Statutory Gambling Levy

Paul Blomfield Excerpts

Tuesday 7th June 2022 Westminster Hall

[Carolyn Harris]

I draw the hon. Gentleman’s attention, again, to the Gambling Commission’s own words that the scare around the black market has been grossly overestimated. That is from the Gambling Commission, not from me.

[Paul Blomfield (Sheffield Central) (Lab)]

I was involved in the campaign to regulate the payday lending industry. Does my hon. Friend recognise that in order to protect its profits, the sector’s big argument was, “Don’t touch us, because the threat is the black market”?

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[Scott Benton (Blackpool South) (Con)]

It is a pleasure to speak under your chairmanship, Mr Betts. I refer hon. Members to my entry in the Register of Members’ Financial Interests and thank the hon. Member for Swansea East (Carolyn Harris) for securing the debate.

With the current review of the Gambling Act 2005 drawing to its long-awaited close—hopefully; we have been here many times before over the last 18 months—this is certainly an opportune moment to be debating this subject. Far too often, emotion, instead of evidence, drives the debate about betting and gaming in this country. Nowhere is that felt more keenly than in the discussion about how problem gambling is tackled through research, education and treatment—RET.

Some 22.5 million British adults enjoy a bet every single month. According to the independent regulator, the rates of problem gambling in the UK are falling, having reduced to 0.2% now from 0.6% just 18 months ago. Although of course one problem gambler is one too many, those figures are positive compared with other European countries. The rate is 2.4% in Italy, 1.4% in Norway and 1.3% in France. One could therefore conclude that the regulated market in Britain is relatively successful in keeping rates of problem gambling fairly low.

For the past few decades, the industry has rightly shouldered the financial responsibility for that work by paying a voluntary levy to fund independent charities tackling problem gambling. Despite that, anti-gambling campaigners are demanding a new, statutory levy on the industry—a tax by another name—to fund RET. That poses one obvious question: would funds generated through a statutory levy and given to the Department of Health and Social Care really make a tangible difference to the delivery of RET and to problem gambling in the UK? The clear answer is no.

The current system is making good progress, and in any event, a blanket levy would not raise materially more money for RET than is raised at present, but it would disproportionately hammer casinos and bingo halls, where just a 1% hit on turnover equates to a 10% hit on profit. That could put many bingo halls, casinos and other land-based operators in places such as Blackpool out of business, costing thousands of jobs and the Exchequer vital revenue, as I alluded to previously.

[Paul Blomfield]

The hon. Gentleman says that the current system is making good progress, but the latest National Gambling Treatment Service statistics from GambleAware show that 49% of users have a risk level that indicates that they remain at risk at the end of their treatment. Does he think that that is good progress?

[Scott Benton]

There is clearly more work that we can do in this area, but it would help if the NHS had a long-term strategy for dealing with the issue, which it lacks at present. I will say more on that point in a few moments.

Under current arrangements, all companies regulated by the Gambling Commission are expected to make a voluntary contribution of 0.1% of turnover. To put that in context, in 2019-20 that figure was £10 million. Most of the funding goes to GambleAware, which is a totally independent charity. The industry has no say whatever on how that money is spent. In its five-year strategy published last year, the charity says that it expects to see that income increase to £39 million by the year ending 2024. As the hon. Member for Swansea East alluded to, the four largest gaming companies—Entain, William Hill, Flutter and Bet365—have agreed to increase their contributions to 1% of turnover. That is an additional £100 million over a four-year period to tackle the issue, with all of that funding going towards tackling and preventing the causes of problem gambling.

As I said in response to the intervention from the hon. Member for Sheffield Central (Paul Blomfield), the NHS still does not have a long-term strategy to tackle problem gambling. It was only in 2019 that the Department of Health announced it would open 15 new NHS clinics for addicts. Despite that, only five are open so far, with three more supposedly coming online later this year. Meanwhile, it is the industry and charities that have spent the last two decades trying to tackle the issue. Currently, charities use about 160 locations for face-to-face counselling services—part of an already mature network of clinics, treatment centres and outreach programmes that are making a real difference right now.

A statutory levy would risk charities’ existing funding models by taking cash out of their coffers and putting it into the NHS, which, sadly, is not yet set up to delivering those services.

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[Paul Blomfield (Sheffield Central) (Lab)]

It is a real delight to contribute to a debate under your chairmanship for the first time, Mr Betts. I thank my hon. Friend the Member for Swansea East (Carolyn Harris) for her comprehensive and powerful statement of the case, to which it is difficult to add anything.

I simply want to draw on the experience of my constituents, Liz and Charles Ritchie. I am delighted that Liz has been able to join us this morning. Their son, Jack, was one of the more than 400 people estimated each year to take their life due to gambling addiction, but he was never diagnosed with a gambling disorder; he was told by health professionals that he had an addictive personality that he would have to learn to live with. During the inquest into his death, the coroner described gambling warnings, information and treatment as “woefully inadequate”. The coroner’s “Prevention of future deaths” report states:

“The treatment available and received by Jack was insufficient to cure his addiction—this in part was due to a lack of training for medical professionals around…diagnosis and treatment”.

Jack took his life in 2017, but unfortunately things have not changed enough since then. As I said to the hon. Member for Blackpool South (Scott Benton), according to the latest data from GambleAware, National Gambling Treatment Service statistics show that 49% of users still have a risk level of 3+, indicating that they remain at risk when their treatment has finished. We need to acknowledge, as the gambling review does in a sense, that we need to do more and much better.

Despite the wholly unfortunate characterisation of those of us making this argument as an anti-gambling lobby, I thought the hon. Member for Blackpool South helped our argument considerably when he talked about the inadequacy of provision in the NHS. He is right; that is at the core of our argument. Treatment, public messaging and prevention of harm are not sufficient in the UK to combat the severe harm experienced by gamblers exposed to dangerous products.

The Advisory Board for Safer Gambling explained the problems with the current voluntary system: a lack of transparency, a lack of equity across operators, a record of insufficient funding, and unpredictable voluntary funding that creates barriers to distributing money where it can have the most impact, such as the NHS. We have begun to hear the arguments this morning. The Betting and Gaming Council often boasts about how its leading members volunteered to boost their joint funding of education and treatment services to £100 million during the 2019-23 period. That figure of £100 million—plucked from the air—over four years is not generous; it is a tiny proportion of the extraordinary profits those members make from other people’s difficulties. Most importantly, it does not come close to tackling the scale of the task we face.

As the hon. Member for Blackpool South pointed out, there are only five gambling treatment centres in the UK, with two further centres planned to be opened this year. That is against a background in which research published by Public Health England last September estimated that about 0.5% of the adult population—about a quarter of a million people—are likely to have some form of gambling addiction, with some 2.2 million either problem gamblers or at risk of addiction.

According to research by the University of Bristol—this is a figure that we really need to stop and think about—55,000 children under the age of 15 have a gambling addiction. Jack’s addiction started while he was at school. A statutory levy is vital to ensure we have the sufficient funds to meet the challenge presented by gambling as it operates now. The levy must be independently collected and channelled into the NHS, so that the industry does not have undue influence over its allocation; my hon. Friend the Member for Swansea East made that point powerfully.

There is a recent proposal from the Social Market Foundation to administer the levy through an independent levy board, which would allocate resource and ensure that the NHS services required are sufficiently funded. Existing organisations funded by the industry have an obvious conflict of interest and cannot fulfil that function. We are beginning to move away from the individual responsibility model and attitude to gambling problems towards a public health approach. As we do that, we need to change the Gambling Commission’s third objective, so that it has a clear responsibility to minimise gambling harm by protecting the whole population.

[John Spellar]

Will my hon. Friend reflect on the statement made by my hon. Friend the Member for Swansea East (Carolyn Harris), who argued that the black market is greatly overestimated? I caution that that is always the response of the bureaucrats who provide the figures. It was true on cigarette smuggling, red diesel fraud and self-employment fraud, as well as many other areas. There is always a tendency to underestimate what goes on in the sub-economy. Is there not a danger that this issue will also be underestimated, if we over-regulate?

[Paul Blomfield]

As I said in an intervention on my hon. Friend the Member for Swansea East, from my experience of tackling the payday lending industry on a cross-party basis, the argument that it came up with to defend its own profits was, “Be afraid of illegal loan sharks, so do nothing about us and the misery that we are causing, because there is that threat out there.” We need to tackle both. That strategy needs to be developed and funded by a statutory levy.

Let me return to Jack’s case and the conclusions that were raised at his inquest by the coroner, who insisted that, despite small changes in regulation and treatment since Jack’s death, significantly more needs to be done by the state to protect people. Crucially, Jack did not know his addiction was not his fault. Liz and Charles think that if his addiction had been recognised as a health problem and treated more effectively—if he had been given the correct information and the doctors had been better informed—he could still be alive today, and so would many others.

Medical experts agree. Dr Matt Gaskell, who leads the NHS Northern Gambling Clinic, explained to the inquest that the treatment Jack received was insufficient, and he spoke about the impact gambling has on the brain, causing major changes as addiction develops quickly. He underlined that the whole public are at risk, not just a vulnerable few, and I know that that is also the view of the Minister responsible, the Under-Secretary of State for Digital, Culture, Media and Sport, the hon. Member for Croydon South (Chris Philp), who has previously said that gambling harm could affect any of us.

Obviously, a new approach is needed—one that promotes harm prevention and information about risk, as well as treatment and provision for early diagnosis. We have the skills and knowledge in our NHS, but we need the investment to make those services available to all who might need them. The hon. Member for Blackpool South said the NHS should be doing much more, and he is right, but the big flaw in his argument is that that should not be at the cost of other NHS services. It should be based on the “polluter pays” principle: those who do the harm should cover the cost of addressing it.

On the intervention made by the hon. Member for Shipley (Philip Davies), the levy should be set at the rate necessary to cover the costs of mitigating the harm and providing the treatment. If the problem gets worse, the levy may have to go higher; if it is reduced as a consequence of effective treatment, the levy may go lower. The levy should be responsive and based on the “polluter pays” principle. However, I am conscious of the time and of the fact that you are glaring at me, Mr Betts, so I will finish on that point. I hope that the Government recognise the power of these arguments.

[Mr Clive Betts (in the Chair)]

The guideline is now that speeches should be six minutes. Can we try to stick to that, to make sure all colleagues get in?