Finance (No. 3) Bill

Jim Shannon Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 12th November 2018 Commons Chamber

[David Linden]

My hon. Friend has been campaigning on this far longer than I have, and he has a strong track record of pursuing the issue.

[Jim Shannon (Strangford) (DUP)]

I reinforce what the hon. Member for Inverclyde (Ronnie Cowan) said. Many Members on both sides of the House, including DUP Members, want to see the change made in April 2019 because, during the six-month period proposed by the Government, as many as 300 people could commit suicide due to their addiction. The hon. Member for Glasgow East (David Linden) mentioned health and, from that point of view, the change needs to come sooner. The industry has had plenty of time to sort it out; it does not need more time.

[David Linden]

The hon. Gentleman’s intervention comes before 10 o’clock, which is quite unusual. In all seriousness, he is absolutely spot on. We all know the considerable influence of the DUP when it comes to marching through the Lobby with the Government. What he has said tonight should be heard on the Treasury Bench. The Government cannot count on the support of the DUP when it comes to delaying the reduction in the maximum stake from £100 to £2, which should send a very strong message.

I believe that in the coming days and weeks we will see a groundswell of support not just among Opposition Members but among Conservative Members, too, because this is not, and should not be, a party political issue. This is an issue of public health, and hopefully the Government will see sense in the coming weeks and not try to have a fight on the Floor of the House, but do the right thing by our communities.

On the so-called national living wage, the under-25s were, yet again, mugged by this Government. They are still excluded from the national living wage, which in itself is simply a con trick. The national living wage is not a real living wage, and it falls far short of the true living wage set by the independent Living Wage Foundation.

Over the course of the debate so far, and I suspect over the course of the evening to come, we have heard Scottish Tories say how wonderful this Budget is, but I challenge those Members: whether it is in Banff and Buchan, Bannockburn or Prestwick, can they seriously go to their local high school and say to the children who will be going on to do an apprenticeship that they think they are worth only £3.90 an hour? The reality is that, by marching through the Lobby to support this Finance Bill, they are saying that is right. The fact that none of them has sprung to their feet to say that they think £3.90 an hour is an adequate rate of pay for a fair day’s work sends a message.

In clause 5, somewhat predictably, the Government seek to give a handout to high earners. The Chancellor’s Budget gave basic rate taxpayers an extra £21 a year, compared with £156 a year for those on the higher rate. In contrast, the SNP Government have introduced progressive taxation in Scotland, where we have the powers to do so. Seven in 10 taxpayers in Scotland will pay less tax this year than they paid in 2017-18 on a given income, but it is right that those on higher incomes—that includes us as Members of Parliament—should pay a modest amount more in tax. I am perfectly comfortable with that as a concept because I know that investment in housing and in decent public services cannot be done on the cheap. It is right that those of us who earn higher salaries should pay a little more to support better public services for the good of everyone in society and our communities. But what is before us today gives tax cuts to high earners and that is just not right.

In essence, this Bill was about choices for the British Government. They have chosen to give tax cuts to high earners and to do nothing for the WASPI women; they have chosen not to give under-25s equality and a fair day’s pay for a fair day’s work; they have chosen to plough ahead with universal credit, despite it being fundamentally flawed and leading to reductions in household incomes; and they have chosen to perpetuate austerity right across these islands. But the Chancellor is not the only person with choices to make because, with each passing day, the people of Scotland are realising that they, too, will soon have a choice to make. They can choose to stay in an inherently unequal, unfair United Kingdom which is riddled with austerity and heading over the cliff edge of a hard Brexit, or they can choose an independent Scotland free from the obsession with austerity economics that so epitomises this Finance Bill. It is for that reason that I cannot support the Bill this evening.

[Stephen Kerr (Stirling) (Con)]

It is, as always, a pleasure to listen to the hon. Member for Glasgow East (David Linden), who treats the House to the usual rendition from the Scottish nationalists of why they stand for independence—in truth, that is all they stand for.

I rise to make a short contribution in this debate on the Second Reading of the Finance Bill, and I will restrict my comments to clause 61. I am mindful that I did not agree with my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on the issue of safe standing at football matches, but I have nothing but admiration for the principled stand she has taken on the matter of resetting the maximum stake for fixed odds betting terminals to £2, with that measure to be effective by next April at the latest. I completely agree with her position, which is why I have been willing to attach my name to future amendments to this Bill brought forward by friends. Apparently its implementation will take so long, but I really do not believe that that stands up to scrutiny. The Government currently say that it needs to be put in place for next autumn, but I really believe it does not need to take that long.

The simple fact of the matter is that the longer we wait to implement this measure, the more damage is being inflicted on the most vulnerable people in our society. Some 43% of the people using fixed odds betting terminals are either problem or at-risk gamblers, and when we consider that 230,000 sessions on these machines in a single year resulted in losses of more than £1,000 each session, we see that any further delay in reducing the maximum stake to £2 is not justifiable in societal terms. It is also not justifiable in terms of the time that is really needed to make this adjustment happen. It is not justifiable in terms of the ongoing social costs, with the misery that occurs when individuals lose control of their decision-making faculty to a gambling addiction. And I simply cannot accept, on the grounds of any sort of morality that I would wish to be associated with, that the special pleading of the betting firms should take any sort of a priority over the damage inflicted on society, on families and on children by those who are suffering from gambling addiction and for whom these machines are an outlet.

The startling statistic is that for every second of every day these machines cost their players £57 in losses. There are 33,000 of these fixed odds betting terminals in betting shops across the UK. A helpful live ready-reckoner on the website of the all-party group on fixed odds betting terminals calculates to the second how much has been lost on these machines since the Government first called for evidence on what the maximum stake for these terminals should be. That happened way back in October 2016, and the last time I checked, which was earlier today—so after 749 days—this figure is in excess of £3.7 billion. I am not prepared to stand by—I could not do so as a matter of conscience—and do nothing when action is required. The Government have already accepted that that action is necessary and described these machines in the most disparaging terms, so I ask simply that the measure be implemented in April, at the soonest point.

Perhaps a justification will be put forward that somehow it will cost the Treasury lost revenue, but at what price? Are we really saying that there is not a more productive use for these billions of pounds of economic activity in our country? I think that there is. We should not underestimate the devastating effects of the vice-like grip of an addiction such as gambling. The Government should act now to do what they have already resolved to do—not in 12 months’ time, but by April next year at the very latest.

[Jim Shannon]

Is it not a fact that the sector and industry have had 18 months to get themselves ready for this? They knew it was coming and should have got their house in order. They do not need any more time.

[Stephen Kerr]

The hon. Gentleman is quite right. Reference has already been made to the KPMG report, which was provided at the instigation of the Association of British Bookmakers. KPMG itself advised that that report

“should not therefore be regarded as suitable to be used or relied on by any other person or for any other purpose”

because its terms and scope were determined by KPMG’s client, the Association of British Bookmakers. Paddy Power Betfair wrote to the Prime Minister because it was so shocked that the report could be used as a credible source for decision making, saying that some of the assumptions in it were unrealistic.

Overcoming addiction is not simply a matter of exercising willpower. Addiction robs people of the power to decide for themselves. We in this House have the power to take the necessary measures that will protect the most vulnerable people, the most vulnerable families and the children of those families. I very much hope that the Government will take the decision to do that earlier.

Finance (No. 3) Bill

Jim Shannon Excerpts

Committee: 2nd sitting: House of Commons
Tuesday 20th November 2018 Commons Chamber

[Sir Peter Bottomley]

The hon. Gentleman raises a point that I was going to come on to indirectly, but I will now make it directly. These fixed odds betting terminals were not allowed in betting shops in the Republic of Ireland, so how could the Association of British Bookmakers go around thinking that it was normal? That leaves open the question that he has raised: how can we make sure that people in Northern Ireland get the change they need? If it is a devolved matter and we need a Northern Ireland Government to solve the problem, I do not have an instant solution.

[Jim Shannon (Strangford) (DUP)]

Yes, it is a devolved matter and it would take the Assembly to make those decisions. We do not have a working Assembly, as the hon. Gentleman knows. In the meantime, therefore, nothing happens in relation to legislation that is passing here. It is my intention, after discussions with the Minister involved and with the support of the House, of course, to try to ensure that this legislation is Northern Ireland-bound, as it should be.

[Sir Peter Bottomley]

The Committee will recognise the importance of what the hon. Gentleman has said, and I am very grateful for it.

Some of the tactics used by the betting shop owners have been disgraceful. I hope that some investigative journalist will write it up, page by page, date by date, and explain how it has been counterproductive for these companies’ own shareholders. GVC, which in March this year confirmed the takeover of Ladbrokes Coral, will pay £800 million less because of the date of the change to £2. Three years ago, William Hill’s share price was about 400p a share. At the time of the discussion about whether the fixed odds betting terminal limit would come down to £2 either in October next year or in April the year after, its share price fluctuated between 300p and 220p per share. It is now less than 180p. For every month it went on with its campaign, it destroyed the value of its shareholders’ stake in the companies that were taking profits—as was the Treasury, in tax—from these unbelievably unjustified machines.

When Paddy Power said that these machines were not needed for betting shops, other gambling companies should have paid attention. When people write up this failure of lobbying and the counterproductive tactics used, I hope that they will take it as a role model. We need a word to describe Parliament asserting itself to Government, but another two words to respond to the way in which Government have reacted to that, and those words should be, “Thank you.”

--- Later in debate ---

[Patricia Gibson]

I am glad that the Minister has given us that clarification. As he says, I would be more comfortable with a broadbrush approach encompassing lots and lots of factors, such as I those I set out in my speech. However, I have listened to what the Minister has said, and I will certainly give it some thought.

[Jim Shannon]

I thought the hon. Member for Torbay (Kevin Foster) was going to go before me, but he has not bobbed, so he is obviously not going to. I always follow in his footsteps—I am always glad to do so, by the way, as he knows—but on this occasion I miss his comments, which I am sure would be more than helpful to us.

We are all very aware of the reason for these amendments. It is tremendous to be in the Chamber among many Members from across the House who are of the same opinion, including—he will forgive me if I say this, but I have to say it—perhaps a wee bit belatedly, the Minister, who is also committed to where we are on this.

If she does not mind my saying so, I would like to commend the hon. Member for Chatham and Aylesford (Tracey Crouch) for her principled stand, her courage and what she has done to make this happen. The commitment she has shown does my heart good and does the heart of everybody else good. By the way, I am not surprised that she said 3,000 people had contacted her afterwards. I did not have 3,000 people contact me afterwards, but I had a large number and, for the record, every one of them commended the hon. Lady for her obvious commitment. The reason for the amendment is simple: the need for a massive lowering of stakes is clear.

I also thank my good friend, the hon. Member for Swansea East (Carolyn Harris), for all her endeavours through the all-party group on FOBTs, which has done tremendous work. The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) and the hon. Member for Inverclyde (Ronnie Cowan) have also endeavoured, through the APPG, to ensure all that hard work came to fruition.

The one thing that sits in my mind is this: why was it important to have those six months slip back from October to April? It is very simple: as has been said, 300 lives—maybe more—were saved. That is a fact.

I am mindful that last week we had the Gambling with Lives event, which the hon. Member for Sheffield Central (Paul Blomfield) referred to. I thank him for initiating that event. I was very glad to be there with other Members and to support him. There were two people there who I knew long before the start of this FOBT campaign, which began about 18 months or two years ago. They are Mr and Mrs Peter Keogh from Enniskillen, who lost their son, Lewis, to a gambling addiction and who even today feel the heartache of that event.

It is for those people that we do these things. It is for our constituents whose lives will be saved because of it, and for those who have lost loved ones and feel the great pain of the loss of someone close to them, that today we can collectively make this legislative change in this House. That is why we make the effort.

The Government accept that they need to lower the stakes; they accept that damage has been done to individuals and families; they accept the fact that the ability to bet as much as £100 every 20 seconds on electronic casino games such as roulette is shocking; and they accept the campaign by anti-gambling campaigners that highlights the fact that machines let people lose money too quickly, leading to addiction and social, mental and financial problems.

The Minister responded to the previous speaker, the hon. Member for North Ayrshire and Arran (Patricia Gibson), about things we must address, including online gambling and how it is promoted on TV. At this early stage, I would also like to put down a marker about scratchcards. I was just telling a story to my hon. Friend the Member for South Antrim (Paul Girvan). One day, I saw a lady with two children in a shop. She probably did not have £5 to spare. She was ahead of me in the queue and she put down £5. I was not being nosy, but her wallet probably only had two fivers in it, yet she spent £5 on scratchcards. She went outside to rub the numbers off them and by the time I went outside I saw that not one of the cards was successful.

I thought to myself, “How very sad.” That lady was probably looking at her financial needs for that week being provided by the turn of a scratchcard, which did not deliver. Other things need to be done, but I look forward to the things that the Minister referred to in his intervention on the hon. Lady.

Those arguments had all been accepted, but rather than looking at the human cost it appears that the Government wished to shore up the finances and allow thousands more people to gamble everything away. The situation is like cancer research finding a cure to cancer and the NHS saying, “Well, we have all the chemotherapy, which needs to be used, so we won’t pay for the life-saving drugs until stocks are down. We can’t afford to do this.” That is horrific. I say to the Minister, with respect, that the more I see of this Government's ability to put blinkers on and look only at one aspect—the pounds and the pence—rather than at the entire argument about the need to lower stakes, the more disheartened I become.

The Salvation Army, which deals with the problems that gambling brings to the community, has said:

“It is well acknowledged that FOBTs have caused concern across the political and social spectrum. FOBTs have been labelled the ‘crack cocaine’ of gambling. One gambler told us that he spent £2,000 a day on FOBTs at bookies without being challenged.”

[Paul Girvan (South Antrim) (DUP)]

I appreciate my hon. Friend’s reference to the Salvation Army. One of the other issues that I have major concerns about—I wonder whether my hon. Friend agrees—is the accounts of people being given a line of credit of £1,500 without any credit checks on their ability to pay it back. People have been given a £1,500 line of credit and unfortunately it ends up being a potential noose—and I mean that—around their neck. That problem is arising and it is caused by those who do not do checks. Any other financial industry would do checks to ensure the person had the ability to pay the money back.

[Jim Shannon]

I thank my hon. Friend for his wise intervention.

The Salvation Army also says:

“Another man who became homeless as a result of his addiction and who was helped by the Salvation Army lost over £30,000 on gambling machines.”

I do not think that there is one Member in this Chamber who would not be able to recollect a story of this kind from their constituencies. It is the story of the man who plays on a FOBT machine on a Friday night and puts all his wages on it, before going home to his wife, who is looking for the money to buy the groceries, and their children. Those are the stories of real life; those are the stories of addiction; and those are the stories that we want to stop in this Chamber today.

That is why we are keen for the Government to implement as soon as practicable the proposed maximum stake limit of £2 for FOBTs. It is of some concern that in the Budget the timeframe for implementation was to have been delayed to October 2019. We note that some campaigners said it would be possible to implement it in April 2019 and that the Government have acceded to that. That apparent delay was deeply disappointing. The right hon. Member for Chingford and Woodford Green referred to the amendment with over 100 Members’ names on it. What changed the Government’s opinion was those 100 names from across the Chamber. I am very pleased that we have achieved that change.

I agree with the change and I ask the Government simply to do the right thing. They seem to have been held to ransom by the gaming industry. Therefore, it should not have surprised me to see how the EU—I use this comparison; I am sure many Members will understand it—has held this proud nation of the United Kingdom of Great Britain and Northern Ireland to ransom, and how our Government have capitulated at the cost not of £400 million, the estimated lost tax revenue, but £39 billion, and, most importantly, the sovereignty of Northern Ireland and the sanctity of the Union.

You may not believe that the two are linked, Dame Eleanor, but they are. You may not believe that that should be mentioned in this debate, but it has been. The Government’s decision making is as flawed here as it is in selling Northern Ireland and the backstop. Do the right thing, stop allowing gambling addictions to destroy families and protect people from themselves, in the same way that people must wear a seatbelt whether they want to or not. Step in and step up. I support the amendment and I look forward to working with hon. Members to do even more in this Chamber to address gambling addiction in the years to come.

Amendment 16 agreed to.

Clause 61

Remote Gaming Duty: Rate

Amendment made: 17, page 44, line 25, leave out “1 October 2019” and insert “1 April 2019”.—(Gareth Johnson.)

This amendment is consequential on Amendment 16.

Clause 61, as amended, ordered to stand part of the Bill.

Clause 62 ordered to stand part of the Bill.

Schedule 18 agreed to.

New Clause 12

Review of public health effects of gaming provisions

“(1) The Chancellor of the Exchequer must review the public health effects of the provisions of section 61 of and Schedule 18 to this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the effects of those provisions in reducing the negative public health effects of gambling, and

(b) the implications for the public finances of the public health effects of—

(i) those provisions,

(ii) the operation of the law relating to remote gaming duty and gaming duty if those provisions were not given effect.”—(Ronnie Cowan.)

This new clause would require a review of the public health effects of gaming provisions.

Brought up, read the First and Second time, and added to the Bill.

Clause 15

Offshore Receipts in Respect of Intangible Property

Question proposed, That the clause stand part of the Bill.

[The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)]

With this it will be convenient to discuss the following:

That schedule 3 be the Third schedule to the Bill.

Clause 16 stand part.

That schedule 4 be the Fourth schedule to the Bill.

Clause 19 stand part.

Amendment 19, in clause 20, page 12, line 26, at end insert—

“(8) The Chancellor of the Exchequer must, no later than six months after the passing of this Act, lay before the House of Commons a review of the effects of the changes to the controlled foreign companies regime made by this section.

(9) In circumstances in which the United Kingdom has left the European Union without a negotiated withdrawal agreement, the review in subsection (8) must consider the impact of this on those changes.”

Clause 20 stand part.

Clauses 21 and 22 stand part.

Amendment 3, in schedule 7, page 223, line 27, in schedule 7, at end insert—

“(5) The Treasury shall by regulations require that a CGT exit charge payment plan be published on a public register.”

This amendment would require the beneficiary of a trust entering a CGT exit charge payment plan to provide information about the source of its income on a public register.

Amendment 4, page 227, line 13, at end insert—

“(2B) The Treasury shall by regulations prescribe a CGT exit charge payment plan be published on a public register.”

This amendment would require the beneficiary of a trust entering a CGT exit charge payment plan to provide information about the source of its income on a public register.

That schedule 7 be the Seventh schedule to the Bill.

Clause 23 stand part.

That schedule 8 be the Eighth schedule to the Bill.

Clauses 46 and 47 stand part.

Amendment 23, in clause 83, page 60, line 8, at end insert—

“(8) No regulations made be made under this section unless the Chancellor of the Exchequer has laid before the House of Commons a report on how the powers in this section are to be exercised in each of the scenarios in subsection (9).

(9) The scenarios to be considered in the report under subsection (8) are—

(a) if either of a—

(i) negotiated withdrawal agreement, or

(ii) framework for the future relationship with the European Union have not been ratified under section 13 of the European Union (Withdrawal) Act at the time of the United Kingdom ceasing to the a member of the European Union, and

(b) if both of a—

(i) negotiated withdrawal agreement, or

(ii) framework for the future relationship with the European Union have been ratified under section 13 of the European Union (Withdrawal) Act at the time of the United Kingdom ceasing to the a member of the European Union.”

Clause 83 stand part.

New clause 5—Impact analyses of the anti-avoidance provisions of this Act—

“(1) The Chancellor of the Exchequer must review the impact of—

(a) section 15 and Schedule 3,

(b) section 16 and Schedule 4,

(c) sections 19 and 20,

(d) section 22 and Schedule 7,

(e) section 23 and Schedule 8,

(f) sections 46 and 47, and

(g) section 83

of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the impact of those provisions on child poverty,

(b) households at different levels of income,

(c) the impact of those provisions on people with protected characteristics (within the meaning of the Equality Act 2010), and

(d) the impact of those provisions on different parts of the United Kingdom and different regions of England.

(3) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland.

“regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of the tax avoidance provisions of the Bill on households with different levels of income, on child poverty, people with protected characteristics and on a regional basis.

New clause 6—Analysis of effectiveness of provisions on tax avoidance and evasion—

“(1) The Chancellor of the Exchequer must review the effectiveness of—

(a) section 15 and Schedule 3,

(b) section 16 and Schedule 4,

(c) sections 19 and 20,

(d) section 22 and Schedule 7,

(e) section 23 and Schedule 8,

(f) sections 46 and 47, and

(g) section 83

of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the effects of the provisions in reducing levels of artificial tax avoidance,

(b) the effects of the provisions in combating tax evasion, and

(c) estimates of the role of the provisions of this Act in reducing the tax gap in each tax year from 2019 to 2022.”

This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effectiveness of the provisions of the Bill in tackling artificial tax avoidance and tax evasion, and in reducing the tax gap.

New clause 14—Review of effectiveness of provisions on tax avoidance—

“(1) The Chancellor of the Exchequer must review the effectiveness of the provisions of this Act relating to tax avoidance and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) In this section, “the provisions of this Act relating to tax avoidance” means—

(a) section 15 and Schedule 3,

(b) section 16 and Schedule 4,

(c) sections 19 and 20,

(d) section 22 and Schedule 7,

(e) section 23 and Schedule 8,

(f) sections 46 and 47,

(g) section 83.

(3) A review under this section must consider in particular—

(a) the effects of those provisions in reducing tax avoidance and evasion,

(b) the effect of those provisions in inducing new tax avoidance measures unanticipated by the Act, and

(c) estimates of the efficacy of the provisions in reducing the tax gap in each tax year from 2018-19 to 2028-29.”

This new clause would require a review of the effectiveness of provisions on tax avoidance.

New clause 15—Report on consultation on certain provisions of this Act (No. 4)—

“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).

(2) Those provisions are—

(a) section 15 and Schedule 3,

(b) section 16 and Schedule 4,

(c) sections 19 and 20,

(d) section 22 and Schedule 7,

(e) section 23 and Schedule 8,

(f) sections 46 and 47,

(g) section 83.

(3) A report under this section must specify in respect of each provision listed in subsection (2)—

(a) whether a version of the provision was published in draft,

(b) if so, whether changes were made as a result of consultation on the draft,

(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”

This amendment would require a report on consultation undertaken on certain provisions of this Act – alongside new clauses 9, 11 and 13.