Third Reading

Gambling (Licensing and Advertising) Bill – in the House of Lords at 3:08 pm on 18th March 2014.

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Amendment 1

Moved by Lord Gardiner of Kimble

1: After Clause 1, insert the following new Clause—

“Payment of Horserace Betting Levy by holders of remote operating licences

(1) The Secretary of State may by regulations made by statutory instrument make provision so as to secure that the bookmakers by whom the levy under section 27 of the Betting, Gaming and Lotteries Act 1963 is payable include bookmakers who are required to hold a remote operating licence (within the meaning given by the Gambling Act 2005).

(2) Regulations under subsection (1) may—

(a) confer a discretion on any person;

(b) include provision amending, repealing, revoking or otherwise modifying any provision made by or under an enactment;

(c) make different provision for different purposes;

(d) include incidental, consequential, transitory, transitional or saving provision.

(3) No regulations may be made under subsection (1) unless a draft of the statutory instrument containing them has been laid before and approved by a resolution of each House of Parliament.

(4) Nothing in this section is to be read as preventing—

(a) the bringing into force of Part 2 of the Horserace Betting and Olympic Lottery Act 2004, or

(b) the exercise of any power under that Part.”

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip) 3:09 pm, 18th March 2014

My Lords, I thank your Lordships for the helpful and constructive discussions that have taken place on the horserace betting levy. As I said on Report, these discussions have been very valuable and have helped to take us to where we stand today.

This amendment provides the Secretary of State with reserve powers to make regulations to secure extension of the liability to pay the horserace betting levy under Section 27 of the Betting, Gaming and Lotteries Act 1963 to all bookmakers who are required to hold a remote operating licence from the Gambling Commission under the Gambling Act 2005. That will include bookmakers who are based outside Great Britain and who will be required to obtain a remote gambling licence as a result of the Bill.

This amendment is fully in keeping with the context and purpose of this remote gambling Bill, which is about levelling the playing field for bookmakers engaging with British punters. Subsections (1) and (2) of the proposed new clause are broadly drafted to ensure that the Secretary of State has power to make all the changes that may be necessary to secure extension of the levy to offshore bookmakers. This clause ensures, for example, that the Secretary of State has the power to make changes to the levy scheme that may be necessary to secure extension compatible with the UK’s obligations under EU law.

Subsection (3) is essentially the same as the amendment tabled by my noble friend Lord Astor on Report. Secondary legislation brought forward under this amendment will be subject to the affirmative procedure in both Houses of Parliament. Subsection (4) expressly makes clear that existing provisions to abolish the levy once a suitable replacement has been found are unaffected by this amendment. The Government believe that any statutory levy should be fairly applied, but that does not mean that we are abandoning the search for a replacement that more appropriately reflects the modern betting and racing industries. The Government now intend to move forward quickly on two concurrent projects.

First, on extending the levy, we will seek to complete the necessary work in time for negotiations on the 55th levy scheme in 2015 to take place on the basis of extension. I must add that this timing will, of course, be subject to the outcomes of discussions with the European Commission that will begin this Friday. The timing will also be subject to the outcome of a consultation on the mechanics of implementing levy extension which will begin shortly. At the same time, we will develop wider levy reform options and consult on those later this year. This amendment is about collecting the horserace betting levy in a fair and consistent way. It is a reasonable amendment which I believe commands widespread support. I beg to move.

Photo of Viscount Astor Viscount Astor Conservative

My Lords, I thank my noble friend for bringing forth this amendment instead of the amendment that I moved on Report; this amendment in lieu is better drafted than mine. I am very grateful for the support that both he and the Minister for Sport in another place, Helen Grant, have given on this issue. The amendment has been widely welcomed by the racing industry and by the majority of the betting industry. Of course, the hard work of looking forward to a replacement of the levy now begins, which will require a great deal of movement from all those parties involved in racing to come to a conclusion that will work and is a commercial agreement. In the mean time, I thank my noble friend for bringing forward this amendment.

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, I am aware that the House is keen to get on to the important debate that we will hold on the Ukraine this afternoon, so I will not detain it longer than I have to.

I start from a position that may not be widely shared in this House—I do not know—which is that I am against the levy, and I have been for years. When I started off being against it I was in a minority of one, but now a large number of people have come round to the view that it is not desirable. The two Members of the House of Commons who have most knowledge of these matters—Mr Philip Davies and Mr Laurence Robertson, who chairs the Racing and Bloodstock Industries All-Party Group—are both anti-levy. On their good days the Government are anti-levy, since they have explained that they want a replacement of the levy. I hope that it will be a commercial replacement that comes along.

I am against the levy for two reasons. First, for my sins I am by training an economist and, like all economists, I believe that subsidies, ceteris paribus, are a bad thing. They distort markets and interfere with the generally beneficial results in industry of free competition. The statutory levy on horseracing betting is an exemplar of this; it means that racing spends much of its time lobbying for more levy instead of putting its house in order and modernising the sport. It leads to bigger prizes, which in turn lead to inflated prices for the best bloodstock and then demands for even bigger prizes, so that that investment in inflated-priced bloodstock pays a dividend. Supernormal profits are made by some participants in the sport, including successful trainers, but I observe that little of that money trickles down to stablehands.

Secondly, I am against the levy because, as a socialist— I am sorry if that word shocks some noble Lords—I believe in greater equality. What we have in the levy is a statutory mechanism that redistributes wealth from the less well-off to the rich. The poor punter in the betting shop subsidises the agreeable hobby of the rich racehorse owner. You never meet a poor racehorse owner, unless you meet one who has shown an excessive belief that his pride and joy is going to win the next race and has invested accordingly with the bookmakers.

So I should like to live in a levy-free world. If in such a world the betting industry and horseracing industry decide that it is in both their interests to have a commercial arrangement whereby betting provides money for horseracing, that is all well and good. I have no desire to interfere in a free contract. Indeed, quite a lot of that has been happening, because media rights for covering horseracing have been rising quite rapidly. You do not read that when you hear racing’s pleas for more and more levy. Even more significantly, we have been edging towards a commercial agreement on support from one industry to another, and the last levy settlement reflected that. As Parliament clamps down, as I am sure that it will, on FOBTs in betting shops, so the betting industry will need horseracing more and will have to pay to get the product that it requires. There is nothing wrong with any of that.

As an anti-levy person who is glad to see the signs that it may be fading away, where does that leave me on the amendment? I can see the Minister’s argument that, if you are going to have a levy, it is better to have a fair one than to have an unfair one—so I am not necessarily opposed to doing what the amendment would do to make the levy payable on bets with overseas operators. It is the level playing field argument, and who can be against a level playing field? However, a fairer levy is not at all the same thing as a larger levy. It is a quite different question to how much should be raised in a levy. So I would ask the Minister when he replies for the reassurance that behind this amendment does not lie any intention to signal that the Government believe that the yield of the levy should be in future higher than it is now. That is a position on which the Government should be strictly and studiously neutral.

Will the amendment bring a levy-free world closer or less close? I note that William Hill, the bookmakers, made a comment in the Racing Post, to the effect that altering the levy in this way might mean that the whole scheme was declared illegal as a state aid by the European Union. In reaching this conclusion, it analysed the recent decision of the Commission in the French case, allowing a scheme in some ways analogous to that which the Government propose here. It pointed out, first, that that decision is being appealed by the Remote Gambling Association and its members and, secondly, that an aid that might not be regarded as distorting competition in a market such as that of France, which is essentially non-competitive, might not be allowed in Britain, where the market is highly competitive. So it is a glimmer of hope. The Government might go down that path but, with any luck, the Commission might use it as an opportunity to get rid of the levy anyway.

William Hill also points out—and I think that this is an even better point to rest on—that, although the Commission may allow the levy not to be state aid, that may depend on how it is spent. If it is spent in deprived areas, supporting racecourses that would otherwise close down, that is one thing, but if it is used just to stack up larger and larger prizes for owners, that is another. Therefore, we may get not only a fairer but a better levy as a result of the unplanned consequences of this amendment and any regulations under it. The Commission took precisely that view of the proceeds from the sale of the Tote. As noble Lords know, some money was retained from those proceeds for racing, but it had to be spent in certain ways, and not necessarily in the ways racing would have preferred.

However, none of these desirable consequences can be relied on, so I want to press the Minister on one absolutely central point. When he announced the bringing forward of this amendment, he argued that the Government were taking these powers without prejudice to their long-lasting, though slow-moving, efforts to find the holy grail—a levy replacement which did not involve government in fixing the flow of funds from one industry to another. I ask the Minister to give those assurances again today in the strongest possible terms and then to go off with his colleagues and betting and horseracing representatives to find a system which does not involve a state-enforced transfer from poor punters to fat-cat owners.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat 3:15 pm, 18th March 2014

My Lords, having spoken at all stages of this Bill in favour of the amendment of my noble friend Lord Astor, I add my thanks to those he gave to the Minister. I certainly wish him and his colleagues well in their discussions with the European Commission. I very much hope that he will avoid the dire consequences predicted by the noble Lord, Lord Lipsey, or, indeed, those whom he cites.

I take this opportunity to thank the Minister, with one exception, for his courtesy and the care that he took over the Bill throughout its proceedings. He gave many assurances, which I am sure we will all follow up in due course. I only hope that his discussions with the casinos are proceeding apace and that that anomaly will be ironed out in due course. Given good will on all sides—I know that the Minister has that good will—I am sure that we will find a suitable solution. It may not be the optimum one but it will be a solution.

Photo of Lord Palmer Lord Palmer Crossbench

My Lords, I, too, rise briefly to add my support to this amendment and to pay great tribute to the noble Viscount, Lord Astor, and, indeed, to his noble friend the Minister. I must declare an interest in having a son who trains horses and I have an interest in his yard at Newmarket. I congratulate the Government on taking this on board so very seriously.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, I rise merely to register a sadness in that, in moving Amendment 1, the Minister is abandoning his long-standing opposition to any amendment to the Bill. I am concerned that the one amendment to which he has agreed provides regulation-making powers that will help the industry, but he has not introduced a balancing amendment to help with consumer protection and to help the vulnerable.

I was pleased that the noble Baroness, Lady Jolly, said at a meeting with Sky Bet and me that the Government were at least considering backing up their voluntary approach to FTB with regulations, and I am disappointed that the opportunity to insert them in the Bill has now been lost. I very much hope that the Government will put this right in the consumer protection Bill because consumer protection is also very important.

Photo of Lord Wade of Chorlton Lord Wade of Chorlton Conservative

My Lords, other Members may remember a similar discussion in this House in the early 1990s when the Duke of Devonshire said in terms—I cannot remember exactly what he said—that in his view any well brought up young man should have a mistress, a yacht and a racehorse; and that, if he could not afford any one of them, he jolly well should not have them. I am inclined to agree with him.

Photo of Lord Collins of Highbury Lord Collins of Highbury Opposition Whip (Lords), Shadow Spokesperson (International Development)

My Lords, I am not sure how I can follow that remark but I shall try my best.

I should like to add my thanks to the Minister for taking on board the principles contained in the amendment tabled by the noble Viscount, Lord Astor, to which I added my name. There is, I think, true cross-party support for this amendment and this move. There may not necessarily be support for it on my own side but that is another matter.

However, this change will undoubtedly lead to a healthier sport, more investment, growth and jobs. Where I certainly share the opinions of my noble friend Lord Lipsey, is my belief that any such extension should lead to the extension of work that the levy supports on training, education and employment. I, too, welcome the Minister’s commitment that the two work streams of levy extension and wider levy reform will run concurrently. I do so because neither process can be used as an excuse to hold up the other—again I share the views of my noble friend. It is really good that the Bill team have given that commitment. I share the view that has been expressed that there is a need for a more modern and commercial framework for the levy. I know that that is supported not only by the racing industry but by everyone who works in it. That is where I should like to add my voice.

Action has long been required. I congratulate the Minister and the Bill team, who have done excellent work on the Bill, on not allowing the opportunity for primary legislation to pass without this action. However, I want to ask one question, which reflects my noble friend’s point, too. The Minister should begin consultation on levy reform options as soon as possible, and on this side we would also like this to include the option for a horseracing right.

Photo of Baroness Trumpington Baroness Trumpington Conservative

My Lords, I am delighted that the Bill is finally going through. I have one question. Does the Minister agree that without the Maktoum family, we would have absolutely no media coverage of racing? I, for one, would very much regret that. We should somehow show our gratitude to those who make it possible for a much wider public to enjoy racing. I congratulate again those who have produced the Bill.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

I thank your Lordships once again for the fascinating contributions to this short debate. We have gone into some interesting country already, and I particularly thank my noble friend Lord Astor, who has assisted so much in reaching a reasonable and fair result. I am mindful of what my noble friend Lord Clement-Jones said. I am sorry that I was unable to satisfy him on all points, but we have endeavoured at every turn in this honest adventure to get things as right as possible. I certainly know that the noble Lord, Lord Palmer, has a strong interest in racing. I am not sure what more could be said about my noble friend Lord Wade’s contribution, other than it was powerful.

I also wanted to say to the noble Baroness, Lady Howe, that we have had some very good discussions. I should like to reassure her and I will say so in the next group. Those discussions have been constructive, and the reason the Government felt that this provision was a natural extension to the Bill is that it was in a natural sequence of what is intended in the Bill as regards remote gambling.

My noble friend Lady Trumpington is a great champion of racing, and I endorse what she said because I do not see racing, or indeed life, as being about divisions of people. Whether one is a stable lad or a racehorse owner, we all enjoy the racing and we love the horses. That is what I see as the unity in the racing crowd and the people involved. I know many of them from all parts of the country and racing is a very important part of our economy.

I also agree with what the noble Lord, Lord Collins of Highbury, said in support of racing: it is very important that the work of the levy is constructive. The noble Lord outlined some of the levy’s extra work, and I am pleased that the concurrent work on both the extension and the wider reform has been well received. It is something on which we very much want to make progress.

I want to refer to the two questions raised by the noble Lord, Lord Lipsey. I very much hope that my opening remarks provided some of the reassurance that he seeks. We are absolutely not abandoning our efforts to find a suitable alternative to the levy. I reiterate that we believe that any statutory levy should be fairly applied, but it does not mean that we are putting aside the work on the wider levy reform that is expected later this year. I am sure that many of your Lordships will wish to engage in the consultation on that. Obviously there have been pitfalls in the work that has gone on over the years but let us see how we do with this particular activity.

The noble Lord also made a point about future levy yields. I have looked at the amount of money received in the past from the levy and it seems to have gone up and down. First and foremost, this amendment is designed to provide a level playing field and a fairer levy, as the noble Lord acknowledged. However, the rates of an extended levy will be a matter for the independent statutory Horserace Betting Levy Board. I underline “independent”—we obviously have independent bodies to work with the betting and racing industries, as is currently the case. I very much hope that this will be a success.

Amendment 1 agreed.

Clause 5: Extent, commencement and short title

Amendment 2

Moved by Lord Browne of Belmont

2: Clause 5, page 3, line 33, at end insert—

“(5A) An order under subsection (5) relating to the commencement of section 2 may not be made until the Secretary of State has reported to Parliament on the outcome of any reviews into advertising of gambling in Britain that they have commissioned in the six months before the day on which this Act is passed.”

Photo of Lord Browne of Belmont Lord Browne of Belmont DUP 3:30 pm, 18th March 2014

My Lords, I have always been very concerned that the Bill seeks to regulate online gambling providers based outside the United Kingdom through advertising. It proposes that providers across the world should be told that if they obtain a UK Gambling Commission licence, they will be able to advertise in the United Kingdom. I have argued that it is better to secure compliance through proper enforcement—the stick of financial transaction-blocking rather than the carrot of the offer of being able to advertise in the United Kingdom.

To date, I have contended for that primarily on the basis that, for reasons that I will not repeat now, the offer of advertising is not a robust enforcement mechanism, rather than on the basis of the impact of this approach on the scale of gambling advertising. My reason has been that I assumed that increased gambling advertising was something to which the coalition Government were deeply committed because of the nature of this Bill.

The Bill radically changes the law regarding advertising. At present, it is legal for providers based only in the European Economic Area and white-listed jurisdictions to advertise in the United Kingdom. The Gambling Bill, however, changes this radically, proposing that any provider based in any jurisdiction in the world should be able to advertise in the United Kingdom so long as they obtain a UK Gambling Commission licence. This means that we will move from a place where providers in just 31 jurisdictions outside the UK can advertise in the UK to a place where providers in any of the 196 or so jurisdictions in the world can advertise if they obtain a Gambling Commission licence. This widens the jurisdictional scope for advertising online gambling in the UK by more than sixfold. That is a radical change, a change which I thought was as a result of the fact that the coalition Government not only want better regulation, in the sense that they want more companies to get Gambling Commission licences, but also want, or at least are relaxed about getting, much more advertising for online gambling. I thought that they could not have allowed such a Bill to go to Parliament if that was not the case.

Imagine my shock when on 2 March 2014, I read in the Sunday Times the Secretary of State for Culture, Media and Sport, state:

“I also think we need to look again at the regulation of gambling advertising across the UK. In particular, I ask myself if the seemingly constant gambling adverts on television are appropriate. Ofcom figures show a 600% increase in television gambling advertising between 2006 and 2012. This concerns me and I think many people feel uneasy about the high levels. For this reason I have asked the Advertising Standards Authority to review the codes for gambling advertising to see whether change is needed. The outcome of the review could see significant changes in the way gambling is advertised in Britain, ensuring children and the vulnerable are better protected”.

While I am pleased and delighted by that statement, I am at a loss to know how the Secretary of State can make this assertion on the one hand, yet on the other be taking through Parliament a Bill that widens the scope for online gambling providers to advertise in the United Kingdom from 31 jurisdictions to providers in every jurisdiction in the world, so long as they obtain a UK Gambling Commission licence. The Secretary of State is rightly concerned about a 600% increase in television gambling advertising between 2006 and 2012 but she should also be very concerned about the 600% increase in jurisdictions hosting online gambling providers that she says should be able to advertise in the UK if they get a Gambling Commission licence.

I know that at this point some may be tempted to say, “Don’t worry, all these providers will only get the opportunity to advertise because they also come under our regulation”. The implication is that regulated advertising is okay. However, the scale of advertising to which the Secretary of State referred, like the 600% increase in television advertising, is legal and regulated but that does not make it unproblematic. Britain’s primary problem is not the scale of illegal, unregulated advertising but rather, as the Secretary of State’s comments make plain, the scale of legal, regulated advertising which this Bill proposes further to increase.

Today, as the Secretary of State rightly pointed out, we have a problem about the scale of gambling advertising following the 2005 Act. Yet the truth is that we are about to sanction the 2014 Act, which will, if you are concerned about the scale of advertising, make matters much worse, dramatically widening the scope for regulated gambling advertising. It seems to me that the only logical response to the concerns expressed by the Secretary of State about the scale of regulated gambling advertising in the United Kingdom is to narrow the scope for such advertising, not dramatically widen it as this Bill does. In that context, rather than sanctioning Clause 2, arguably the more sensible thing to do would be to delete it. I have, however, opted for a much more modest approach of delaying its implementation.

My amendment states that an,

“order under subsection (5) relating to the commencement of section 2 may not be made until the Secretary of State has reported to Parliament on the outcome of any reviews into advertising of gambling in Britain that they have commissioned in the six months before the day on which this Act is passed”.

Given the significant contradiction—a kinder phraseology would be tension—in the Government’s position and the scale of public concern about what they are proposing, the very least that the Government should do is to delay commencing Section 2 until after the Government have reported to Parliament on the four initiatives that the Minister outlined in his response to Amendment 3 tabled by the noble Baroness, Lady Jones, on Report on 4 March.

In that context, I have two questions for the Minister. First, there seems to be some confusion about the timings of the reports to which the Minister and the Secretary of State committed themselves last week. Will the Minister clarify the timetable? I hope that he can tell us that all reports will be made to Parliament within six months. Secondly, and much more importantly, what assurances can he give Parliament about the future of advertising regulations, especially under the Bill? His response to this question is important.

If we are to be generous to the Government, the only way that they can introduce the Bill and for its advertising implications not to contradict the thrust of what the Secretary of State said about the scale of regulated gambling advertising on 2 March—especially the 600% increase in TV advertising—would be to do the following: first, significantly to tighten up regulation of the gambling advertising that is currently permitted before the Bill takes effect, such that the scale of advertising is significantly reduced; and, secondly, for the regulations governing the operators that will, courtesy of the Bill before us today, be allowed to advertise in the United Kingdom from abroad to be applied very tightly from day one.

If the current level of advertising is significantly reduced, there may be space for a small increase in advertising from online providers from abroad without that increasing the scale of gambling advertising. This strategy of significantly tightening current advertising and then allowing new advertising through the Bill only on a limited basis is the only possible way in which the Secretary of State’s expression of concern about the scale of gambling advertising—I note again the 600% increase in TV advertising—can possibly be reconciled with the Bill.

To that end, I very much hope that the Minister will provide the strongest possible assurance that the Government intend to embrace the amendment. In this regard, I note with great concern that Section 328 of the Gambling Act 2005 allows the Secretary of State to make regulations controlling the advertising of gambling, but the Explanatory Notes to the current Bill say that no regulations have been made under Section 328 to regulate advertising. I suggest that that needs to change. What does the Secretary of State intend to do with her order-making powers?

Mindful of the importance of the Secretary of State’s expression of concern about the scale of regulated gambling advertising and the fact that the Bill dramatically widens the scope for such advertising throughout the United Kingdom, it is only proper that the advertising provisions in the Bill do not come into effect until the advertising review process has been completed and the findings presented to Parliament. I beg to move.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, I fully associate myself with the comments made by the noble Lord, Lord Browne of Belmont. I shall not repeat what he said, but merely underline that he is absolutely right to highlight the contradiction between the impact of the Bill on advertising and the statement of the Secretary of State expressing concerns about the current level of advertising, even before this law has taken effect. It is vital that we insist that Parliament should be given time to respond to the gambling advertising review promised on Report—it is, I would stress, a response to the Secretary of State’s concern about the current scope for gambling advertising which this Bill will dramatically widen—before Clause 2 of this Bill is commenced.

The truth is that because of this Bill the Government hope that we will sanction online gambling providers right across the world, including countries such as China, Korea, Brazil and Argentina, which for the first time will be able to advertise in the UK if they get a Gambling Commission licence. This seems, as the noble Lord, Lord Browne, has said, a strange way of responding to the significant and legitimate concerns expressed by the Secretary of State on 2 March. There are other ways of regulating that do not mean that any increase in regulation must result in an increase in advertising, as financial transaction blocking demonstrates so very plainly.

I look forward to what the Minister has to say because, as I failed to point out when I spoke earlier, he has definitely been a listening Minister and has tried his best to meet our concerns. However, I am sad to say it does not look as if this issue has been met.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport) 3:45 pm, 18th March 2014

My Lords, we are slightly surprised to be revisiting this issue today. Although it is very important, it was discussed in some detail on Report, so we have to be impressed by the way the noble Lord, Lord Browne of Belmont, has convinced the Public Bill Office that it was right that he should be allowed to do so. He is clearly someone we shall have to listen to in the future if we want to have our evil way. However, as he has just said, there was a fair amount of confusion at the time, with letters from the Minister crossing with interviews and public statements by the Secretary of State. It is obviously important therefore to use this opportunity to try to tease out the issues that are in play here, and in particular what dates we are actually talking about.

The fact that the issue is coming back to the House at this stage says something important about our concerns about the way our “gambling culture” is developing and its potential to impoverish and cause irreparable social damage to the most vulnerable people in the country. The noble Baroness, Lady Howe, raised the question of why the Bill does not deal with the ills caused by gambling in her intervention on the first amendment, and she has just spoken again on the same point. I agree with her that this is something that we might have to look at again when we consider the Consumer Rights Bill, which is due to come to this House in June.

While gambling may not bring down dilettante Dukes, it certainly does affect others. Your Lordships’ House heard in Committee from several noble Lords who had been most grievously affected in this regard. The noble Lord, Lord Browne, sponsored a meeting at which ordinary people who had been addicted to gambling spoke movingly about their experiences and the need for the Government to take action in regard to their concerns. As we have heard, there was a report on the specific point about the watershed for gambling advertising and the spread of gambling more generally, including advertising for bingo, mentioned by my noble friend Lady Jones. I understand the position to be as follows, and I would be grateful if the Minister, when he comes to respond, could confirm it.

The relaxation of restrictions on gambling advertising that followed the implementation of the Gambling Act 2005 has led to a significantly greater volume of gambling advertising on TV and in other media. In addition, the gambling industry has been innovative and the existing voluntary codes that govern gambling advertising are now applied across a much changed gambling landscape. These technological developments have led to intense competition in remote gambling advertising which has coincided with an increase in complaints and concerns, as I have already mentioned. On Report, the Minister explained that the Government have been monitoring the impact of these developments and considering whether the current controls remain adequate across remote gambling advertising and other forms of online gaming activity, including online bingo.

The Minister went on to say that the Government have asked four bodies to do further work. First, the Remote Gambling Association will co-ordinate an industry-led review of the voluntary gambling codes and will come forward with any proposed revisions by the summer of this year. Secondly, the Committee of Advertising Practice and the Broadcast Committee of Advertising Practice have committed to evaluate the findings of a new report by the Responsible Gambling Trust this month, and will examine the available evidence on gambling advertising and its relationship with problem gambling. We are told that the committees will publish their findings on completion of this work, which could lead to changes in the principal codes controlling gambling advertising, this time by autumn. Thirdly, the Advertising Standards Authority will undertake a review of enforcement action under the gambling rules, taking into account internal intelligence, complaints statistics and trends, to ensure that it is enforcing the rules proportionately and consistently. The ASA, we are told, will communicate the outcome by autumn this year. Finally, the Gambling Commission will consider what revisions might be necessary to the licence conditions and codes of practice to ensure that all gambling advertising continues to comply with the licensing objectives of the Gambling Act. Although this work is principally focused on ensuring that free bets and bonus offers are marketed in a fair and open way in the gambling industry, it will cover a wider range. I note that the last item had no date specified for its completion, and would be grateful if the Minister could specify in his reply when he expects the Gambling Commission to report on its review.

This is a complicated field, with lots of cross-cutting and interesting work going on, and the timings are slightly out of sync. It is therefore right that the noble Lord should press the Minister to come up with a clear statement about where exactly these timings are.

When the Minister does that, perhaps he can also comment on a point that he made in the previous debate, when he said:

“The terms of reference for the reviews are currently being defined and will be made public by the spring”.

A shaft of sunlight just illuminated our gloomy surroundings here, so I gather that spring is on the way. But when exactly is spring, and could we please have these statements so that we can look at them?

On the question of dates and times, the Minister said:

“Any statutory regulations would be preceded by consultation”,

which is good. He also said that the Government,

“will consider the findings of the review before determining what further action may be necessary”—

I would be surprised if they did not—and,

“will confirm their position by the end of the year”,

which is perhaps another variation on “autumn” and “towards Christmas”. He said that he,

“will arrange for a summary of the findings of the reviews and the Government’s response to be placed in the Libraries of both Houses as soon as they are available but definitely by the end of this year”.—[ Official Report , 4/3/14; col. 1297.]

The trope that is coming through is “by the end of the year”. We assume that is this year, although it would be helpful if we could have some clarity on that.

The noble Baroness, Lady Jones of Whitchurch, in her response to the debate on Report, welcomed the change in mood and position from the Secretary of State and the Minister over the past couple of months, welcomed the detail that the Minister had spelt out and, with some reservations, welcomed the commitments that the Minister gave in that debate. However, when she withdrew her amendment, she warned the Minister that,

“we will pursue the Government as regards the work that is taking place over the coming months and try to hold them to account for the commitments that they have given”.—[ Official Report , 4/3/14; col.1298.]

He has been warned. I can sympathise with the wish of the noble Lord, Lord Browne, to see this all tightened up and nailed down. I hope the Minister can repeat the commitments he gave on Report and confirm that his understanding is that we will have action on this troubling issue by the end of this year, 2014, at the latest.

As this is the last time I shall speak on this Bill, I take the opportunity to thank the Minister and the noble Baroness, Lady Jolly, for the constructive and positive way in which we have been able to make improvements to this Bill during its time in your Lordships’ House. We also got a great deal of support from the Bill team. I thank them for their support, which has been of great assistance.

As I said at Second Reading, I suspect that this is not the last time we will need to turn our attention to gambling, not least because the gambling industry is changing so rapidly, but also because of growing concerns about problem gambling, which I have already mentioned. In addition, I think the noble Baroness, Lady Heyhoe Flint, and the noble Lord, Lord Moynihan, who were both in their places a moment ago, made the point that we need to get a proper law in this country about match fixing. The Bills that we are talking about are about preventing problems in gambling and do not really go to the heart of one of the issues that is growing in importance across the country. There is evidence that match fixing is going on with a view to gain, which is something that we must act on. The laws that we currently have do not deal with this problem. We were not able to make changes in this rather tightly drawn Bill, but I think and hope that the arguments have been heard. If we do come back to it, it will at least be on the basis of a very much better understanding of the issues, which we have gained in our very good debates in recent months.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

My Lords, I am grateful to the noble Lord, Lord Browne, for discussing his amendment with me earlier today, which I certainly found helpful. As the noble Lord said, this amendment seeks to delay the commencement of the repeal of Section 331 of the Gambling Act 2005 until the Government have reported to Parliament on the outcome of ongoing reviews into gambling.

First, I will be very clear about this. Clause 2 of the Bill is not about liberalisation of remote gambling advertising. It is a regulatory measure, and I will explain to your Lordships why I believe it is very necessary. The effect of Clause 2 is that, for the first time, remote gambling operators based in EEA or white-list states will be able to advertise and offer remote gambling to British consumers only if they are regulated by the Gambling Commission. At present, remote gambling operators based in EEA or white-list countries may advertise and offer remote gambling to British consumers without the need for a remote operating licence from the Gambling Commission, regardless of the quality of their home regulation.

The noble Lord, Lord Browne, has expressed concern about a potential increase in the overall volume of gambling advertising as a result of the Bill. I reassure noble Lords that the existing television scheduling restrictions will significantly limit the potential for any increase in the volume of advertising. As a consequence of the Bill, all gambling advertising will be subject to the regulatory rigour of the Gambling Commission and the Advertising Standards Authority, ensuring consistent standards across the piece. This is a significant development that will extend regulatory control over the type of advertising that may be shown in Great Britain.

As a result of the Bill, new gambling operators that wish to advertise in Britain will need to comply with the advertising codes of practice. These codes put in place strict controls in relation to gambling advertising and children: for example, advertisements must not appeal to, or include, children and young people and they must not glamorise gambling or suggest it as a solution to financial concerns. Advertisements that breach the code have to be amended or withdrawn. In addition, the Gambling Commission’s code of practice provides that operators must adhere to the advertising codes and ensure that all gambling advertising is undertaken in a socially responsible manner. Failure to take account of this can be used as evidence in criminal or civil proceedings, and may be taken into account by the commission in a review of the operator’s licence.

Indeed, earlier this month, the Advertising Standards Authority used powers under the advertising codes to take interim action against an operator following an unprecedented number of complaints. In this case, the Advertising Standards Authority judged that the advertisement may have been seriously prejudicial to the general public on the ground of the likely serious offence it may have caused. However, because the operator concerned is based outside Great Britain, the Advertising Standards Authority could apply its ruling only to national print media and not the operator’s website. Once operators are licensed under the new arrangements, regulatory action could be taken by the Gambling Commission.

To postpone commencement of the Bill until the end of this year, when the Government will be reporting on the outcome of ongoing advertising work, would delay the considerable benefits to consumers that the Bill will bring. It would undermine the achievement of the consumer protection purposes of the Bill, not just in respect of advertising but more widely. The noble Lords, Lord Browne and Lord Stevenson, and the noble Baroness, Lady Howe, raised, quite rightly, the aspect of vulnerable people. The Bill requires operators to comply with Gambling Commission licence conditions specifically protecting children and vulnerable adults; for example, in relation to self-exclusion and other requirements to support consumers who experience problems. Having looked at this very thoroughly since my meeting with the noble Lord this morning, on reflection I believe that delay is simply not in the interests of British-based consumers.

I made it clear on Report, in reply to the amendment in the name of the noble Baroness, Lady Jones, about the Government’s intent, that the review of the existing advertising arrangements is under way. The noble Lord, Lord Stevenson, referred rightly to the changing landscape that we have seen following the Gambling Act 2005. I confirm that the findings will be available in the autumn. This work will be taken forward by the Gambling Commission, the Advertising Standards Authority, the committees of advertising practice and the Remote Gambling Association. Clearly, it would be wrong to prejudge the outcome of the reviews, but I can assure noble Lords that they will be comprehensive and will seek to determine what changes might be necessary to ensure adequate protection.

I can also confirm that there will be opportunities for interested parties to make representations as the reviews progress. The Advertising Standards Authority is open to hearing from interested parties about any aspect of its regulatory work and will take into account any relevant representations it receives as it undertakes its review, the full terms of reference for which are being developed and will be published in the spring—I am led to believe that spring in this case means April.

The noble Lords, Lord Browne and Lord Stevenson, spoke about the timing. It is absolutely right that noble Lords should put the fire where it is intended, which is on the point that we want progress. The four reports are due in the autumn. The reason for the Government saying that we will confirm our position by the end of the year is that we want to have a thorough look at what the reviews come forward with, so that we can consider the appropriate response to them. That is why there is no ducking and weaving; this is about doing a proper job on this matter, and it is why we will confirm our position by the end of the year. We will deposit in the Libraries the summary of the findings and the Government’s response.

I do not believe that we should delay commencement of this Bill, because there are important benefits for the consumer. As I have said, this Bill is not about liberalisation of remote gambling advertising; it is about making sure that everyone has the due protection that we think they should have. It is for those reasons that I ask the noble Lord to withdraw his amendment.

As we have, I think, reached the final stage of the Bill—I do not think that the officials would like me to say the final fence or the finishing post, but perhaps I can as it is the Year of the Horse—I want to thank your Lordships for the work that we have undertaken together. From all parts of the House, we have had many opportunities to discuss matters of concern and interest relating to gambling. We have covered much ground. I hope that my noble friend Lady Jolly and I have been of assistance to your Lordships. We have listened—I was very grateful for what the noble Baroness, Lady Howe, said about listening—and I hope that we have set out the Government’s response as to the action that we will take to address the concerns that have been raised in this House. My particular thanks, however, must go to the officials, who have guided us both through the intricacies of the Bill and, more generally, on gambling. I have learnt a great deal from them and from your Lordships. The officials’ professionalism has been outstanding and, for that, I am most grateful.

I hope that the noble Lord will withdraw his amendment.

Photo of Lord Browne of Belmont Lord Browne of Belmont DUP 4:00 pm, 18th March 2014

My Lords, I am grateful to all noble Lords who have participated in this debate, and I am pleased that the Public Bill Office gave me the opportunity to raise this amendment.

I have listened carefully to everything that the Minister has had to say. I would first stress that I fully understand that this Bill does not extend the freedom to advertise to all jurisdictions on the basis of the current arrangement with the EEA and white-listed jurisdictions. Under the new proposals, all providers will be required to get a Gambling Commission licence, which I welcome. My point is that, because the Government have selected an approach that uses the offer of advertising to extend regulation, the extension of regulation must also bring an extension of advertising—advertising for a form of gambling with a higher problem-prevalence figure than gambling generally.

I am also slightly concerned by the implication that the Minister does not think the new Bill will necessarily result in an increase in the advertising of online gambling. Of course, I understand that there are not online gambling providers in every jurisdiction in the world who want to access the UK market, just as there are not online gambling providers in every EEA jurisdiction that wish to access it under current arrangements. However, given the current realities of the global gambling market, it seems that the only way the Bill could not result in a significant increase in advertising would be on the basis of providers accessing the UK market without a licence. That is frightening and demonstrates very clearly why the noble Baroness, Lady Howe, was absolutely right to press for financial transaction blocking.

I am disappointed that the Minister did not commit to ensure that the regulatory regime with respect to current advertising and new advertising resulting from this Bill will be deployed more actively, in order significantly to reduce the former and to limit the latter, so that the combined effect of both the continuation of advertising in the current context plus the new advertising facilitated by this Bill does not have the effect of introducing a net increase in the amount of gambling. I believe that he should have either undertaken to accept my amendment or committed to tighten the regulatory framework significantly. Without having taken either of those steps, the comments of the Secretary of State on 2 March are at odds with the impact of the Bill.

However, today I sought to put down a marker and possibly highlight a contradiction in the Government’s position. I look forward to the four independent reports and I am sure that I will make submissions to those. I hope that that they will come along with my way of thinking. I beg leave to withdraw my amendment.

Amendment 2 withdrawn.

Bill passed and returned to the Commons with an amendment.