Football Index Collapse

Debate between Ruth Cadbury and George Howarth

Tuesday 7th June 2022 Westminster Hall

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

It is a pleasure to serve with you in the Chair, Ms Ghani. I also want to thank my hon. Friend the Member for Blaydon (Liz Twist) for bringing this debate and to acknowledge the excellent contributions we have heard so far.

The £124 million spent on the Football Index scandal was not lost—it did not disappear down the sofa and it did not fall out of a purse. It was taken in a business model that was rightly described by the hon. Member for Newcastle-under-Lyme (Aaron Bell) as a Ponzi scheme. A scheme that was allowed to happen because the Gambling Commission and the FCA failed in their duty to regulate gambling firms and protect consumers, and the Department for Digital, Culture, Media and Sport did not act when warned.

The Gambling Commission was told on many occasions, and certainly by somebody who knew the business back in January 2020, that the Football Index was deliberately imitating an investment product and that it was leading to users

“believing that they were investing rather than gambling”.

People were conned to bet—sometimes tens of thousands of pounds, and even six-figure sums, as colleagues have already mentioned.

[Sir George Howarth (Knowsley) (Lab)]

The recurring theme throughout this debate has been the regulatory failure that my hon. Friend refers to. Does she agree that in such circumstances the Government are the only organisation that can put it right?

[Ruth Cadbury]

My right hon. Friend is absolutely right, and I will come to that point. As I say, there were various stages. The Gambling Commission took over a year to withdraw the licence and say that Football Index’s product was an exceptionally dangerous pyramid scheme under the guise of a football stock index. By submitting a written question to Ministers, I found out that it then took over a year for the Gambling Commission to warn the Department for Digital, Culture, Media and Sport. It was not until 10 March 2021 that a letter went from the Gambling Commission to DCMS. In that year, a gaping black hole existed, and through that black hole went the hard-earned savings of my constituents and those of many others. Millions of pounds went down that black hole.

As hon. Members have said, there is a wider point. The scandal points to yet another failure of financial regulation in the UK. The FCA was set up to protect consumers, but we saw that it failed to act over the collapse of London Capital and Finance, which affected other constituents of mine, and many other schemes have taken people’s hard-earned savings. The FCA needs to be strengthened, because we cannot have a financial regulatory regime that is effectively a Potemkin village that exists in name but takes no real action and does not do enough to warn people about scams. My constituents, and the thousands who have been conned out of their money, deserve better than this.