Future of Horseracing

Jerome Mayhew Excerpts

Wednesday 25th October 2023 Westminster Hall

[Jerome Mayhew (Broadland) (Con)]

Thank you, Mr Hosie, for chairing this debate, which has been fascinating. I have learned a huge amount about British racing. I declare an interest: I do not represent Newmarket or Cheltenham, but Fakenham—a fantastically formed, albeit small, national hunt course—is in my constituency. The topography is such that one can see the entire race from the stands. It is a really lovely place, and it employs 132 people on race days, all from Fakenham and the surrounding area. It is not just about the direct employment; the beneficial impact of having a course like Fakenham in my constituency is more widely felt like that in the town—

[Peter Aldous (Waveney) (Con)]

I have a confession to make: Fakenham was the first racecourse I ever went to. When I went, it had a chase course that went out beyond the point. Would my hon. Friend agree that the supply chain for British racing extends out of training centres and the courses we know about, into the countryside and studs? Its tentacles go right through towns in this country into those licenced betting offices that are features of all our towns. There are people employed in that wider industry on high streets everywhere around this country.

[Jerome Mayhew]

I am grateful to my hon. Friend. He is quite right. It is not just about the betting offices in towns, but the restaurants and hotels that are supported by Fakenham race days. I declare an interest: I have enjoyed a day’s racing at Fakenham courtesy of the racecourse’s trustees. I think they threw in a sandwich as well. That should be included on the record. It was delicious. I hope to go again later this year—[Laughter]—depending on the outcome of this debate.

Many Members have spoken about the benefits to the national economy of racing. I will not repeat them; they have been well rehearsed. I want to focus on the local benefits of racing to rural communities like mine. The Gambling Act review is causing Fakenham huge concern. The proposed enhanced checks for problem gamblers will be incredibly important for two communities: problem gamblers—they must be assisted, not hurt, by this decision—and the racing industry. It is a truism that, like any important decision, it should be based on best evidence, not ideology.

Judging by this debate, which I have listened to, there appears to be a massive conflict of evidence. It depends on who one listens to. According to the racing industry, the existing checks to reduce problem gamblers have not had a minimal impact and have not been taken in the industry’s stride. In fact, they have cost it about £1 billion. It is argued that as a result of this withdrawal of cash from the industry, about 1,000 racehorses have been taken out of training, bringing the number in training comfortably below 15,000 for the first time in a long time. That is a very heavy impact on the industry.

Perhaps it is worth it. Perhaps the benefits of the current checks on problem gamblers are so positive that it is worth imposing a cost of £1 billion on the racing industry. But they have been in place for two years now. What does the evidence show us? There were nine characteristics of harm from gambling that were associated with the assessment of the efficacy of these new rules. Have they changed? I am sorry to say that despite costing the industry £1 billion, of those nine measures of gambling-related harm, not a single one has improved during that period.

At the very least, this should cause the Government to pause for consideration, rather than doubling down on yet more of the same seemingly failed approach. Losing £1 billion for no measurable impact on the nine metrics that the Gambling Commission considered were the right ones to measure is not a result that would lead one to think, “Oh yes, we need to go further in the same direction.” The Gambling Commission tells us that the current proposals will also have very little, or minimal, impact on the industry. As one of the other contributors has mentioned, it says that about 3% of the accounts will be affected. But the evidence from the industry is that this is already incorrect. Somebody only has to read the front page of the Racing Post, of which I hope many Members here are subscribers, to see the multiple accounts of people changing their betting habits even before the new restrictions come in.

Just this month, there was a survey in which 15,000 racing gamblers took part—so a very substantial survey. More than 50% said they would stop betting or significantly reduce their betting because of these personally intrusive checks, which include one’s job title and postcode, while 40% of them said that they would consider moving towards black market betting, which 10% have already done. What outcome are the Government seeking to achieve for those with problems in gambling? Is it to drive and increase the size and scope of the black market industry, where there is no regulation at all, and where problem gambling is actively encouraged because it maximises profitability? If that is what they want to do, just the threat of this consultation review is already causing that to happen.

[Danny Kruger (Devizes) (Con)]

My hon. Friend is making a very good speech and I agree with everything that he is saying. Does he also recognise the danger of driving people towards international gambling organisations online, which, although perfectly legal, have none of the checks that we would have, and where, as he is describing about the black market, they have all the incentives in the system to drive people into addiction?

[Jerome Mayhew]

I very much welcome my hon. Friend’s contribution. Of course, he is absolutely right. There are many seemingly unintended consequences of the current proposals. I have yet to see any worked examples backed by genuine evidence, as opposed to the expressions of hope from the Gambling Commission, that support an alternative interpretation.

If we are worried about unintended consequences, I encourage the Minister during this welcome consultation to follow the evidence and not ideology; to support rural employers like Fakenham; to support the fantastic day out that racing provides to 5 million people a year and the pleasure that it gives them; to support the economies that rely on racing in places like Fakenham and around the country; to support fun betting, which in itself provides revenue to help the 0.3% of the gambling public that has a serious problem; and to support the long-term future of this fantastic racing industry in our country.

Digital Markets, Competition and Consumers Bill (Third sitting)

Jerome Mayhew Excerpts

Committee stage
Thursday 15th June 2023 Public Bill Committees

[The Chair]

Mr Ross, we will now have a quickfire round, because we have you for only another five minutes and there are three Members seeking to ask questions. It will be one question each and one answer each.

[Jerome Mayhew (Broadland) (Con)]

Q I want to pick up on what you said about your concerns about the JR approach to appeals and whether it should be full merits. Then you said, “Well, we could do full merits, but within a six-month period.” How could you possibly do that?

Neil Ross: We put out a position paper ahead of the Bill being published and we did not argue in favour of full merits; we argued in favour of what is often referred to as a judicial review-plus system, which is a blended system that gives a bit more flexibility for the CAT to decide what factors to take into account.

[Jerome Mayhew]

Q Okay, but the bit that I am really interested in is how you could contain an appeals process within six months if you were going to look, even in any element, at the merits.

Neil Ross: I am not 100% sure of exactly how it would work in practice. We are just reporting back that what our members are really keen to see happen is that they move forward at speed. There is a lot of debate about exactly how you speed up that process, and we are pretty open to what solutions might be brought forward.

[Jerome Mayhew]

Q But you do recognise that speed is of the essence in a fast-moving market.

Neil Ross: Yes, absolutely.

[Jerome Mayhew]

Q So if you could not limit it to six months, that would be self-defeating in its own right in many cases.

Neil Ross: I think there is a balance to be struck depending on what the case is and what is being discussed. Ultimately, the aim would be speed and flexibility. There are going to be trade-offs between the two, depending on what is happening. We want to give the CAT as much discretion as it needs to make that judgment, depending on what is being put before it. Because this regime has enormously flexible and very invasive powers at the upper end, we do not know exactly what kind of cases are likely to be brought forward or discussed. That is why we will want that focus on flexibility as well as speed.

[Andy Carter (Warrington South) (Con)]

Q This follows on from that question. Do you think the Bill is designed with sufficient flexibility for the CMA and the digital markets unit to respond to the changing nature of the sector? Five years ago some of the things we have today just did not exist. What is your view on that?

Neil Ross: Yes. Sorry to repeat points I have made before. I think it depends on exactly how the DMU exercises the power. They have to look ahead five years when making an SMS designation, which puts a lot of pressure on the digital markets unit to make an assessment about how a market is going to be used.

--- Later in debate ---

[Vicky Ford]

Q How quickly have we gone from zero to 30%?

Gene Burrus: In 2008, it was zero, and the 30% probably came in about 2012. Once the markets settled down and it was clear that there were two phone platforms to be had, that is when Apple began to try to extract that.

Tom Smith: We focus on the app store stuff, but there is potential at other SMS firms. There are a lot of allegations about Amazon’s fees going up over time for small sellers, for example, and them being pushed into buying Amazon’s logistics operations, which are said to be expensive. The DMU can go and investigate whether they are expensive and whether they should be freed up to competition more. The CMA published a very good market study report on Google’s advertising businesses. It was 2,000 pages long and detailed the excessive profits made. Google charges 30% to 40% more than Bing to reach the exact same eyeballs. Those prices are going up.

[Jerome Mayhew]

Q You are buying a service to reach the same number of eyeballs. The process does not have greater reach. You said that, to achieve the same outcome as a facilitating business, they charge 30% to 40% more. Why doesn’t everyone use Bing?

Tom Smith: You may have seen yesterday that the European Commission is threatening to break up Google in the ad-tech business. The European Commission is formally alleging that Google is abusing its dominant position in ad tech. That is on the display side of the business. On the search side, Google has a 90%-plus market share in this country. It is a must-have product, and people are buying that product. There are lots of allegations about why it should be able to sustain such prices, but I do not want to make an unfounded allegation.

[Kevin Hollinrake]

Q We have put subscription traps in the Bill. I will ask the same question I asked Mr Burrus earlier: do you see anything in the legislation that would make it difficult for companies that currently operate on a subscription basis to comply with what we have set out?

Tom Smith: No, I do not think so. In fact, one of the problems with subscriptions that are operated through mobile devices is that Apple inserts itself and Google inserts itself in between the developer and the customer. If you are a British person who subscribes to an app and then something goes wrong or you want to cancel your subscription, quite naturally you might want to contact the developer, such as Tinder or whatever other developer—you are talking to Mr Buse later. At that point the developer has to say, “I’m terribly sorry; you might think you are dealing with us, but you have a contract with Apple,” and that is a major source of complaints. It is pretty confusing for consumers.

Digital Markets, Competition and Consumers Bill (First sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 13th June 2023 Public Bill Committees

[Vicky Ford]

Q Really quickly—will you be watching our market compared with what is happening in other markets?

Sarah Cardell: As one of our factors, absolutely.

[Jerome Mayhew (Broadland) (Con)]

Q You say that open, competitive markets are good for growth. I totally agree, but we are one market among a global series of markets. Building on what Vicky Ford just said, where do you see this regulatory innovation sitting? You have referenced the EU and what it is doing, and there are other things going on in the US. Will this draw investment into the UK in this sector, or will it make people say, “Hmm, I’m not sure”?

Sarah Cardell: I firmly believe it will draw investment in. Will, do you have a couple of examples of people you have spoken to?

Will Hayter: You have app developers who are wanting to provide a service through these mobile ecosystems that have pent-up business—I think you are talking to one of them later—waiting to be invested in and to grow. There is also a UK-based search engine looking for opportunities to expand. Those are exactly the kind of businesses that are trying to grow and want this kind of regulatory infrastructure to create the conditions to do that.

--- Later in debate ---

[Neil Coyle]

That is disappointing.

Matthew Upton: I have nothing to add.

[Jerome Mayhew]

Q Mr Upton, I want to come back to you about subscription traps. You are saying that the requirement in the Bill that subscription cancellation should be a timely process is not sufficiently detailed. I declare an interest: in a former life, I used to help write European regulations. Is it not an absolutely basic tenet of writing regulations that you design outcomes— you do not list processes unless you absolutely have to, because things change? Given that point, are the Government, or the drafters of this Bill, not correct to focus on the outcome required and leave the process alone?

Matthew Upton: In a sense, I disagree with you because I agree with your point about it being outcomes-focused. In a sense, you are right; it leaves it fairly open, which gives some space for people to interpret, but I think what will end up happening is that firms will get around those provisions in various ways. They will tweak the subscriptions to find other ways to find people to step in. We will have a game of whack-a-mole, where we chase around trying to clamp down, a little bit like we had in the utility-switching space of four or five years ago. Ultimately, whether people agree or not, that led to much heavier intervention in the market.

Just taking one step to move towards opt-out—in a sense, you are right; it is a process step—is incredibly simple in terms of aligning the incentives. I think that would mean you would have to do less of the tweaking, constant interventions and prodding of firms. It just sets up the incentives in a much more simple way.

[Jerome Mayhew]

Q Is the intervention not actually the exact opposite of what you are suggesting, in that, if you have a stricter requirement within the regulations, people find ways to get round that strict interpretation, but if you have an outcomes-focused statement as is currently in the Bill, the onus is on the companies to demonstrate compliance, and the CMA, with the fining power of 10% of global turnover, has the stick with which to enforce it?

Matthew Upton: I disagree, because I think the simplicity of simply saying, “You opt out at the end of a period” gives clarity. I think it is easier for firms to interpret. In reality, under the current set-up, I do not think you will see a lot of firms thinking in a positive way about how to interpret it. I think they will think about how they can push as far as possible.

Customer journey design is so complex—this is the challenge of emerging digital markets. It is not a case of being able to say, “You have two click-through screens versus three,” so that constitutes easy or hard. There are incredibly subtle ways to make it difficult. I think a lot of firms would continue to put their efforts into thinking about how they can stay as close as possible to the law to avoid CMA sanctions, while effectively still making it psychologically and in reality difficult for consumers. An opt-out would just simplify it, and would take that thought process off the table for firms.

[Alex Davies-Jones]

Q You mentioned schedule 18 already and some of the missed opportunities that you see there. Some things that have been highlighted are drip pricing and misleading green advertising. Can I push you a bit further on the missed opportunities in schedule 18?

Rocio Concha: In what respect? On why we want them there?

Digital Markets, Competition and Consumers Bill (Second sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 13th June 2023 Public Bill Committees

[The Chair]

Okay. In that case, I will bring in Jerome Mayhew.

[Jerome Mayhew (Broadland) (Con)]

Q I understand the evidence that you have given about the need under clause 194 to have a JR approach to the appeal process. What that does, however, is underline the power that the CMA has. Professor Furman, you mentioned earlier in evidence that it really matters who the leader of the CMA is. The area that I want you to comment on is whether you think that, under this process, there is sufficient political accountability for the decisions of the CMA. Such organisations are big, with the potential to have a huge impact on the economy of this country. Inevitably, they are deeply politically sensitive—or it is foreseeable that they will be—so are we not in danger of passing the buck too much to an arm’s length organisation like the CMA? Perhaps we should recognise that the decisions are inevitably political and that we therefore need a greater sense of political accountability. Professor Furman, could you start off on that?

Professor Furman: Political accountability is very much the broad approach. It is important that you have a body that approaches this transparently and predictably. I have a lot of respect for the role that you all play in the political system. You think that you should set the goals for consumer choice, innovation and so on, but it is important that what ultimately gets done is done in a much more judicial, regulatory way so that it is predictable for all the parties involved and does not change dramatically over time. In that, there is obviously the appeals process that was just discussed. That is not a political appeals process; it would be within the legal system.

I confess that I am not familiar with exactly how things would work in the UK. In the United States, Congress would have the head of the Federal Trade Commission, or whatever body was charged with this, up to testify. Generally, Congress would not ask, “Why did you bring that case yesterday?” but “Why aren’t you being more aggressive?” or “Why aren’t you being less aggressive?” They would try to oversee things at a strategic level, while leaving each case, decision and regulation to the regulator. Something like that system—I do not know exactly how you would do it in the UK—would be ideal.

[Jerome Mayhew]

Q Professor Fletcher, you are nodding. Would you like to expand on that?

Professor Fletcher: I fully agree. I can see why there is concern about discretion, but the CMA has shown that it takes its responsibilities seriously. It also understands that it is answerable to the Government of the day on a strategic level, rather than on individual cases.

To follow what Philip said, JR is not a walk in the park. It is a pretty serious test, which the CMA has faced occasionally in the past. It is a very serious expectation on the CMA. I support the view that if you want investment and open and competitive markets, you must have a transparent, consistent framework, which has lots of legal certainty. I worry that too much political intervention risks undermining that.

[The Chair]

Thank you. We have time for one more question, so I call Andy Carter.

--- Later in debate ---

[Vicky Ford]

Q So “get it clear” is what you are saying to us.

Tracey Reilly: It is a very complicated area, not just in terms of how you define fake reviews but in terms of the precise powers that regulators need in order to determine where, how and when fake reviews are occurring. AI will make that an even more complicated picture, so it is important to get that right.

[Jerome Mayhew]

Q Ms Chundur, you gave a very interesting stat earlier: £1.6 billion per year is spent on subscriptions that people do not want. One of your eight areas of concern is an opt-in clause for the subscription trap issue. You are in good company, because Citizens Advice came up with the same recommendation in this morning’s evidence session. However, we will hear later today from the News Media Association, which expressed exactly the opposite view in its written evidence: that the current wording of clause 252(1), which is essentially that you should be able to unsubscribe with one click without any unreasonable additional steps to go through,

“may hinder the provision of improved subscription offers that are in the best interest of the consumer”.

Can you comment on that? I will test the NMA if no one else does regarding what exactly it meant by that, and ask for examples of how it might hinder improved consumer engagement, but if the NMA can substantiate that, would you accept that it has a point?

Noyona Chundur: Perhaps, but I agree with what Citizens Advice said this morning: if your product is good enough and consumers want it, they will seek it out. Another point made this morning was that the consumer journey sits across multiple markets and is quite complex. That is where we are coming from. We are looking at the end-to-end consumer journey. In that context, consumers also want minimum standards. If you do not have minimum standards—if the default position is that you are just rolled on to another contract, and there is no opportunity to review whether that contract is the best for you, has the best price, is the best product or suits your particular circumstances—I am afraid that that does not necessarily give the consumer the best deal from a price or quality perspective.

[Jerome Mayhew]

Q Do you also recognise that there are people like me out there who signed up for a contract, and to be asked every single time, “Do you want to renew it?” when it is a core level of services that I benefit from, year in, year out, would be less constructive for my wellbeing? That is poor English, but you know what I am trying to say.

Noyona Chundur: Respectfully, I would say that most people will want the reassurance that the deal that they are getting every year is the best deal possible, is coming at the best price, is being delivered with the best service in mind and meets their needs, rather than the assumption that an algorithm or someone else has made that decision for them. Certainly the consumers we speak to want transparency, accessible communication and more choice. This is one way of giving them exactly what they want. I echo the sentiment of what was said this morning: if the product or service is good enough, people will sign up to it. It is nothing to fear, but it will raise standards and make for better competition and a more sustainable economy. Those are all good things, because they are being viewed through the prism of consumer accessibility and affordability.

[Andy Carter]

Q Tracey, you mentioned in your opening statement that a number of markets operate differently in Scotland. I wonder whether I could ask you to expand on that a little. What particularly were you referring to, and where does the Bill need to be amended to accommodate those markets operating differently?

Tracey Reilly: I probably had two or three examples in mind. One would be legal services, which are entirely devolved, so they are regulated entirely differently. Key parts of that market around complaints are regulated differently. Another would be one that we share in common with Northern Irish colleagues: the prevalence of off-grid heating systems. There may be ones where how you access services is simply different according to where you live; for example, there is the perennial issue of postal delivery in Scotland and Northern Ireland. Those were the types of thing that I had in mind.

We have regular and very constructive dialogue with the CMA about local issues, and about regional and sub-national issues. We hope that the Bill’s provisions will enable the CMA to deal flexibly and responsibly with those concerns. The framework that they operate, as with any body that has limited resources, makes prioritisation decisions on a UK-wide basis. We would like to ensure that regional and national differences, and differences for specific communities within the nations, can be dealt with as part of that. I think Noyona would probably welcome coming in on that point.

Employment Relations (Flexible Working) Bill

Jerome Mayhew Excerpts

3rd reading
Friday 24th February 2023 Commons Chamber

[James Daly]

Obviously, I applaud everything Watford-based, but my hon. Friend makes a very serious point—it was also made by the hon. Member for Bolton South East—which is that in order to make a difference, we must have such events. We must ensure that employers and others involved in the local economy, whether in Watford or elsewhere, take these issues seriously.

[Jerome Mayhew (Broadland) (Con)]

I am grateful to my hon. Friend for giving way, because many Members are seeking to intervene on this for some reason. I just want to draw the House’s attention to a veterinary practice in Rackheath in my constituency, where the building itself has been constructed to be flexible for people with autism to work there, both as veterinary practitioners and in the support services. Does that not go to show how, with foresight, we can make accessible for people with autism those areas of employment that were previously inaccessible?

[James Daly]

There is not much else I can say about that, other than that it is very good news.

--- Later in debate ---

[James Daly]

I agree. As has been said in relation to the importance of flexible working for family and all sorts of other reasons, it is important that a statement is made in law. Flexible working is already in the legislation that has been referred to, but we must make it very clear that this Parliament supports it if it can happen.

One of the things that concerns me about flexible working is the definition. We have already discussed the best form of flexible working, and there are sectors of the economy and parts of the workforce that are currently enjoying it, but I want to make this serious point. During the pandemic, flexible working was a necessity. My local authority decided to allow the vast majority of its staff to continue working from home. That may be a good or a bad thing—who knows?—but that was its decision.

However, there are considerations to be made. I have serious concerns about the impact of taking a huge sector of the workforce out of Bury town centre because the money that those people bring in to the urban centre is very important. I support flexibility in the sense that the hon. Member for Bolton South East set out, but it is not an open invitation to local authorities simply to continue arrangements that were put in place during the pandemic. What we are looking for is not flexibility for flexibility’s sake, but a system that allows proper access to the workforce for people who are being excluded and gives flexibility to people who have very good reasons to request it.

We often talk in the generality about a lot of things in this place, but the vast majority of the workforce in this country work in small and medium-sized enterprises of nine employees or fewer, such as in the sector that I worked in all my life. We must not underestimate the requirements on small businesses. Politicians can stand up and say words that make them feel good about themselves, but people still have to pay wages. There has to be a business there to allow flexible employment. Flexible employment cannot be imposed upon a business that cannot afford it. In vast sectors of the economy, it is simply impossible because people need to be in an office.

In my sector—this is why I mentioned my entry in the Register of Members’ Financial Interests—the challenges during the pandemic of being a conveyancing solicitor working from home were incredible. I would argue strongly that people in my sector need to be in the office. There needs to be that team environment, because it increases productivity. I am sure that it would work very well in other sectors of the economy, but we have to be open and honest about this. We cannot just impose principles on business if they cannot afford to pay the bills.

[Jerome Mayhew]

My hon. Friend is absolutely right that there is a balance between the needs of the employer and the perfectly fair needs of the employees. Does he agree that this Bill seeks to get the balance right by imposing a duty of consultation, not an absolute right?

[James Daly]

That is the exact reason why I can support it. The administrative burden that it would place on employers would not concern them. Essentially, the law is changing very little from the current position, so I completely agree with that point.

We always talk about big employers with thousands of employees that can put in place all sorts of work models, but the self-employed and small businesses cannot take advantage of this. Too often, we miss those people out of the conversation when we talk about employment rights and other things that are crucial to those sectors. To be able to pay the bills in this place, we have to ensure that small businesses and the self-employed are not burdened by over-regulation. They must be able to flourish and support employees.

The other thing that is quite clear from my sector and, I suspect, most sectors of the economy is that, although we talk about flexible working, if an employer does not allow a skilled solicitor to have flexible working, they will get a job elsewhere in about five seconds. The question here is not simply about having flexibility for flexibility’s sake; it is about skills and the sector. With the market we have at the moment—there are the best part of a million vacancies—employers who do not take advantage of employees with the correct skillset for their area of work will lose them, and they cannot be replaced in the modern employment market. In many ways, the employment market is addressing this problem internally, but skills are absolutely essential to this discussion as well.