Financial Risk Checks for Gambling

Debate between Paul Blomfield and Philip Davies

Monday 26th February 2024 Westminster Hall

[Paul Blomfield]

I thank the right hon. Member, my friend in this context, for his intervention. He has done such good work on this issue, and on this point he is absolutely right.

I have become involved in gambling reform only in the past six years or so, following the death of one of my constituents, Jack Ritchie, as a result of gambling addiction. What I learned from the tragedy of Jack’s death was that often when people take their own lives it is because they are overwhelmed not by gambling debt, but by the addiction itself. When I talked to Jack’s parents, they were very clear—this echoes a point that the right hon. Member has made—that if there had been checks, balances and preventive measures in place at an early stage of Jack’s journey into addiction, it could have transformed the tragic outcome when he took his life.

Jack is not alone. According to Public Health England, over 400 people take their lives each year as a result of gambling. A recent Gambling Commission survey, which I think has been mentioned, found that 2.5% of the population—over 1.5 million people—score over eight on the problem gambling severity index.

[Philip Davies]

The hon. Gentleman has repeated this line that over 400 people a year die of suicide as a result of gambling—a figure that has been discredited many times and with which the Gambling Commission certainly would not align itself. Can he tell us how he has arrived at that figure? What methodology has he gone through? I think that when he does explain it, he will realise that it is a discredited figure.

[Paul Blomfield]

I was happy to take an intervention, in contrast with the hon. Member’s approach earlier, but I was simply citing the figures provided by Public Health England. I respect Public Health England, as I am sure—

[Philip Davies]

Will the hon. Gentleman give way on that point?

[Paul Blomfield]

No, I will not.

[Philip Davies]

The figures have been discredited, and it does not accept them any more.

[Paul Blomfield]

I am prepared to accept the figures from an established, respectable national body.

[Philip Davies]

But it does not accept those figures any more.

[Paul Blomfield]

I do not think that this is—

High Cost Credit Bill

Debate between Paul Blomfield and Philip Davies

Friday 12th July 2013 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

I beg to move, That the Bill be now read a Second time.

[Philip Davies (Shipley) (Con)]

On a point of order, Mr Speaker. Is it in order for the person who proposes that the House sit in private neither to vote for that nor to be a Teller for that side during a vote?

--- Later in debate ---

[Paul Blomfield]

I thank Members on both sides of the House for their encouragement and advice. The supporters of the Bill, with four Labour colleagues, five Conservatives and two Liberal Democrats, almost perfectly reflect the composition of the House. The Bill has the support of many other Members, some of whom are here today and many more who cannot be here. That sends two important messages. First, regardless of how far the Bill progresses, Members’ desire to see statutory regulation of payday lending will not go away. Secondly, there is a growing consensus—not only across party, but beyond this place—on what the key components of the regulation should be.

In preparing the Bill, I have drawn on the advice of Citizens Advice, the debt charity StepChange, the Centre for Responsible Credit, Which? and local debt advisers in my constituency. I am grateful for all their support. I have consulted Members from both sides of the House who are involved in the all-party groups on debt and personal finance, on financial education and on credit unions. I hope that the Minister will agree to meet those of us who have been involved in that process as we take it forward. The Bill reflects the common ground of all those groups and offers a consensus on how we should deal in an holistic way with the problems of payday lending. It recognises the important role that the Financial Conduct Authority has to play from April 2014. It deliberately does not seek to tie its hands with over-prescriptive detail, but aims to provide a positive direction of travel to the FCA on the key issues. I hope that that direction of travel is consistent with Government thinking.

I am sure that hon. Members will wish to make many positive points and suggestions, so it is important for the Bill to progress into Committee where they can be considered in more detail. I am sure I speak for all supporters of the Bill when I say that I am open to that debate and the consideration of any amendments that are tabled. Other Members wish to contribute, so I will briefly set the context for the Bill and summarise its main proposals.

We all know that payday moneylenders are making millions from loans aimed at some of the most vulnerable. They target the poor and make them poorer, pushing them into unaffordable and spiralling debt with exorbitant charges. It is not the intention of the Bill to close down payday lenders, because, sadly, there are few alternatives for many people. However, many of the practices our constituents have experienced are truly appalling. It is those practices that the Bill seeks to stop. We seek to learn from countries where payday lenders have been longer established—in particular the United States, the land of free enterprise—and where effective regulation is the norm.

[Philip Davies]

The hon. Gentleman talks about exorbitant rates of interest. These loans tend to be of quite small amounts—a few hundred pounds—and for a very short period of time. How much does he think it is reasonable to charge in interest on a loan of £150 over two weeks?

[Paul Blomfield]

One of the points I made a moment ago was that it would be inappropriate for us to be over-prescriptive. It is right for the FCA to make evidence-based decisions on details of that sort.

[Philip Davies]

The point remains. If the hon. Gentleman believes that the amounts being charged at the moment are too high, he must have an idea in his own mind of a figure that would not be too high. I just wondered whether he could tell us how much interest on a typical £150 loan over two weeks he thinks would be sufficient to prevent him from introducing the Bill.

[Paul Blomfield]

I think that most hon. Members would recognise that the annual percentage rate—I will come on to APR later—that Wonga charges, which has just gone up to approximately 5,500%, is entirely inappropriate.

--- Later in debate ---

[Paul Blomfield]

As I said at the outset, the Bill does not seek to close down the sector, but I hope it would reduce the number of payday loans by signposting people towards debt advice, thereby opening them up to the kind of support that might lead them in other directions and prevent them from being caught in the spiral of debt. More importantly—others have made this point—by tackling roll-overs and other ways in which the industry makes unreasonable profits from unacceptable practices, the Bill will prevent those who turn to payday loans from being ripped off in the way that, frankly, they are at the moment.

[Philip Davies]

Following on from that, if the hon. Gentleman’s Bill came into law, what effect does he think it would have on the number of people who borrow from those who employ more “agricultural” means of recovering the money?

[Paul Blomfield]

That is an important point. It is one I have looked at in relation to the United States, where unregulated markets have been regulated. Where such regulation is introduced in the measured way that the Bill seeks, there is no evidence that people turn to the sort of illegal loan sharks about whom we should be very concerned.