Financial Risk Checks for Gambling

Debate between Ronnie Cowan and Philip Davies

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.

Universal Basic Income

Debate between Ronnie Cowan and Philip Davies

Tuesday 13th October 2020 Westminster Hall

[Philip Davies (in the Chair)]

I remind hon. Members that there have been some changes to normal practice in order to support the new call list system and to ensure that social distancing can be respected. Members should sanitise their microphones, using the cleaning materials provided, before they use them and should respect the one-way system around the room. Members should speak only from the horseshoe. Members can speak only if they are on the call list; that applies even if debates are undersubscribed. Members cannot join a debate if they are not on the call list. Members are not expected to remain for the winding-up speeches, but they are perfectly free to do so if they wish.

[Ronnie Cowan (Inverclyde) (SNP)]

I beg to move,

That this House has considered the introduction of a universal basic income.

I thank the Backbench Business Committee for granting me this opportunity. I regret that this sitting is not fully hybrid and that MPs who are isolating or shielding to protect their health and that of others are in effect barred from taking part. That only increases the pressure on Members to travel when they could work from home and forces those who support us to attend the parliamentary estate, too. It was my first time back on the estate for a wee while and I was delighted to see new signs everywhere saying, “Keep left and keep moving”. I am hoping that that is a new sign from the UK Government.

While writing this speech, I noticed that as soon as I typed in the letters “u” and “n”, my iPad prompted me to select “universal”; when I accepted that, it prompted “basic income”. It appears that my iPad has been paying more attention to me than the UK Government have. It also learns quicker.

Universal basic income is an inclusive scheme that protects and recognises everyone. All adults and children receive a set payment on a regular basis. It is fair. It destigmatises the recipient. People are paid regardless of their circumstances. After all, are all people not created equal?

UBI alleviates poverty and reduces inequality. It strengthens a sense of individual citizenship. It empowers people and facilitates civic partnerships. To quote the UBI Lab Northern Ireland working paper,

“A UBI can be understood to be a right of citizenship—a fair share of the assets we and the generations before us have helped create. It recognises each of our stake, or share, in ‘the commons’ of the earth.”

I find that a truly beautiful concept.

A UBI strengthens social bonds and improves mental health. Nobody would deny that economic instability contributes to poor mental health, yet the current system dangles the threat of sanctions over the heads of recipients, going so far as to drive some to suicide. UBI removes that psychological burden. A UBI will not fund the lifestyle of an MP, but it is a platform on which individuals can add other income without fear of financial repercussions.

The current system ties work to welfare. It can make the transition into work more complex. People should be free to take on part-time or occasional work without strings attached. A UBI affords more flexibility to employee and employer, while acknowledging that employees are empowered and less likely to be exploited. It is permanent. It gives security and peace of mind. It cannot be withdrawn or become conditional, unlike the pensions of hundreds of thousands of WASPI women—Women Against State Pension Inequality—who were cheated out of their pensions by the UK Government. That permanency stimulates entrepreneurship, which can lead to the generation of jobs. It is the poorest in society who will directly benefit most; as we know, they are more likely to spend their money on essential items in their own community, which in turn stimulates local growth.

Prior to covid, the upsurge in interest in UBI was attributed to the gig economy, the increase in automation and the creation of a greater number of people described by Guy Standing as “the precariat”. Covid has accelerated the increase in the numbers of the precariat. Many people who once felt safe now feel vulnerable.

It is the duty of any good Government to protect their citizens—not just in the short term, not just by reacting to unfolding circumstances, but by planning for the long term, for future generations. To that end, pilot projects have already been run in Canada, the USA, Kenya, Brazil, Finland, India, Italy, Uganda and Namibia. Versions of cash transfer projects have been run in Iran, Lebanon, Kuwait, Zambia and Zimbabwe. There are plans for UBI-type schemes in Spain, Switzerland, Germany and Ukraine. I have a simple ask of the Minister: have the UK Government taken any steps to learn anything from any of those countries? And please do not quote the Finnish Finance Minister, who came out against UBI before the results of the Finnish trial were even published.

If the UK Government think it is beneath them to be advised by foreigners, will they back pilot projects in the UK and learn from them? Northern Ireland is asking, Wales is asking, Scotland is asking and England is asking. If ever there was a policy that could be pursued and that would be welcomed across the United Kingdom, UBI is it.

The four pilots proposed in Scotland are all well documented—all we need is the co-operation of the Department for Work and Pensions and Her Majesty’s Revenue and Customs. Those pilots will help us not only to learn about the economics of UBI but to understand the political, strategic, institutional, psychological and ethical feasibility of a UBI.

When we exposed the UK to universal credit, it was plain to see that it had not been thought through fully, and it failed miserably. Ever since then, we have been patching and amending the system. If we had run pilots for universal credit, we would have avoided many of the pitfalls and saved many people from the suffering that it caused.

I claim that UBI reduces crime, gives people more opportunity, improves health and mental wellbeing, improves community relations and contributes to a stronger local economy. Minister, run these pilots across the UK and prove me wrong. I know that the Minister is not a fan of UBI: he will claim that the cost makes it a non-starter. Why even consider it, if we cannot afford it? Why run pilots that might tell us that it is amazing, even magnificent, if we cannot then implement UBI? Well, Minister, let us run the pilots, learn what benefits UBI brings or does not bring, and then we can argue about cost versus outcome. If the Minister is seriously telling me that even if all the benefits of UBI that I am claiming can be proved, he would not move mountains to provide them for the citizens of the United Kingdom, then he is skating on very thin ice.

The NHS did not just materialise out of thin air; it was not dreamt up one wet Wednesday afternoon in the Tea Room or designed on the back of a fag packet. The NHS was introduced on 5 July 1948, but prior to that half of Scotland’s land mass had already been covered by the Highlands and Islands Medical Service, which had been set up in 1913. HIMS acted as a working blueprint for the NHS in Scotland. It was directly funded by the state and it had Ministers centrally in a Scottish Office in Edinburgh. It was a pilot project allowed to develop and grow; it uncovered unforeseen problems and fixed them. It ensured that, on day one of the NHS, the NHS was to all intents and purposes good to go.

There is an interesting aside about HIMS. One of its administrators was from my constituency, a Gourock-born woman called Muriel Ritson. She was the only woman on the Scottish Board of Health in 1919, but by 1942 she was sitting on the Beveridge commission, which helped to establish the NHS. The link is there for us all to see. She had learned her lessons, and she brought that learning to bear many years later. She also attended the school that the hon. Member for North East Fife (Wendy Chamberlain) and I both attended.

Mary Breckenridge, an American, visited Scotland in 1924 and later established the Frontier Nursing Service in Kentucky, based on the HIMS model. But not everyone saw the benefits of HIMS—just like today with UBI, the Conservatives argued against it. Lord Banbury objected to English taxpayers contributing money that would be of medical benefits to Scotland. Here we are, all these years later, with NHS Scotland and the wider UK NHS acting in true UBI-style and supporting us all through the current health crisis. If we had not had the NHS, it would have been too late for us to create it. It was there for us and UBI could have been there for us, too.

If the Minister is not prepared to follow current examples from around the world, then he should be brave—support the pilot projects and lead the world. Yes, it will cost more; it will cost lots of pounds and lots of pence. However, their value will be far higher than that of our current system, and the society that the spending will support is too precious not to exist. Although I do not doubt for one minute that budgets must be balanced, recent times have taught us that when the motivation exists, the purse strings can be loosened.

I will now review quickly the response of the Minister to UBI in a recent Petitions Committee sitting. He had three objections. First, how do we afford it? The Minister explained that the Centre for Social Justice found that giving every working-age adult in the United Kingdom £10,000 per year would cost in the region of £400 billion. He seems to think it is higher, but I question that figure. His argument was that the average universal credit claim was more generous at £16,000 per year, completely ignoring the fact that the UC figure is per household. A household with two parents and two kids do not need £5K per adult and £3K per kid to meet his generous standards. I have just halved his £400 billion in one stroke.

His next question was: how do we deliver it? The simpler the system, the cheaper the delivery—and UBI is simpler. Even if it costs the same as the existing system, we are still no worse off. He went on to boast:

“My Department and HMRC have done exceptional work throughout the pandemic to stand up new services and increase the capacity of existing ones. We have been able to move quickly to support over 9 million people”.

I offer genuine congratulations. That is a job well done. I know my local DWP and the one jobcentre left in my constituency have been superb, but with UBI there would be no need for that. All payments would already be in place. With UBI, the safety net has already been built. We are not building it as we are falling.

--- Later in debate ---

[Ronnie Cowan]

I thank everyone who has taken the time to come and speak today, and I thank the Minister for his time as well. I have rebutted most of what he said, because it is the same speech he used in the Petitions Committee, about implementation, outcomes and being too costly. I have already dealt with that here.

If anyone really wants to see how the models work—I acknowledge what the hon. Member for Westminster North (Ms Buck) said on that—with all the numbers in boxes that we can add up, subtract and play all these games with, Annie Miller wrote an excellent book called “A Basic Income Handbook”, which contains many examples that can be drawn on. She also handily gives calculations to put into a spreadsheet, so that people can build their own and play with it. If the Minister wants evidence from across the world, I am not going to bring it to him. He has the staff behind him. I would have thought someone would have brought him evidence and said, “You want to have a look at that.” That is why I asked in my speech whether he had looked at any evidence from across the world. He comes up with these old canards and arguments that UBI makes people indolent and stops them working. There is no evidence anywhere to show that.

I wonder what the final straw will be that makes the Government wake up to the idea. At one point, a couple of years ago, the gig economy was coming forward, and it brought the discussion back inside the Overton window. Now it is covid-19 that is taking us down the next stage of the path. I fear that if we do nothing now, it will be covid-22, a drop in the economy, or a serious escalation of the gig economy. I am asking that we do something now before it is too late. We do not know what the final straw will be. We need to plan now, to go forward. It is wise to fasten the seatbelt before hitting the wall. The Minister believes that the financial cost is too high to justify UBI. I fear that the cost to society without a UBI will be far higher.

Motion lapsed (Standing Order No. 10(6)).

[Philip Davies (in the Chair)]

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I suspend the House for two minutes.