Gambling Act 2005 (Monetary Limits for Lotteries) Bill

Wendy Chamberlain Excerpts

2nd reading
Friday 24th January 2025 Commons Chamber

[Wendy Chamberlain (North East Fife) (LD)]

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

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I hope that those who just walked past the Member about to speak are going to apologise.

[Wendy Chamberlain]

This is a small and, on the surface, technical looking Bill, but one that would revolutionise charity fundraising in constituencies up and down the country. The key clause is 1(2), which would omit subsection (3) from section 99 of the Gambling Act 2005. The law that would be changed is a requirement placed on charity lotteries alone that caps the proceeds of their sales in any given year. Put another way, if someone is running a purely profit-driven lottery with no societal benefit, there are no caps on the number of tickets they can sell, but for charity lotteries—the most well-known being the People’s Postcode Lottery—there is a cap of £5 million per draw and £50 million over the course of a calendar year.

What clause 1(2) would do—indeed, this is the purpose of the whole Bill—is remove that cap and allow unlimited charitable fundraising from licensed lottery sales, because, of course, it is important that the proceeds of the lottery go to charities, rather than just creating bigger and bigger prize pots. As things stand, there is a limit on prizes of £25,000 or, if it is more, 10% of the proceeds of the lottery. The limit is therefore £500,000 with the current cap. All the stakeholders agree that we ought to amend section 99(4) of the 2005 Act so that it reads £500,000, to maintain the current prize levels. My Bill seeks the Government’s agreement to that and asks them to exercise their powers under clause 3 to make the relevant consequential provisions. That is the extent of the Bill—two small legislative changes with a huge consequence for charities across the UK.

There are approximately 500 charity lottery operators generating more than £450 million for good causes every year. As I have mentioned, the largest of these is the People’s Postcode Lottery; indeed, it is the one with the largest reach in every constituency. To date, the People’s Postcode Lottery has coped with the fact that demand exceeds the cap by establishing different postcode trusts that each operate on a thematic or geographical basis, but I would argue that there are three fundamental problems with that.

First, it is incredibly bureaucratic, with each trust having to have its own licences, monthly returns, registrations under Scottish, English and Welsh law, trustees, audit and risk committees, monthly and annual accounts, financial audits, websites and so on. That bureaucracy increases costs that could otherwise be used for good causes. Secondly, it is deeply inflexible, with the funds raised under each trust being required to be directed to the trust theme or geographical designation. Right now, we see Storm Éowyn causing destruction over Northern Ireland and Scotland. If there is damage or some sort of major accident causing loss of life, charities, as they always do, will step in to urgently provide support. However, the People’s Postcode Lottery, for example, would not be able to divert funds to assist with such efforts because of the current rules on trusts, as a result of the cap.

Thirdly, even if we accept the additional bureaucracy and the restrictions on where funds are deployed, at the end of the day, all the evidence still shows that fundraising is being limited by the caps, and in any case, their value is eroded by inflation. It is estimated that if we do nothing and keep the caps today, the charities supported by the People’s Postcode Lottery will lose out on £175 million over the next five years. I challenge anyone in the House to argue that the charities in their constituency would not benefit from that funding.

We already benefit from funding in North East Fife, and I would love to see more support for fantastic local initiatives. I will list some of the individual projects that have been supported in the last two years alone. St Agatha’s and St Andrews nurseries received funds for the cost of outdoor education equipment and training. There has been support for Scotland’s international poetry festival, StAnza, which takes place in St Andrews every year—I am looking forward to March’s programme. The Newburgh wellbeing choir, which provides support for people living with dementia, was able to hire professional singers trained in dementia inclusion to lead the group. Nurture Steps had a project funded to run support sessions for parents of young children with disabilities, and Veterans Tribe Scotland was supported on a significant project to reduce isolation, loneliness and anxiety among those who have served our country. There were funds allocated to maintain a community playing field at Dunbog community hall. In the late summer, I hope to go to the Cupar big weekend, which has also been supported by charity lotteries.

I could go on; there are countless projects. For example, the Cupar food bank and local brownie units receive funding from their central bodies, the Trussell Trust and Girlguiding, that also comes from charity lotteries.

[Olly Glover (Didcot and Wantage) (LD)]

I commend my hon. Friend for bringing the Bill before the House and for all her work to promote charity lotteries. Does she agree that, in addition to all the organisations she has listed in her constituency, the MS Therapy Centre in Milton Park, Chilton county primary school and the Letcombe Brook Project in my Oxfordshire constituency would benefit further if the Bill progresses?

[Wendy Chamberlain]

My hon. Friend has just exemplified what I said earlier. Every single one of us has probably attended drop-ins in Parliament and seen the benefit of charity lotteries in our local communities.

Fundraising is not a one-off thing. There will be other projects that were not successful in getting funding, or all the funding they needed, because it has not been available under the current system. I would like to bring in some of those charities’ voices directly. I hope the Minister is aware that before Christmas, over 100 charity leaders wrote to the Prime Minister asking him to support my Bill. They pointed to the absurdity of charity fundraising being restricted. They noted, and I have to agree, that

“supporting this vital reform would send a strong message on the Labour Government’s backing for, and belief in the third sector and a vibrant, well-funded society.”

I spoke with one the signatories of the letter, Children First, earlier this week. It said:

“In a financial climate that is more challenging than ever, we rely on charitable fundraising to deliver the essential services we provide to children and families across the country. Importantly,”—

and I think this is a very important point—

“the unrestricted nature of the funding means we are more able to use the money in the most effective way for children and families, bridging gaps in the ever-complex funding environment. Many of our services rely on a jigsaw of income, sometimes stretching to 20 different sources all with conditions, data gathering and reporting requirements. This, in turn, has an impact on how much we can do for the children and families we support as time and energy is locked into sustaining funding as opposed to supporting families.”

[Mr Lee Dillon (Newbury) (LD)]

My hon. Friend talks about the financial pressures that charities face. Volunteer Centre West Berkshire has said that charities in West Berkshire will need to find an additional £383,000 next year just to stand still, because of the increase to the minimum wage and national insurance contributions. With the Government causing charities concern through national insurance, does she agree that her Bill would allow them to ameliorate some of that harm?

[Wendy Chamberlain]

Yes, I absolutely agree. Indeed, in a Westminster Hall debate just last week, where the shadow Minister, the hon. Member for Isle of Wight East (Joe Robertson), also spoke, I highlighted that very thing: the national insurance increase will hurt charities, and there is an opportunity for the Government, through my Bill, to ameliorate some of that.

Children First also said that it understands that technical barriers place limits on the way that charity lotteries provide funds and that it supports calls to remove the cap. There are about 170,000 charities across the UK. Of course, not all of them want or need charity funding, but many thousands do.

There are many reasons why the House should support the Bill. I understand some of the Government’s concerns. I have been told that they are worried about the impact on the national lottery, considering the Secretary of State’s statutory obligation to maximise its success. However, I would argue that there is no evidence to suggest there is a detrimental impact on the national lottery from charity lotteries. The Gambling Commission has investigated this three times in the last 15 years, most recently in October 2017, and found no statistically significant effect of charity lotteries on national lottery sales. That was confirmed again in 2022 in an impact assessment by Regulus Partners.

My goal with the Bill is to keep the distinct nature of the national lottery by protecting its much larger prize pots. This weekend, the lotto’s prize is £4 million, while the Euromillions’ is £83 million. In changing the law on sales, we want to change the current price cap to keep the prize maximum at £500,000. It is a very different ball game, and the Bill supports the evidence that players of one lottery often play the other as well.

I know that the Government are awaiting updated research. I suggest that the Government choose to progress my Bill today and consider the research at Committee stage or later. From my conversations with the Minister, I understand that the Government are determined to hold their current position that they want to see the evidence first. I hope that the Minister will confirm the commitment to make the research public when it is received and to update the House on the Government’s review of the research before the summer recess. I hope she will then set out any legislative action the Government are prepared to take.

I know that the Minister supported these reforms in opposition and is therefore sympathetic to the purpose of the Bill. I am sure she is aware of the money charities in her constituency have benefited from and will continue to benefit from. The Station House Community Association in her constituency notes the following in a project description:

“this grant has supported our running costs—just like everyone else all our bills have increased and we need to cover these costs.”

As my hon. Friend the Member for Newbury (Mr Dillon) highlighted, this is an issue we hear everywhere, particularly now that charities are faced with the additional cost of national insurance contributions. Increased fundraising to counterbalance these additional costs will be increasingly vital over the years ahead if charitable projects that we all champion are to survive. The Bill offers a way for the Government to support such charities, and at no cost to the taxpayer. It is a win-win in my view.

Before I finish, I would like to touch on gambling harms. I am a strong believer in reforms to the sector to protect people from problem gambling. Public Health England has said that there are more than 400 gambling-related suicides a year and that it costs the UK £1.4 billion. Extrapolation of this data by Gambling with Lives suggests that up to 650 gambling-related suicides take place across the UK each year. My party wants to see a compulsory levy on gambling companies to fund research, education, treatment, restrictions on advertising and the establishment of a gambling ombudsman.

The seriousness of addictive, problem gambling cannot be underestimated. I want to outline the steps that the People’s Postcode Lottery takes to tackle it. Players sign up to a monthly subscription to be entered into the draws. The number of monthly subscriptions for a single player is limited, and draws take place throughout the month with results published accordingly. One of the most influential factors in the development of gambling problems is the ability to gamble in real time over and over again. Charity lotteries do not allow real-time gambling, so it takes away the ability to chase a perceived high. Lotteries are widely recognised as being low-risk games compared to other forms of gambling.

To conclude, I feel confident that there are only benefits to the Bill. There are benefits to the charity sector, which is facing unprecedented pressures, to local charities and community projects, and ultimately to all of our constituents.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.