Football Index Collapse

Jeff Smith Excerpts

Tuesday 7th June 2022 Westminster Hall

[Jeff Smith (Manchester, Withington) (Lab)]

It is good to see you in the Chair, Ms Ghani. I pass on the apologies of the shadow Minister responsible for gambling, my hon. Friend the Member for Pontypridd (Alex Davies-Jones), for her absence. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing this debate, and thank her for everything she does in fighting for justice for those affected by the collapse of Football Index.

Like me, most MPs will have heard examples of the devastating impact of the Football Index collapse on their constituents. The sheer number of MPs wanting to take part in an hour-long debate is evidence of the seriousness of the issue. Members on both sides of the Chamber have made excellent speeches articulating the pain that many of our constituents have gone through. People have lost tens of thousands of pounds that were supposed to be for their families’ future. Marriages and relationships have fallen apart. The stress and guilt of the experience have induced severe physical health problems; people are even suffering from depression and becoming suicidal. It should never have been allowed to happen.

It is clear that there has been a massive failure of regulation. When the Government commissioned their report on the collapse, there were concerns among those affected that the review did not sufficiently interrogate or challenge the Gambling Commission’s explanation of events, and I would be grateful to hear the Minister’s comments on those concerns. Nevertheless, the report identified clear failings: BetIndex did not properly notify the Gambling Commission of the nature of and changes to the product in its licensing application; the Gambling Commission responded slowly to the challenges raised by the product; and the Financial Conduct Authority could also have done more to help.

Perhaps the most devastating aspect of the scandal is that many of those who ended up losing money believed that what they were doing was safer than what we might call normal gambling. The marketing for the product was couched in the language of investment, not betting, and it was promoted as a safe venture with “guaranteed yields”, which led people into this position. The fact that the product was licensed, appeared in TV and radio adverts and acted as the sponsor on the football shirts of three teams gave it an air of legitimacy that it should not have had. It was a major failing of regulation and demonstrates why we urgently need reform.

Reports suggest that the long-overdue gambling White Paper is finally set to be published this month. I repeat the plea I made to the Minister when we faced each other this morning in this Chamber that this is urgent. Earlier, the Minister said that the White Paper would be published in the coming weeks, which is welcome. Can he confirm that it will be before the summer recess? That would be welcomed by people who have been affected by this scandal and by other problem gambling, because we need the time to assess and debate it.

That kind of wide-ranging and evidence-based reform of our gambling legislation will hopefully prevent anything like this from happening again and impacting on others in future. Of course, the hope of future reform, and the improvements so far from the Gambling Commission, do nothing to help those who have already been impacted. The Government have said that they will not use public funds to provide compensation for the losses caused by the Football Index collapse. They have signposted those affected to seek reimbursement from BetIndex’s liquidation process, but it is becoming clear that the process will not yield enough to those who have been failed.

Many have called for the creation of an ombudsman to get redress for Football Index’s victims. The Opposition think that the Government should look seriously at that useful proposal. There certainly needs to be more action to get redress for victims. The collapse of Football Index has had a shattering impact on many people’s lives. People were badly misled, and our existing regulatory mechanisms failed. It cannot happen again.