Football Index Collapse: Lessons Learned

Debate between Jim Shannon and Ronnie Cowan

Wednesday 24th April 2024 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Blaydon (Liz Twist) on bringing the debate forward. She will recall leading a debate on a similar subject here a couple of years ago, and I was very fortunate and pleased to support her, just as I regularly support other Members in Westminster Hall, which is always a pleasure, by the way, because the issues are really important. The hon. Lady is right about this issue: it is important—it is important because some of my constituents have found themselves in this terrible malaise, having lost money, so it is good to return to it.

If the Minister does not mind me saying, I am very pleased to see him in his place, as he always tries to answer constructively the questions and queries we pose to him. I was remarking to him earlier that he performed really well in the debate on the Football Governance Bill last night in the main Chamber, where his final comment referenced, “They think it’s all over! It is now!” I am old enough to remember that saying in 1966. I know that the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), is far too young to remember that, but a whole lot of others here are not—I better be careful not to say too much now, or I will be reprimanded.

I took part in the last debate on the impact that Football Index has had on all our constituents, including mine—I will not mention their names, but I will refer to them. It is really good to be back here to discuss what lessons we have learned and what has changed. That was the question posed by the hon. Member for Blaydon: what has changed? Hopefully, the Minister can reassure us in his response.

The collapse of Football Index was detrimental to so many people, and some were undoubtedly financially ruined—I know someone who sadly was, although I am not able to put their name on record, but I have seen the detrimental effects. The situation has also highlighted the importance of being gambling aware. It is important that we get it right this time and the next time round. I was hoping that the hon. Member for Swansea East (Carolyn Harris) would be here, because she has been such a stalwart at the forefront of gambling issues. I admire her greatly, and she has taken up the subject in this House with real enthusiasm in order to make changes.

What is our football knowledge really worth? In football’s first stock market, people had fantastic prospects of making money based on how well they knew football. I know a whole lot about Leicester City, having been a loyal supporter since 1969, when I was a wee boy at school. That was not yesterday, by the way—it ages me greatly when people do the figures. The point I am making is that, although I do not know all about football, I love it. Most people here in this debate probably love football, but they may not know all the ins and outs of the subject matter before them.

The financial losses from this collapse have been absolutely devastating. I have read some absolute horror stories from people in my constituency and further afield. Some have lost hundreds of thousands of pounds that were invested in open bets on football players and their performance. It is also my understanding that the company folded with £124.5 million in remaining open bets—wow! Isn’t that truly extortionate? It shows the magnitude of what we have before us today and why this debate is so important.

Some 67% of people in Northern Ireland have been said to gamble, and they cover a range of ages, sports and other means. My hon. Friend the Member for East Londonderry (Mr Campbell) referred to all the other sports and the implications for them as well. Individuals must be aware of their gambling habits and the potential dangers that come along with gambling. Reports have suggested necessary recommendations for any similar scheme in future.

One point that we must get right is ensuring that any gambling company offering long-term bets will be able to cover payments to customers. That is to be covered by the Government’s forthcoming gambling White Paper. I look forward to hearing what the Minister has to say about the White Paper and how it will address some of the issues we have before us today. If it does not—with respect, Minister—we will need to see how it can be strengthened and enforced.

Others will make contributions. I am not sure whether the hon. Member for Inverclyde (Ronnie Cowan) is going to speak, but he has great knowledge of this subject. I hope he will intervene at some stage to give us some of his wisdom on the matter. I mean that honestly because he has a particular grasp of the situation.

[Ronnie Cowan (Inverclyde) (SNP)]

The issue is that when it comes to gambling products, we understand that there are rules and regulations in place. They are not to my liking, but they are there. This scheme and the successor schemes are designed to work in the grey areas—the dark shadows—of gambling. The Financial Conduct Authority did not even know whether it was responsible for them.

Hopefully, down the line somebody will be able to hold these companies to account. Their will is not to create an exciting thing for football fans to get more involved with and enjoy a game of football; their will is to take money out of people’s pockets. We know plenty of gambling products that are already doing that. I am not sure there is much in the White Paper at all that touches on FI. There has to be something that ensures the regulations are clear and understandable. It must also stop KiX: if KiX is up and running, plenty of other organisations behind it will be waiting to do exactly the same thing, and all they will do is extract money from punters’ pockets.

[Jim Shannon]

I thank the hon. Gentleman for that intervention. He has posed a few questions that are pertinent to the debate. I look forward to the contributions from the SNP spokesperson, the hon. Member for North Ayrshire and Arran (Patricia Gibson), and the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), and the questions they will pose in turn to the Minister.

We need to see a sea change that does away with the grey areas that the hon. Member for Inverclyde referred to and the uncertainty, where people can get sucked into the process. Ensuring that customers can get their money back is of major importance. Early day motion 697 was tabled on 25 November 2021. I am pretty sure the hon. Member for Blaydon was instrumental in tabling the EDM and ensuring that others signed it. I signed the EDM to show support and to urge the Government to do more to ensure that those owed money receive a full reimbursement.

As I have stated before, gambling is a personal choice. I am not here to tell anybody what they should or should not do; I will always try to give people choice if I can. At the same time, sometimes Government have to encourage people to be more aware of what the choices are. As the hon. Member for Inverclyde said, there are clearly occasions when that does not happen, and that is why it is important to have a system in place. While gambling is a personal choice, we hope that those choosing to do so are educated about the potential risks. The losses can be huge. I read one story—I thought about it long and hard—about a young man, probably in his early 20s, who lost £165,000: my goodness! He lost what he did not have. He found himself in all sorts of problems, and he stated that it completely turned his life upside down. How could it not, given that he lost that amount of money at an early stage in life?

Many have openly referred to the shame they feel and how such things have affected how they look at gambling. There is absolutely no doubt that the Financial Conduct Authority should have regulated Football Index, and there are still questions to be answered. I know this may not be the Minister’s responsibility, but I would really like to know what discussions have taken place with the Financial Conduct Authority and what it is doing to regulate the situation. There are still questions to be answered.

Although it is argued that FI was seen as an investment, not gambling, its business model still relied on money from constituents and it was undoubtedly fundamentally flawed, as some of my constituents are able to confirm. Many people state that they feel let down by the regulators and that more should have been done to ensure the system was working correctly.

I will conclude because I am conscious that others want to speak. I look forward to hearing from the two shadow spokespeople, the hon. Members for Barnsley East and for North Ayrshire and Arran, and the Minister. Consumer protection must be at the heart of the lessons learned. The FCA’s consistent view has been that all the products fell within its regulatory perimeter up until the collapse in March ’21. Evidentially, that is no longer the case, and therefore we need a legislative change and reassurance.

Legislatively, it is always better to put these things in black and white. I hope action is taken to support those who suffered losses as a result of the collapse. I urge the Minister and our Government to ensure that victims do not wait years for reimbursement. That would be unfair, and we have a chance today to urge the Minister to grasp that. I commend the hon. Member for Blaydon for bringing forward this issue; there is no one in the Chamber who does not think she has done exceptionally well.

Football Index Collapse

Debate between Jim Shannon and Ronnie Cowan

Tuesday 7th June 2022 Westminster Hall

[Ronnie Cowan (Inverclyde) (SNP)]

I congratulate the hon. Member for Blaydon (Liz Twist) on bringing forward this debate. I was assured as recently as this morning in this very room by a Government Minister that the gambling review White Paper is due in the coming weeks. Minister, we cannot keep meeting like this. Among a range of reforms, the gambling review White Paper must effectively regulate the digital age, and consumers must be better protected from Ponzi schemes.

BetIndex Ltd, trading as Football Index, was a sports betting platform. An operating licence was issued to BetIndex by the Gambling Commission in September 2015. It was BetIndex’s decision to dramatically decrease its dividend payment by 82% that led to a virtual market crash on the site. Scandalously, days before the crash, Football Index minted new shares in footballers, enticing consumers to purchase shares that some days later would be worth far less than their former value.

[Jim Shannon (Strangford) (DUP)]

One employee from the firm stated that 100 people were employed by Football Index. Some, but not all, of those had salaries of £1 million. Does the hon. Gentleman feel that the investigation should pursue the directors, who seem to be well off at this moment?

[Ronnie Cowan]

Absolutely. I will touch on that briefly later. I watched “Question Time” from Belfast a couple of weeks ago, and I was surprised that the hon. Member for Strangford (Jim Shannon) did not intervene at any point.

BetIndex failed to properly notify the Gambling Commission of the nature of the product in its licence application. The Gambling Commission could have responded better, with earlier scrutiny of the product offered by BetIndex, quicker decision making and action, and better escalation of the issues, but it did not do so. The Gambling Commission ignored warnings that its business model was flawed and that customers’ money could be at risk. Although Football Index was not regulated by the Financial Conduct Authority, the report identified areas for improvement for the FCA. Those included its speed of response to requests from the Gambling Commission.

Football Index is a scandal that underlines the need for wholesale reform of the gambling industry and raises significant questions about the Gambling Commission, given that it saw fit to license the platform and failed to enact adequate oversight. In the regulated sector, when people gamble they should have confidence that they are doing so on the basis of the outcome of a wager. It should not be a gamble on the solvency or sustainability of the licensed operator.

This scandal shows how much a gambling ombudsman is needed to ensure that consumers have a clear avenue for redress in circumstances such as the Football Index scandal. The Government said that they would not use public funds to compensate customers who have lost money, despite customers losing up to, at a modest estimate, £90 million. BetIndex Ltd was approved and operated a licence authorised by the Gambling Commission. The failure is on the regulator as much as it is on the Ponzi scheme that stole consumers’ cash. The Government should be doing more to protect their citizens and should act swiftly when they have let them down. The ex-CEO of Football Index, Adam Cole, has been named persona non grata by the Jersey Gambling Commission, with the regulator citing the executive’s track record as the reason for its decision. While the Jersey Gambling Commission has stepped up, there are no immediate plans for the UK Gambling Commission to act.

At the heart of the scandal are those robbed of their money. One football fan has revealed that he lost £98,000, saying:

“It has completely torn my life apart…It is all the money I’ve ever saved, almost everything I’ve ever had and has put quite simply left me on the verge of committing suicide.”

This is a wrong that needs to be made right through better legislation, stronger enforcement and compensation to those swindled by BetIndex.

Post Office Closures

Debate between Jim Shannon and Ronnie Cowan

Tuesday 19th October 2021 Westminster Hall

[Jim Shannon]

I thank my hon. Friend for his intervention, which encapsulates what we all feel about how post offices have an integral part to play in the future. We look to the Minister for indication of his vision for the future of post offices, and the importance of having them as an integral part of local communities.

[Ronnie Cowan (Inverclyde) (SNP)]

One of the issues in my constituency is that when one post office closes, rumours start about all the other post offices; I am sure we all feel that. Because of the uncertainty and the precarious environment that post offices are operating in right now, it is very hard to get anybody to invest in them and keep them going. Talking about the long-term future, the Government either have to accept and admit that there is no future for post offices, or they have to legislate to protect the long-term future of the post offices in all our constituencies.

[Jim Shannon]

The hon. Gentleman is absolutely right. When the Minister sets out his vision for post offices, as I hope he will, he has to retore confidence in the post offices so that they can see a future for themselves financially and viably.

Yesterday morning I had a lady in my office thanking my staff for persevering with her attendance allowance form. She had been notified that her appeal had been upheld. I listened as my staff members reminded her that this additional money was hers, and that she should use it to make her life easier—to get a cleaner or to help pay for a taxi rather than walking everywhere. She said something that struck me and was very important: “I will get a taxi to get my post office money.” It was very clear what she was saying. “I can’t use this card stuff, and they help me to get my cash where I can get all my bills sorted. I don’t know what I will do when they don’t do cash anymore.”

This is replicated dozens of times across my constituency, and I know it is replicated across all of the United Kingdom of Great Britain and Northern Ireland. The availability of the help and support that post office staff provide to vulnerable people in our communities cannot be overstated. That lady also said that her life would be turned upside down if she could not get her pension and her money sorted. She said, “The girl in the post office put some money on my gas and electric, and my TV licence bill. She does it all.” This lady is in close contact with the people in the post office. I am so thankful for all those staff who take the time to do what those in a busy petrol filling station simply cannot; I mean no disrespect to them, but it does underline the importance of post offices.

With more and more bank branches closing down, the role of the post office for vulnerable people and for businesses that cannot lodge cash easily without it is more vital than ever, so I urge the Government to ensure that we play our part in the retention of post office services. We should remember that although a large number of people operate online for the majority of things, there is also a large vulnerable section of society who do not operate online and who are frightened to do so because of security concerns. Again, I seek the Minister’s reassurance in relation to this security issue. I will give him another example, which concerns one of my constituents, because I do not believe that the vulnerability of some elderly people to scams can be underlined enough.

Only last month, a man in my constituency lost a substantial amount of his savings because he was scammed through an online system. Many of our older people and other vulnerable people are increasingly refusing to try any online payments, just because they are not sure whether they have the security that they need so much. My parliamentary aide’s mother had a discussion with her private pension provider regarding the transfer of a bulk payment. Coincidentally, that afternoon she received a message on her phone, apparently from HMRC, regarding an outstanding tax bill. Let us be quite clear—HMRC does not make telephone calls to tell people about tax bills. If someone receives such a call or message, it is a scam, and that is a fact. Indeed, I received a phone call here at Parliament just before the recess, telling me to contact a particular number immediately in relation to something similar. I contacted my accountant and asked him about it, and he said, “Jim, HMRC do not contact you about any HMRC business by phone. They will contact you by letter. If you get a phone call supposedly from them, it’s a scam.” He was quite clear about that.

The mother of my parliamentary aide, Naomi, rang her, and Naomi told her mother to do nothing about the message until she had looked at it. It was a scam, but one timed in such a way as to be believable. Not everyone has a child who understands the tax system so well that they can spot a scam, which perhaps underlines the importance of this issue.

Fears about these issues make people’s ability to head to their local post office and have a local, friendly staff member help them to pay their bills safely and to get things sorted out vital. How important it is to have the accessibility to that service from someone an individual knows and who has a face they recall and trust—trust that has been built up over many years. I believe that every speaker today will endorse that.

The post office is vital. It is okay to have all the other shops and petrol stations where people have access to a post office service, but people also need to have someone they know. Post offices give that reassurance, so they are vital, and we must do our part to protect them. In doing so, we must protect our service provision, which is even more important for our elderly community, who rely on it and cannot do without it.

Universal Basic Income

Debate between Jim Shannon and Ronnie Cowan

Tuesday 13th October 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to participate in this debate. I thank the hon. Member for Inverclyde (Ronnie Cowan) for setting the scene and I am pleased to make a contribution. I am also pleased to see the Minister. I believe he will do his best to respond to what we are asking for.

As others have said, covid-19 has been with us over the past few months. I recollect many conversations with constituents about these matters back in March. Never at any point did I honestly think we would end up where we are now, with these restrictions in place. Even as we were fast hurtling towards the changes, I never envisaged us being here.

I thank the Government, Ministers, the Chancellor and everyone who has been forthright and helpful. Others have done so, but I would also like to put it on the record, as it is important to include it in Hansard. Many of my constituents in Strangford have survived until now because of the Government’s commitment and help. To be honest, those people would not be there without that, so I put on the record my thanks to the Minister.

As elected representatives, the nature of our job means that people do not necessarily come to us to tell us how good things are or to say thank you, although many do and we appreciate that. People come to us because they have concerns and worries. Some have come to me—others have referred to this—because they fell outside the scheme.

Even with all the schemes that the Government have brought forward, it is clear that people have missed out, including the 3 million people referred to in a question to the Prime Minister during his statement on covid-19 yesterday, as well as the self-employed and directors. I do not want to labour the point, but they invested their profits and income back into their family businesses, thereby employing 12, 15 or even 20 people. But when it came to helping them, the help was not there.

Why do I look sympathetically on this particular methodology of benefit? It is because universal basic income could be the system to help those who did not receive the income they needed. I am not being critical of the Government, but I want to put that on the record. If we cannot help people, we have to consider different ways of doing things. That is why the hon. Member for Inverclyde has promoted this issue and other Members have supported it.

The experience of my constituency of Strangford is no different from that of the hon. Member for North East Fife (Wendy Chamberlain), who said that tourism is important to her constituency. The core economic driver of Ards and North Down Borough Council, which covers the majority of my constituency, is based on tourism. Tourism is vital because it provides income and jobs, thereby keeping the whole thing going.

I am realistic about the system. I understand that the Government do not have bottomless pockets or a money tree at the bottom of their garden. There is no money at the end of the rainbow, so they have to work practically with the moneys that they have. I do believe, however, that the Minister should at least consider a pilot scheme for universal basic income, so that we can judge and consider it. Can we pay for it? That is important. We have to be realistic and honest. Can we reach out and help those people who have missed out, including in my constituency? Those are the people on whose behalf I am speaking today.

There are some 52 million adults aged 18 or over in the United Kingdom, and 12 million children and young people under 12. I understand the economics, the figures and the statistics that mean that some earners are taxed at a higher rate. My life is no different from that of anybody else, and the same is true of the lives of others in this Chamber. Society is judged by how it looks after those who are less well off. When I was a child—that was a long time ago, by the way—we never had much back in those days. It was a fact. We did not have material possessions, because that was the way it was in those days, but it made me more understanding of those who need help. That is why I am here today, to speak up and to support the hon. Member for Inverclyde.

The Minister is a compassionate person as well. I believe in my heart that he understands very well the policy we are putting forward and why it is so important. Can we do better than universal credit? I felt a wee bit embarrassed sometimes whenever people came to me during the covid-19 crisis and I said, “You can get universal credit.” I knew right away, though, that the guy or lady across the table had a business from which they were earning £300 a week—some were earning more—and I had to tell them, “Look, £94.50 is what you get.”

I understand that the Government offered what they could—I am not criticising that—but there must be a way to ensure that those businesses can hold on long enough so that they can then turn the corner and do better. I am really conscious of the issues. We need conditions when it comes to universal basic income. I understand that some of the naysayers are saying that it could reduce the incentive to work. Well, I tell you this: every person who came to me looking for help wanted to work. They wanted to continue to work and they wanted that opportunity. They just needed that wee bit of help to get them over the line. The Government have, in fairness, responded positively, but I wonder exactly what we need to do.

[Ronnie Cowan]

I should perhaps have said this earlier. One complaint about basic income is that it makes people indolent because people are paid for doing nothing. I refer the Minister to all the pilots that have been run throughout the world, which show that there is absolutely no evidence for that whatsoever. People the world over are just like us: they want the opportunity to work and earn a wage. Basic income does not make people indolent.

[Jim Shannon]

I wholeheartedly agree. I was sympathetic to the really good question that the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) asked the Prime Minister yesterday in the Chamber. I am not saying that because he is sitting across from me; I told him it was a good question at the time. It was about the minimum wage. I understand how it works. There are arguments to reduce the working week to four days and to reduce wages, but if someone on a minimum wage loses wages, they have nowhere to go. This is about every penny they have.

I remember the stories that people in my constituency have told me. They managed everything almost to the last pound for that week. Even a small reduction in what they have will mean that they will not be able to pay their rent or their car off. They may be paying off furniture for their property, too. The whole thing becomes a real difficulty. If somebody takes ill, it becomes a real problem. The hon. Gentleman’s question was pertinent, because I could relate personally to what he was saying. I thank him for that.

In opening the debate, the hon. Member for Inverclyde referred to other schemes. I read in the briefing about the Finnish experiment. It is not all about money. I am conscious of time, so I will come to my conclusion fairly quickly. Those who participated in the Finnish experiment

“were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness. They also had a more positive perception of their cognitive abilities, i.e. memory…and ability to concentrate.”

Giving people that help improves their quality of life, physically and mentally. We have to look at that, because there is cost otherwise. If the Government or others are not able to help, there are impacts on people’s physical and mental health, which then has to be paid for by the NHS. I suggest that although the Finnish experiment may not be the best example, it did highlight that issue.

As I see every day, those who are under financial pressure and who are worried about their future also face mental stress and difficulty. I meet people every day, every week, in my office—my staff do most of that, to be fair—and recently, when universal credit first came in, I remember that there were great problems. The hon. Member for Glasgow South West (Chris Stephens) and I have spoken about these things on a number of occasions, and we understand that.