Football Index Collapse: Lessons Learned

Ronnie Cowan Excerpts

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.

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[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I am pleased to participate in this debate. Like others who have spoken before me, I congratulate the hon. Member for Blaydon (Liz Twist) on bringing it forward. It is important that we learn lessons and remember the mistakes made during the collapse of the online gambling product, Football Index. I also pay tribute to my hon. Friend the Member for Inverclyde (Ronnie Cowan), who has done a huge amount of work on this issue and in the wider gambling context generally.

I remember well when Football Index collapsed in 2021. I remember a number of constituents contacting me in despair, some having lost significant sums of money in what they believed was an investment because it had been marketed as such. It was deliberately marketed to look like a football stock market where customers could invest in players, collect dividends based on performance and sell their shares in a player at a profit if they did well. However, when operations were suspended, customers lost more than £90 million in open bets, or in other words, investments in players.

What became clear is that Football Index was akin to a pyramid scheme, operating unsustainably until its collapse by paying customers dividends using new customers’ investments. That collapse represents the biggest collapse of a gambling product in the UK. However, relatively speaking, it has not attracted the attention that it ought to have done. We know that the Gambling Commission had been warned some 14 months prior to the collapse that the platform was an

“exceptionally dangerous pyramid scheme under the guise of a ‘football stock market’”.

Its business model was fundamentally flawed and spiralled out of control.

As we have heard, the issue is that many of those using the platform were not fully cognisant of the fact that they were gambling, participating in a pyramid scheme dressed up as something quite different. If somebody does not know that they are gambling, they surely cannot be fully aware of the risk to which their money is exposed. The reality is that Football Index’s deliberate imitation of an investment product led to

“unparalleled levels of irresponsible gambling”

from thousands of users who were misled into believing that they were not gambling but investing, and obviously had no idea of the risks to which they were exposed. There is unanimous agreement in the Chamber today, and I am sure that the Minister will be listening to that carefully.

All the information was contained in a report to the Gambling Commission, which did nothing and rejected the warnings, as it did not consider that there was enough evidence to show that the undertaking was fraudulent. It then transpired that the Gambling Commission was not properly notified of the nature of the product in its licence application, nor was the regulator informed of changes to the product after its launch as required. There has clearly been an absence of scrutiny and, one might say, of curiosity in some quarters, given the concerns raised about the platform. Football Index was never regulated by the Financial Conduct Authority, but areas for improvement for that body have been identified, including the speed of response to requests from the Gambling Commission and consistency of messaging on regulatory responsibilities.

For the constituents who contacted me about the issue—I am sure that it is the same for other Members’ constituents—the financial losses have been significant. For some, they have been life-changing, and have put strains on family relationships and future plans. Still there has been no redress for those who were told they were participating in an investment instead of a gambling opportunity. Indeed, the only hint on Football Index’s website that it was a betting site was an easy-to-miss strapline, which was added several years into its existence, and only at the insistence of the Advertising Standards Authority.

This situation happened because of spectacular failures in regulation, which allowed a gambling product to masquerade as a financial service or investment platform, without the regulation that that would suggest. Those who were fooled by Football Index—and they were fooled—should not pay the price of this failure of regulation. That only adds insult to serious injury. I know that the Minister will say that gambling losses cannot be made good by taxpayers’ money, but I draw his and other Members’ attention to the words of David Hammel, who is one of the spokespeople for the Football Index action group. He said:

“The regulators don’t actually cost the taxpayer any money, they are funded by licence fees and they also contribute to the Treasury by way of fines and settlements. There is a net surplus since…Football Index was first licensed in 2015, it’s approaching £1.3bn or £1.4bn that’s gone into the public purse.”

Football Index action group wants a mere 10% of that sum to be reassigned for use as redress. That would not directly involve taxpayers’ money.

[Ronnie Cowan]

I have one of those numbers going around in my head. It is said that £90 million was lost. Well, it was not lost. It is there somewhere. Someone has that money in a bank account somewhere; it did not just disappear into the ether. We are trying to find redress for people who have lost tens of thousands of pounds. If we identify that money, surely there is a way. Even if it is in a bank account in Jersey, there has to be a way of paying redress to the people who lost it in the first place.

[Patricia Gibson]

I thank my hon. Friend for that point, but I also urge the Minister to look carefully at the suggestion of David Hammel from the Football Index action group. I agree with Mr Hammel, and I want the Minister to consider his proposal for how redress can be managed for the victims of this scandal.

It almost goes without saying, but I will say it anyway, that such a fundamental regulatory failure must not happen again, yet Members have raised concerns about the co-founder of Football Index being involved in a new trading platform, KiX, that has striking—chilling, even—similarities to the one under discussion. I hope that the Minister will use his role to ensure that regulators keep a close watch on that new product. We must ensure that the same mistakes are not repeated, and that it is clear to all users whether a site is a gambling site or an investment site. There should never be any dubiety that the customer has to work through; it should be clear and front-facing.

I am sure the Minister will agree that this must not happen again. I ask him to think carefully about the suggestion from Mr Hammel about how we can recompense users of Football Index without directly using taxpayers’ money.

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[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the hon. Member for Blaydon (Liz Twist) for tabling this debate. I know she also secured a debate in 2022 on the impacts of the Football Index collapse. I would like to acknowledge the contribution she has made to ensuring that these events receive the attention that they deserve. She is an admirable representative of those in her constituency and others who have been affected. The Government appreciate, and I certainly do, the impact these events have had on them and many others. I personally offer my sympathies to all of those affected financially by the collapse of Football Index.

I thank all hon. Members for their contributions today. I also want to say thank you to David Hammel for his campaigning work on behalf of people who have lost money as a result of these events. I have met Mr Hammel and know that he has engaged administrators, regulators and politicians on behalf of those affected.

Today’s debate has been valuable and I commend all those who have contributed for their thoughtful comments. It has been important for me personally to hear the perspective shared this afternoon on this important topic. I want to be clear that I and the Government recognise the serious consequences that the collapse of Football Index has had on consumers. As I said, I sympathise with all those affected. It is important that we ensure that a similar scenario cannot happen again.

I will not repeat the background to these events, as that has been well covered by colleagues. I want to focus on the action being taken following the independent review of the regulation of Football Index, led by Malcolm Sheehan KC. I thank him for that work. His report examined the regulatory circumstances around the granting of a licence to BetIndex, its subsequent suspension and the company’s ultimate financial failure. Importantly, it identified areas, as others have said, where the Gambling Commission could have been more effective in responding to the challenges posed by this novel product. It also highlighted where the FCA could have co-operated more effectively with the commission.

The report recommended that the Gambling Commission should enhance its scrutiny of novel products; such products are less likely to fit neatly into existing regulatory frameworks, and there is greater risk that they are poorly understood by customers, as colleagues have mentioned. It recommended closer examination of the language typically associated with investments and financial markets, which can obscure the fact that a product is a gambling rather than a financial product. It outlined the need for more prompt decision making, quicker internal escalation and greater scrutiny of any differences between described and actual features of products. Finally, the report recommended that the commission consider whether operators should be required to demonstrate additional levels of liquidity in the case of longer-term tradeable bets like those offered by Football Index.

Although Football Index was never regulated by the Financial Conduct Authority, Mr Sheehan’s report recommended that the FCA should also seek to achieve quicker and more consistent decision making on regulatory responsibility issues. The report concluded that the FCA could have been faster to come to decisions in the Football Index case and to communicate those to the Gambling Commission.

The Gambling Commission and the FCA agreed a formal memorandum of understanding in June 2021. The Sheehan report described that as an appropriate and proactive step. However, it also made recommendations about how the memorandum could be strengthened. It recommended that the new memorandum should include an agreed mechanism for resolving disputes over regulatory responsibility; mechanisms for ensuring that disputes are identified, discussed and escalated where necessary; and provisions for the written recording of meeting outcomes.

It is vital, as the title of the debate points out, that we learn lessons from the Football Index case to ensure that a similar situation does not take place again. I am pleased that all the recommendations of the report for the commission and the FCA have been implemented in full.

The Gambling Commission has taken various actions to achieve that. It consulted on and updated its statement of principles for licensing and regulation in June 2022. It has updated how it assesses risk so that novel products are properly considered. It now undertakes systematic reviews of novel products offered by existing licensees. It has also increased the resources available to ensure that licensees disclose notifiable changes to products. The commission has also changed its approach to licensing products where long-term bets might appear more like financial products. It has made it clear in its statement of principles that it will not normally grant a licence to products that use language usually associated with investments or financial products.

Various colleagues raised issues around advertising, and the hon. Member for Worsley and Eccles South (Barbara Keeley) asked about the gambling White Paper. We are not introducing one single Bill because we want to ensure that we get as many of the changes done as quickly as possible. We are making good progress. I have consistently committed to trying to get everything done by the summer. Some of these things will be ready for statutory instruments soon, but some are what the Gambling Commission will implement. By splitting it up, rather than having one big Bill that might take a long time to get through this place, we are proceeding at pace to bring about the reforms.

The FCA has also implemented all the recommendations from the report. Importantly, it has taken steps to improve the speed and consistency of its decision making, including nominating an executive director to oversee the relationship with the Gambling Commission.

An updated memorandum of understanding addressing all the review’s recommendations was agreed between the commission and the FCA in November 2022. The agreement has established a process and timeline for co-operation between the two authorities and a process for escalation, and created a relationship owner and primary contact in each authority to oversee the operation of the memorandum. It also requires a quarterly minuted meeting between the two authorities to ensure that the memorandum operates as it should. The most recent meeting took place yesterday.

There are also now ad hoc meetings between the chief executive officers of the two authorities, which provide an avenue for escalation of regulatory matters if required. I am grateful to the Gambling Commission and the FCA for their work to ensure that this important report is acted on.

I mentioned David Hammel, and I admire the work of campaign groups such as the Football Index action group and the way that it has conducted itself. I met him last year and we have had follow-up correspondence. I am taking seriously the extra evidence that Mr Hammel has submitted in relation to the Sheehan review, and I am considering, as the hon. Member for Blaydon mentioned, whether it would be appropriate and feasible for Mr Hammel’s evidence to be scrutinised by someone external to the Department.

A lot of Members mentioned the new product, KiX, which has described itself as a football cryptocurrency trading project and bears similarities to Football Index. It involves trading footballers in the form of so-called “Digital Athlete Tokens”, which are purchased with cryptocurrency. The tokens pay out a yield based on the performance of footballers. It appears that the product is in a test phase and is not currently live, nor does it appear possible to deposit currency.

The Gambling Commission is taking proactive steps in relation to KiX. It has written to the hon. Members for Blaydon, for Swansea East (Carolyn Harris) and for Brentford and Isleworth (Ruth Cadbury) to outline its approach, and it has written to my Department. The commission is currently reviewing a number of elements of the KiX product. That includes a review by its compliance and legal teams to consider whether, if launched, it would meet the definition of gambling under the Gambling Act 2005. It has also written to the individuals responsible for KiX for further information on the product and their intentions, and to highlight the consequences of launching a product that meets the definition of gambling in Great Britain without an appropriate licence.

[Ronnie Cowan]

Is the Minister saying that the Gambling Commission alone will decide whether KiX is given a licence to bring its products to the marketplace? I have a meeting with the Gambling Commission at 4.30 this afternoon and I would like to ask it that question, too.

[Stuart Andrew]

The hon. Gentleman interrupted me just before I was going to say that the commission and the FCA are already engaging to establish the details of the product and to agree the appropriate steps.

There have been reports that two individuals previously involved in running Football Index are involved in KiX. Adam Cole was the co-founder of Football Index. He surrendered his personal management licence in September 2021 while under review, and the commission reached findings of fact regarding his involvement in Football Index. Those would be considered if he were to make a new application for a personal licence.

The commission also wrote to Abdullah Suleyman, the former head of trading at Football Index, to confirm the nature of his involvement in KiX. Following the letter, he surrendered his personal management licence on Monday 22 April.

Sport: Gambling Advertising

Ronnie Cowan Excerpts

Wednesday 13th March 2024 Westminster Hall

[Ronnie Cowan (Inverclyde) (SNP)]

I beg to move,

That this House has considered gambling advertising in sport.

A couple of weeks ago in this Chamber, we debated affordability checks in gambling, and the Government Benches were rammed with those who seemed to have racecourses in their constituencies. They did not understand that affordability checks did not apply on course. I am not sure where they are today—did someone say Cheltenham?

I do not claim to be an expert on how advertising and marketing work. Like most people, I am exposed to adverts on TV, billboards and the internet. I wonder, does associating a puppy dog with a certain brand of toilet paper make me more likely to buy that brand? Do pictures of a car racing through stunning mountain scenery or unusually empty city centre streets increase the chances of me buying that particular car? Do adverts offering me free bets or extra spins make it more likely that I will gamble?

I—like most people, I presume—believe that I am impervious to such obvious and sometimes clumsy attempts at selling, and then I take a step back and see that I am also guilty of this. That is particularly obvious during an election year. I am trying to get re-elected, and I promote myself and the brand I represent through advertising. I consider how best to get that combination over to my constituents and, like most politicians, I use the tried and tested methods of leaflets, door knocking, newsletters, hustings, radio, TV and social media. I tell people, “Vote Cowan. Vote SNP.”

My experience tells me that this has worked three times before, and that I have therefore done something right. The gambling industry is simply doing the same thing, but its income is vast. It spends huge sums of money—£1.5 billion a year—to achieve a far greater reach than any parliamentarian can, and we are all exposed to it. If I see a letterbox that says “no leaflets”, I do not post one. Unfortunately, the gambling industry is less selective, and by placing adverts in and around sporting arenas and putting them on the players and around the pitch, it removes the opportunity for fans to decline the offer of being advertised to.

Despite the Advertising Standards Authority and the Committee of Advertising Practice, the gambling industry continues to stretch the rules, with 3,500 gambling logos visible during a single English premier league game, in plain sight for anyone to see. Only 7% of those were on the front of shirts, so the impending change to adverts on the front of shirts means nothing, and the gambling industry knows it. It was proposed that family areas free of gambling adverts could be established in football grounds, but one year on, nothing has changed. When it comes to advertising to children, bet365, Ladbrokes, MrQ, and Lights Camera Bingo all broke the rules.

In short, if the gambling industry—any industry—did not think that spending huge amounts of money was not generating more in returns, it simply would not do it. Self-regulation is not sufficient for any industry ever-hungry for more. Advertising increases the gambling industry revenue. Advertising normalises gambling. According to the ASA, that was a predicted consequence of the Gambling Act 2005. Advertising increases the reach and therefore the number of people who are gambling.

The hypocrisy is that while gambling benefits from the sports, most sports do not actually benefit from gambling. The gambling industry is a parasite living off the lifeblood of the sports that it uses. It makes gambling the most important factor and the sport a poor second. The game is not the same without a bet—that is the message.

That is a great shame. I remember great moments in sport with joy: Daley Thompson’s decathlon golds in 1980 and 1984; Ian Botham’s 149 against Australia at Headingley; Ovett, Coe and Cram racing against the clock and one another; Torvill and Dean at Sarajevo in 1984; and Andy Murray winning Wimbledon twice. There was not an advert in sight. And George Best just being George Best—I did not need a bet on these things to enjoy them. The sport must be the priority and gambling advertising must be curtailed. I would say that, just like tobacco, it should be completely removed from the world of sport.

Of course, this issue goes beyond that. The UK Government have said that there was “good evidence” that advertising had a “disproportionate impact” on people who already had problems with their gambling. In addition, some forms of online advertising had a strong appeal to those under 18. According to an Ipsos MORI report, more than four out of five of those aged 11 to 24 reported seeing gambling advertising on TV, and that includes the national lottery. Two thirds reported seeing gambling promotions on their social media channels.

In September 2023, a Bristol University report told us that 92% of content marketing ads sent by major gambling brands were not clearly identifiable as advertising, which breaches a key advertising regulation, and that less than a quarter of them featured age warnings. There was at least one gambling advert during any commercial break on talkSPORT radio and there were 600 gambling messages during two hours of Sky Sports News. In addition, 1,902 gambling ads on social media generated a total of 34 million impressions.

One of the lead researchers, Raffaello Rossi, said that the report showed that

“gambling marketing during Premier League weekends is inescapable”,

and that fans were

“bombarded with gambling marketing through various channels, making it a normal part of football consumption.”

He claimed that self-regulation of the gambling industry was “completely failing”.

Meanwhile, the Gambling Commission will review incentives, continue to monitor practices and work to strengthen consent for direct marketing. But in the here and now, 80,000 UK children are addicted to gambling or at risk, up to 1.4 million adults in the UK are harmed directly and 20% of the population is harmed directly or indirectly. There are between 117 and 496 gambling suicides in England every year.

The time to review and monitor has passed. We need to understand the nature of addiction and see it as a health issue. We need to slow down gambling, build in cooling-off periods and give people space and time to consider their actions and the outcomes. Advertising does the opposite of those things; it pushes, cajoles and encourages.

Finally, we need to respect the fact that some people might be triggered by adverts. We need to protect our children. Nobody is asking anyone to make some sacrifice for this; we are not asking the Government to dip into their pocket. We can ban gambling advertising and we should do that now.

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[Stuart Andrew]

We have had this discussion before. One of the reasons that our White Paper has landed as well as it could do in a challenging policy area is that it has been developed through use of the very best evidence. I will come on to that point later, because I think there is further work to be done in this field.

The industry’s whistle-to-whistle ban has cut the number of pre-9 pm betting adverts to around a quarter of their previous level, as the hon. Member for Barnsley East (Stephanie Peacock) mentioned, and further cut the average number of sports betting adverts seen by children to just 0.3 per week. None the less, we also know that gambling sponsorship is one of the main ways children are exposed to gambling, and that gambling marketing can have a disproportionate impact on those already experiencing gambling harm. That is why the advertising rules have been strengthened since October 2022. Content that has a strong appeal for children, such as that involving top-flight footballers, and that creates a sense of urgency to gamble is banned from appearing in gambling adverts. This measure further protects children and vulnerable adults.

Following on from the gambling White Paper, we are in the process of implementing a comprehensive suite of protections, ranging from action on advertising, products and the way that gambling is provided to prevent gambling-related harms. In line with existing gambling advertising rules, as has already been mentioned, the Premier League’s decision to ban front-of-shirt sponsorship by gambling firms will commence by the end of the 2025-26 season.

I can also confirm that a cross-sport code of conduct for gambling sponsorship has been agreed by a number of the country’s major sports governing bodies, from the Premier League and the English Football League to the British Horseracing Authority, the England and Wales Cricket Board and others. Indeed, the Rugby Football League sought to build in the code’s provisions as part of its renewed agreement with Betfred. This landmark code fulfils a key commitment from the White Paper ahead of schedule, and will bind all domestic sports governing bodies to four core principles. First, all sports will ensure socially responsible promotion. Education and awareness will form a key part of all sports’ marketing activities, including in stadiums.

[Ronnie Cowan]

The Minister has just acknowledged the need to build education support. Will he acknowledge the fact of the potential damage that has been done by this product in the first place? The gambling industry cannot have it both ways; these companies are causing the damage and at the same time painting themselves as the good guys because they are helping to support people out of addiction. They cannot own both organisations.

[Stuart Andrew]

As I said, I will come on to further research that I feel we need to do, but I want also to emphasise that we are trying to do a considerable amount of work here as part of the wider White Paper reforms. In essence, we are trying to deal with 15 years of digital progress, which is quite significant.

At this point, I want to pay tribute to all the team over at the Department for Culture, Media and Sport. They are working extremely hard to meet the commitment we made to get the majority of the code done by the summer of this year, recognising that its implementation will have the greatest impact on tackling gambling harm.

The second core principle is the protection of children and vulnerable people. Sponsorship has to be designed to limit reach to children and those at risk of gambling harm, and this will see adult replica kits, as was mentioned, available without the front-of-shirt gambling logo.

The third principle is one of reinvestment into sport. The commercial income raised from gambling sponsorship will provide grassroots services that genuinely serve fans and communities.

Finally, the code will ensure that gambling sponsorship maintains sport integrity. Sponsorship arrangements will build in appropriate requirements that they do not compromise the integrity of sporting competitions nor harm the welfare of participants. Together, those principles will establish a robust minimum standard for gambling sports sponsorship across all sports.

Of course, commercial arrangements and fan-bases differ across the industry, and that is why individual sports governing bodies will also introduce bespoke arrangements to fulfil these principles in a way that is tailored to maximise their impact. Some sports, including football, intend to have their arrangements in place as early as this year ahead of the next season. Ultimately, this will guarantee that, where gambling sponsorship does appear, it is done in a responsible way and that fans, especially children, are better protected.

There is no single intervention that effectively prevents gambling-related harm, and that is why we have taken an evidence-led approach to implement a package of reforms targeted at different levels, including advertising. We absolutely recognise that advertising can have a disproportionate impact on those experiencing gambling harms. Technological advances and developments and the increasing dominance of online gambling have necessitated a doubling of efforts from us as a Government. We and the Gambling Commission are now taking targeted action to ban harmful practices and to ensure that advertising remains socially responsible wherever it appears.

The commission has recently consulted on strengthened protections to ensure that free bets and bonuses are constructed in a way that does not encourage excessive or harmful gambling, and that is in conjunction with new rules to give consumers more control over the direct gambling marketing they wish to receive. Together, the measures will empower customers and prohibit harmful marketing practices to further prevent the risk of gambling harms. The commission will set out its response to the consultation in due course.

Our holistic approach also includes action on the products themselves. We recently announced the introduction of stake limits in online slot games, as was mentioned, where we have seen evidence of elevated levels of harmful gambling. But we are also pursuing broader protections, such as financial risk checks and further strengthening restrictions on game design. I am clear that effective and innovative collaboration to get the right mix of interventions for the population as a whole and those with specific needs is required to tackle this issue.

Evidence has been a key theme in this debate, and I want to end in recognising that further work is needed in this area. A concerted effort to build the evidence base to ensure policy and regulation are able to deal with the emerging issues is paramount, and the Gambling Commission’s important work on the gambling survey for Great Britain aligns with this priority. The survey will in time provide us with a better picture of gambling behaviour and the nature of gambling-related harm.

However, developing quality evidence is also a key priority for the Government’s statutory levy. Increased and ring-fenced funding will be directed towards high-quality, independent research into gambling and gambling-related harms, including on advertising. As my right hon. Friend the Secretary of State made clear at the launch of the White Paper, if new evidence suggests that we need to go further, we will look at this again.

I again thank the hon. Member for Inverclyde for securing this important debate and all the Members who made valuable contributions. I am committed to tackling gambling-related harms and I am confident that the action we are taking will have a real impact in reducing those harms across the country. The new levy will provide us with even more evidence. As I have already committed, if further action is needed we will look at it again.

[Ronnie Cowan]

I thank everybody who has taken the time and effort to be here today and spoken so well, and I thank the Minister for being here. I understand the hard work that staff are putting into resolving the gambling issues that we have. We all have constituents that are damaged and families that have been torn apart. I am sure that in some cases individuals have committed suicide because of their gambling addiction. It is not always obvious because gambling addiction tends to be a hidden addiction.

I did the Big Step and Gambling with Lives walk—I have done it a number of times. The last time one of the guys came up to me during the walk and said, “If I was an alcoholic and my local landlord came to my door at night and said, ‘Have a case of beer, have a bottle of whisky, have a bottle of gin’, people would think that behaviour reprehensible. I am a recovering gambling addict and people still send me adverts saying, “Do you want a free bet? Do you want five bets on this?” It is exactly the same thing.

I thank all the organisations and individuals that have helped me gain a better understanding of the situation, none more so than Martin Paterson. As a recovering gambling addict, he sent me a message today. He said,

“Can I add, as a person in recovery like millions of others over the years the ads are triggering so many back into the hole of gambling addiction.”

Martin, stay strong. We will keep up the fight.

Question put and agreed to.

Resolved,

That this House has considered gambling advertising in sport.

Financial Risk Checks for Gambling

Ronnie Cowan Excerpts

Monday 26th February 2024 Westminster Hall

[Philip Davies]

Thanks.

Thankfully, readers of the Racing Post and punters still believe in the timeless Conservative principle of individual responsibility. In a recent poll of punters carried out by the Racing Post, when asked who they thought was best placed to assess whether their betting is affordable, 96.6% said that they were, 1.8% said the Gambling Commission, 1% said bookmakers and 0.6% said the Government. If that is not a giant raspberry to the proposed affordability checks, I do not know what is.

Everyone knows that the problem gambling rates in the UK are extremely low, and certainly do not justify anything remotely close to what is being proposed. However, it is also pretty obvious to most people with common sense that the affordability checks are likely to make things worse for people with a gambling addiction, rather than better. Does anyone seriously think that anyone who has a serious gambling addiction, if and when they are told by online bookmakers that they are no longer allowed to bet with them, will just stop betting completely? It is pretty obvious that those people will do all they can to carry on with their addiction, and that will mean going to the black market where there are no controls on people’s behaviour.

[Ronnie Cowan (Inverclyde) (SNP)]

Will the hon. Gentleman give way?

[Philip Davies]

The hon. Gentleman will have the opportunity to have his say later, and I am anxious about Sir Edward’s strictures.

The Gambling Commission has always said that the threat from the black market is overstated, while at the same time, like most quangos, telling the Government that it needs more money to tackle it. I hope the Minister will make it clear that he does not underestimate the threat from the black market. Only today, the front page of the Racing Post shows the results of a special investigation into The Post Bookmakers—an unregulated firm with 1,300 customers—which said it was expecting a ridiculously busy Cheltenham and recommended that a customer deposited as much as they could. How on earth can making it more likely for people to go to firms like that possibly help to tackle problem gambling?

The wonderful sport of horseracing derives much of its income from the gambling industry, so the more people go to the black market, the less money there is for the sport of horseracing. British racing is the best and most prestigious in the world. It is the second biggest spectator sport in the UK after football, brings a huge amount of foreign investment into the country and is a huge part of the rural economy. It also provides a huge amount of pleasure to millions of people across the country. The Government cannot possibly allow themselves to introduce measures—however well meaning —that will have a devastating effect on this great sport.

Some 24,000 racehorse owners in the UK invest more than £500 million into the rural economy. They pay £32 million a month in training fees, employing over 350 racehorse trainers who employ some 80,000 people. The least they should be allowed is to have a bet on their own horses as well. We cannot allow decisions to be made that put that investment at risk.

However much I would like the Government and the Gambling Commission to abandon the affordability check policy, I have not been here so long without accepting that some battles are impossible to win. I therefore accept that the Government may feel that they have invested too much in the affordability check debate to be able to abandon it completely. I have suggestions for the Minister that might help make the policy less bad, and I hope he will consider them.

The Government have said that they want financial checks to be frictionless, but as envisaged the checks would be anything but. First of all, will the Minister pledge to ensure that any checks will be based on net deposits, not gross deposits? That would make a material difference. Secondly, it is envisaged that enhanced affordability checks will be based on current account turnover, or CATO, data. That is used primarily by loan industries to determine whether a customer can afford a loan. It focuses on money flowing in and money flowing out of an individual’s account. That is precisely the wrong kind of test, as it second-guesses in a subjective manner what someone can afford.

CATO does not consider financial vulnerability and is extremely unhelpful when it comes to people with irregular money flows such as the self-employed, entrepreneurs and individuals with high wealth but low income. Will the Minister pledge not to use CATO data for those reasons? If he insists on going ahead with affordability checks, will he use SCOR data instead, from the Steering Committee on Reciprocity? SCOR data is much more appropriate as it shows if someone is showing signs of financial vulnerability and distress. It flags people who are falling behind on the rent or those with missed mortgage payments, defaults on loans and so on. Crucially, the checks are entirely frictionless and do not discriminate against any group, such as the self-employed.

When the Government envisaged affordability checks, surely that is what they had in mind—checking that people were not resorting to gambling to try to win the mortgage payment that they had fallen behind on, rather than trying to second-guess what each individual could afford to spend on gambling. I look forward to the Minister’s response to that suggestion. Will he also make clear where anti-money laundering checks will fit in with the affordability check regime?

If the Government insist on affordability checks, I have another suggestion: to differentiate between games of skill and games of chance—that is, to separate sports betting from online slots and roulette. Horseracing is not a game of chance and in my view should not be treated as such. Incredibly, as my hon. Friend the Member for Windsor (Adam Afriyie) made clear, the Government envisage that some games of chance will be treated more favourably than games of skill. I do not think that the national lottery will be subject to affordability checks—it cannot possibly be right that people who bet on horseracing will but people who bet on the lottery will not. Will the Minister confirm that that will not be the case or give an explanation of why it will?

Not including the national lottery in such measures would indicate a disregard for the people losing money and an interest only in the people winning money. If the concern is about problem gamblers, why is it okay if they have lost all their money to the lottery, just because that money goes to good causes rather than bookmakers? The national lottery must be included in all the measures in the White Paper.

I end, Sir Edward, where I began: by urging the Minister to look after the interests of all punters to ensure that nothing is done to threaten the horseracing industry, which will never forgive the Government otherwise, and to stand up for the key Conservative principle of individual freedom and individual responsibility. It is not too late to snatch victory from the jaws of defeat.

--- Later in debate ---

[Mr Laurence Robertson (Tewkesbury) (Con)]

It is a pleasure to serve under your chairmanship, Sir Edward. I refer hon. Members to my entry in the Register of Members’ Financial Interests; I am also proud to be the Member of Parliament for Cheltenham racecourse and—with the hon. Member for St Helens North (Conor McGinn)—the co-chair of the all-party parliamentary group on racing and bloodstock.

I am afraid that I will have to disappoint the hon. Member for Sheffield Central (Paul Blomfield), because I am going to speak mainly about horseracing. I think the most recent estimate is that Cheltenham racecourse brings in £278 million to the local economy in just four days. Those four days are coming up very soon, so I would be neglecting my duties if I did not speak from a horseracing point of view.

May I thank the Minister for being always available for a meeting to discuss the issue, and always willing to come to these debates? I do not think he particularly enjoys them any more, but he always turns up and listens. I thank him for everything he is doing. I recognise that this issue was dropped on him by previous Ministers; for that, he has my deepest sympathy.

I want to point out the relationship between betting and horseracing, which is not always obvious. The figure varies, but something like 40% of racing’s income comes from betting companies through the levy, media rights and sponsorship. I also want to explode the myth that horseracing is a rich sport; it is referred to as the sport of kings, and several monarchs have indeed taken a deep interest, but it is very poorly funded. If we look at the top 1%, there may be a lot of money there, but if we look at the whole pyramid, we find that it is not well funded at all. Racehorse owners—I am not one of them—are the unsung heroes of racing. They lose so much money that I am surprised that they continue at all, but they do.

Let me cite some figures from yesterday’s racing. At Hereford, the average prize money was £4,342. Not many miles away, at Naas in Ireland, the average was £12,479. Two races in France yesterday averaged £27,000. Hong Kong was almost off the scale: the average was £154,620. We can see from that how very poorly horseracing is funded in this country. That has a knock-on effect on stable staff, jockeys and trainers, who are all far from rich—quite the reverse, believe me. Although British racing is the best in the world, it is probably almost the most poorly funded.

Racing cannot take any more financial setbacks. Racing and betting have come together on this issue like never before, because they know that they face the greatest ever threat to their existence. I am not exaggerating when I say that. Imagine the UK without the Grand National, the Derby, Royal Ascot or the Cheltenham Gold Cup: they are magnificent, iconic races and the UK would not be the same without them. I have to say that the changes to the levy that are being discussed would not compensate for the losses that racing could face as a result of the affordability checks. Quite the reverse: to use an old political phrase, it would be a double whammy.

[Ronnie Cowan]

The hon. Gentleman is talking about industry funding, but what about the boat race, Wimbledon or—I have to mention it—the Calcutta Cup? None of them is funded by the gambling industry, yet they survive.

[Mr Robertson]

They are very different. Someone with more experience may correct me, but I think I am right in saying that across the world, horseracing is funded by gambling companies. I am not fully aware of how other sports are funded, so I will have to ask the hon. Gentleman to excuse me in that respect. I have always been in favour of racing expanding its income stream and getting more sponsorship. It does a lot of work on that, and I would be happy to see it going down that path, but it is nowhere near it yet—not by any means.

There is also the philosophical aspect to this, as we have heard. A Conservative Government should not be telling people how much money they should spend. I am keen to recognise that we need to help problem gamblers, but we should be targeting people who may be liable to become addicted to gambling, rather than people who spend too much on gambling. If we try to stop people who spend too much on gambling, we enter the philosophy of it. What about people who spend too much on alcohol? What about people who get addicted to shopping? It was said earlier that we do not see the health service dealing with those people, but perhaps it should, rather than just focusing on one aspect of society —in other words, gambling. Perhaps that is a criticism of the health service, because that is not something to be proud of. We should be looking at people who have other addictions. People with addictions often have other problems as well, and I speak with some knowledge on the matter. Saying, “You can spend £100 a month, but not £200 a month” does not help people with addictions. We should be creating systems that help those who are in real danger.

I am not going to speak for very long, and I will respect your 10-minute guidance, Sir Edward. I suggest that we should halt this process. My hon. Friend the Member for Shipley (Philip Davies) suggested that the Government have invested too much capital in it. Well, they have not invested as much capital as they did in High Speed 2, and they managed to pull that—eventually, but quite rightly. I suggest that we should take a step back, because we risk destroying not only the betting industry, but, far more importantly from my point of view, the second most popular sport in the United Kingdom.

--- Later in debate ---

[Mr Robertson]

My hon. Friend tempts me to go down a road that I am not quite sure I want to go down. The SNP is capable of speaking for itself.

[Ronnie Cowan]

I was not saying that it should be stopped; I was saying that there has to be equitable funding for all other sports. It cannot focus just on horseracing as the only one to benefit. There are other sports enjoyed throughout the United Kingdom.

[Mr Robertson]

Okay. I think I answered that earlier.

Look, we all want to protect vulnerable people. The analogy I always use is that a pub makes its money from selling alcoholic drinks to people, but it does not want alcoholics or people who are drunk in there. It wants people who enjoy a drink without causing any problems to themselves or anybody else. The proposals are deeply unpopular in the racing and betting industries, and many colleagues in my party and other parties are concerned about them. We are not saying, “Let’s not take measures to help vulnerable people.” Of course we should, but this is not the way to do it.

I ask the Minister to have a word with the Gambling Commission and put a halt to the pressure it appears to be putting on companies, which are already taking steps, and we are already seeing the loss of income to horseracing. The Minister should say, “Hold it for a minute”—or perhaps, “Hold your horses”—“and let’s have a rethink.” Let us get interested parties around the table—I think that suggestion was made earlier. Let us not rush this; let us think about how we do it properly. As I say, the Minister is not to blame; he has had this dumped on him, but I ask him to please go back to the people who are pressing this policy, wherever in the Conservative party they are, and say, “This is a dangerous policy. It will not work. There is a lot of opposition within our own party to it.” Let us get people who know what they are talking about around a table, talk about it and see what progress we can make working together.

--- Later in debate ---

[Ronnie Cowan (Inverclyde) (SNP)]

I thank the hon. Member for Neath (Christina Rees) for leading this debate. Let me say briefly to the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) that if horseracing were even partially responsible for fomenting an uprising against the UK Government, I would be leading the charge—but it is not. It is a terrific sport, which people gamble on and enjoy. This petition is a tiny bit about horseracing and a lot about the black market and affordability checks, but we have spent nearly two and a half hours talking about the horseracing industry.

Before anyone puts me down, I am delighted that so many MPs here today have recognised the fact that online gambling and online casinos are a dangerous thing and that we have to be on top of that to help people away from the course of addiction. I have not seen many of those Members sitting in front of grieving parents whose child has been driven to complete suicide. I have, however, seen them on the racecourses. I have seen them back up their racecourses. It is understandable: if I had a racecourse in my constituency, I would think that it was a hugely important part of my constituency that generated money and had an important supply chain around it.

[Conor McGinn]

Will the hon. Gentleman give way?

[Ronnie Cowan]

Not right now.

It is hugely important. If we look at the sort of money that the gambling industry feeds into the industry—

[Conor McGinn]

On a point of order, Sir George. The hon. Gentleman has asserted that Members who spoke in favour of racing or who have racecourses in their constituency have never sat in front of grieving parents, do not know anything about addiction and have never comforted those affected by addiction. The hon. Gentleman knows nothing about me, and he knows nothing about many other colleagues who have spoken. I ask him to be very careful about how he approaches what he says, and to have sensitivity before making assertions about any Member here or their motivations, their families or their experience of addiction.

[Sir George Howarth (in the Chair)]

That is not a point of order, but the hon. Gentleman has managed to get it off his chest.

[Ronnie Cowan]

I absolutely take on board what the hon. Gentleman says. I apologise if I worded that wrongly; I was talking about the sessions that we had at the APPG for gambling-related harm. I appreciate that, as was pointed out earlier, many people have been touched by the curse of gambling addiction.

The point is that it is understandable that so many people have raced to sign e-petition 649894, which calls on the UK Government not to implement the proposed financial risk checks for online gambling. The gambling industry has led and paid for this lobbying and has been hellbent on spreading disinformation that is designed to create uncertainty and raise concerns among people who enjoy the occasional gamble. I understand the punters’ point of view. They feel the fear behind this, because it is a message that they have been fed.

The truth about affordability checks is more complicated, however. I am not a prohibitionist. How many times have I had to say that? I am not trying to ban gambling, but I do want to create a safe environment for it. It may come as a surprise that affordability checks were not the invention of the APPG for gambling-related harm. This is not some mendacious ploy that the group is using; the idea was mooted in 2019 by Tom Watson, when I believe he was still the MP for West Bromwich East. Industry leader Richard Flint, who was at Sky Bet, supported Mr Watson by saying that too many people were losing money that they could not afford online. We need to work together with the industry and the Government to limit that harm.

I think that limits on spend, rather than on stakes, are the right way to go, and those limits should be based on affordability. Richard Flint acknowledged that such limits could lead to a drop in operator revenue. He clarified:

“There will be some online firms in the short term that…make less money as a consequence”.

Getting straight to the point, he added:

“but then…that spend shouldn’t happen anyway.”

That is a point that the Jockey Club should have considered when its chief executive officer launched this petition. It has cited a potential loss of £5 million on the horseracing betting levy, which according to its own board’s annual report was worth £100 million. But what price a life? What price the number of people who have been driven to complete suicide?

I return to the need for affordability checks. A year later, at the 2020 Lords Committee, the UK’s biggest operators—the chief executive officers of the big five—spoke enthusiastically about the need for affordability checks as a key mechanism to reduce harm. An industry CEO said that

“the way to go is affordability and to ensure that, when people come to our sites, they can only afford to lose or bet an amount that, quite frankly, they can afford and were comfortable with.”

So what is new? What is new is that, since the White Paper, the Government and the Gambling Commission have proposed threshold figures for the checks. Affordability is no longer an abstract concept; it is tied to precise thresholds.

The industry does not like the fact that the White Paper has called its bluff, so it is kicking up a storm. It is clear that those who might be categorised as the pro-gambling lobby and those such as myself, who could be described as the safer gambling lobby, agree that if we are to create a safe environment, affordability is an area that needs tightening up. I wonder whether that was explained to everyone who signed the petition.

The petition states:

“The proposed checks could see bettors having to prove they can afford their hobby if they sustain losses as low as £1.37 per day.”

That figure has been scoffed at a few times in this debate, but it is £500 a year. It may mean nothing to us as MPs on 86 grand a year, but that £500 a year could be the difference for some poor people who are trying to put money in the meter or food on the table. What we are trying to do is to stop them getting to the point at which they lose that money in the first place. Please do not belittle that. If the checks say people can afford it, they can afford it. We are trying to help those at risk. Surely all gamblers can see that, because they understand risk.

The UK Government have already said that

“the proposed checks are only on the very highest spending online customers”.

The Gambling Commission estimates that

“approximately 20% of customer accounts will meet the threshold required for a financial vulnerability check”.

The next line of the petition is about the black market. The Gambling Commission has already reported to us that the size of the online black market has been overstated by the industry and must be kept in proportion. It follows that if we want to prevent the growth of the black market, the solution is regulation to prevent harm that leads to addiction. It will eliminate demand for a black market, not cause it. Harm prevention will mean fewer addicts, fewer self-exclusions and fewer attempts to circumvent the regulated market in the first place.

The key is in the last line of the petition:

“We are concerned there will also be a negative impact on British horseracing’s finances due to a reduction in betting turnover and resulting fall in Levy yield.”

That is a Trojan horse if ever I have seen one.

[Matt Hancock]

I have been listening with increasing disappointment to the tone that the hon. Member has taken. Given the importance of tackling problem gambling, does he recognise, like the 7,000 people who live in my constituency, the importance of horseracing? Does he recognise that horseracing betting has an equally low rate of associated problem gambling as betting on the national lottery? The national lottery is carved out of this proposal. Should not horseracing betting also be carved out, so we can all concentrate on tackling gambling harms, exactly as the hon. Member would like us to?

[Ronnie Cowan]

I was bringing attention to the message that has clearly been given out by the UK Government. The Government are keen to ensure that the measures such as the proposed changes do not adversely affect racing or interrupt the customer journey. They also cannot push away high net worth individuals such as the owners and trainers who invest in the sport. I would suggest that it is not for me to say this; the Government are all over it. The Government understand the difference between online gambling, casino gambling and horseracing.

The key to the problem is that people are spending more than they can afford. As a result, some are dying. That is the human cost, and that cost is completely unacceptable.

Post Office Management Culture

Ronnie Cowan Excerpts

Thursday 8th February 2024 Commons Chamber

[Ronnie Cowan (Inverclyde) (SNP)]

Thank you, Mr Deputy Speaker, for calling me to speak so early in this debate.

We are today debating the Post Office’s management culture, but I very briefly want to touch on the responsibility that Fujitsu has, because as I understand it, it, too, is culpable and should be part of any agreed outcome. Fujitsu has a role to play in bringing this sorry tale to a speedy end. Every computer system in the world has the potential to contain bugs. People write the code. Errors can happen, but the vast majority are tiny. What matters is how those responsible react once an error has been identified.

I worked in IT for 35 years, most of which were spent developing and implementing computer solutions for business problems. We reviewed code—we pored over it, and we took pride in doing it. Somebody, somewhere, at some point was looking at this particular problem in the Horizon system. Why were they looking at that problem? Who directed them to it, and when were they asked to address it? I have no wish to stereotype my fellow software developers, but I have a vision in my head of somebody with a brain-load of code looking at this problem one morning and then being struck by something. They take off their headphones and put down their fifth cup of coffee of the day and say, “We have a problem here. This is important.” In any system worth its salt, the modification to fix that problem will have been documented, and somebody within Fujitsu will know when it was identified. Therefore, at what point did the staff inform the Post Office? That matters, because then we know when the Post Office stopped acting out of ignorance and belligerence and started lying to people.

Today we have a Government who have been in denial. It is as if this is not a problem of their making. Please correct me if I am wrong, but the Post Office is a limited company owned entirely by the UK Government. The Department for Business and Trade has responsibility for postal affairs. Ofcom is the regulator of postal services. It is a public corporation accountable to Parliament. Can anyone imagine what it is like to be an individual wrongly accused of a crime, humiliated and ridiculed, forced into bankruptcy and knowing that they were innocent for all those years, while the wider establishment stood back and did nothing?

The Post Office proudly boasts that

“at our core we are a business driven and defined by our social purpose”.

Well, here is a chance to prove that, and it has failed. That is despite the contrition, despite the promises to learn from its mistakes, despite admitting that it got it wrong, and despite acknowledging that compensation must be paid. What we see today is the establishment hiding behind very expensive lawyers for whom I can only presume the taxpayer is paying. Fortunately, in my life I have rarely bumped up against the legal profession in its professional capacity. It has usually been restricted to moving house, and that is confusing enough. The mountains of administration and the perpetual legal speak leave most people gasping for air. What must it be like for someone to face a criminal prosecution of which they are innocent, and then, when that innocence is proven, find that same force utilised to slow down the process that should be working for them to receive compensation?

The letter from Professor Chris Hodges, the chair of the Horizon compensation advisory board, to Nick Read, the chief executive officer of the Post Office, which was quoted by my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows), perfectly encapsulates the current situation. I will not read the entire letter, but I will read a couple of lines:

“Your reliance on legal argument and legal terminology similarly does not impress us. We do not perceive demonstration of behaviour that is anything like a sympathetic understanding towards the people your organisation has harmed.”

I am not for a minute saying that the Post Office does not require legal representation; it certainly does. I am saying that the manner in which it engages with the victims of the Horizon scandal is a measure of its concern, contrition and compassion, and it has failed on all three fronts. That is crucial, because a successful resolution depends on the mindset of the Post Office management changing.

We continually see citizens of the UK being chewed up by large corporate and Government entities. The Equitable Life case, the Women Against State Pension Inequality Campaign, the blood-borne virus scandal, and the Post Office Horizon fiasco are just a few examples. If citizens of the UK are to have faith in their politicians, we need to get it right and be on their side when big corporations beat down on them.

[Andrew Bridgen]

I would like to put something on the record, and see what the hon. Gentleman thinks. I was in the original Post Office review group. By 2015, a whistleblower from Fujitsu had come forward from the boiler room, as they called it. He had been altering accounts without the knowledge of the sub-postmasters. The MPs in the review group knew. The investigator from Second Sight, Ron Warmington, knew. The Post Office knew that the convictions were unsafe, as did the Government, yet it took another five years of very expensive litigation from the 555 before justice was done.

[Ronnie Cowan]

That is an ongoing example of how, historically, the Government of the day thought that they could weather this storm and get away with it. The UK Government have to be part of the solution. Continuing to be part of the problem is unacceptable. They must act swiftly to ensure that all innocent victims have their convictions quashed, and that the correct, acceptable compensation is paid. Anything else is an extension of the ongoing miscarriage of justice that innocent men and women have been subjected to because of the hubris of the Post Office and UK Governments past and present.