EU buying spectrum. The longer we delay before the auction takes place, the less money industry, it appears, will have left to spend in the UK. Can the Minister tell us frankly what the situation is and why we are so late coming to this order and adopting such a leisurely timetable?
The form in which the spectrum is released also matters. In the current plans, 2.6- gigahertz is split into two blocks; this means that it is less suitable for use by the technology known as WiMax. Does this not need to be changed to ensure technical neutrality between LTE and WiMax? Alternatively, could some of the 2.6-gigahertz allocation be for WiMax and some for LTE? Otherwise, we run the risk of prejudicing WiMax deployment and failing to be technologically neutral, as Ofcom is obliged to be.
On the position of the emergency services and the spectrum allocated to them, I recently asked the Government a number of Written Questions. Had they agreed to find spectrum for secure broadband services for the emergency services from below 1- gigahertz? If so, what steps were being taken to set aside an allocation from within the tuning range of existing Tetra radios and exempt it from being auctioned? Thirdly, did they need to produce a business case to do so? The reply that I have received is baffling if I have not understood, and unsatisfactory if I have.
The Minister, the noble Baroness, Lady Neville-Jones, has said that it is unlikely that the emergency services will use a spectrum band below 1-gigahertz due to the lack of available spectrum in the range. Furthermore, she claims that the technical benefits would be minimal. Public sector organisations apparently “must engage with the market”; BIS does not currently anticipate exempting any spectrum from auction and no business case has been produced. That is what I would call the dustiest of dusty answers.