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Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018

Volume 794: debated on Tuesday 18 December 2018

Motion to Approve

Moved by

That the draft Regulations laid before the House on 15 November be approved.

Relevant document: 7th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

My Lords, the Government’s response to their wide-ranging consultation on proposals for changes to gaming machines and social responsibility measures, published in May this year, set out a comprehensive package of measures that will strengthen protections around gaming machines, online gambling, gambling advertising and treatment for problem gamblers. The Government made it clear that their intention in the review was to strike a balance between socially responsible growth and the vital endeavour of ensuring that the most vulnerable, including children, remain protected from gambling-related harm.

As noble Lords will know, the headline measure in May was the Government’s decision, following consideration of all relevant evidence, to reduce the maximum stake on sub-category B2 gaming machines from £100 to £2. The decision was met with enthusiasm in many quarters. Local authorities, charities, faith groups, interest groups and academics all submitted opinions in favour of a £2 limit. This House was no exception in expressing its emphatic support for the Government’s intentions. We are here today to discuss and debate the regulations that will give effect to that decision.

Let me turn first to the evidence which led the Government to their conclusions on B2 stakes. Under the Gambling Act 2005, B2 gaming machines have a maximum stake of £100—by far the highest for any gaming machine in Great Britain—and the maximum prize that can be won as a result of a single use is £500. The next-highest limits on the high street are B3 machines, with a maximum stake of £2 and a maximum prize of £500.

Almost 14% of players of B2 machines are problem gamblers, currently the highest rate by gambling activity in England. In addition, the highest proportion of those who contact GamCare, the main treatment provider, identify these machines in betting shops as their main form of gambling. Gaming machines in betting shops also account for one of the highest proportions of all those in treatment for gambling addiction.

In October 2017, the Government published the consultation on proposals for changes to gaming machines and social responsibility measures, which invited views on proposals to reduce the maximum stake for B2 machines. The consultation received more than 7,000 responses and closed in January 2018. The Government published their response on 17 May 2018 and, after giving due consideration to all information and evidence received, they decided that it would be appropriate to reduce the maximum stake for sub-category B2 gaming machines to £2.

In comparison to other gaming machines on the high street, B2 machines are an outlier because of the speed at which it is possible to lose large amounts of money. These machines generate a greater proportion and volume of large-scale losses—for example, more than £500 in a session—and the losses are larger and sessions longer for those who bet at the maximum stake of £100 than for those who play at a lower level.

Even cutting to £10 would have left problem gamblers and those most vulnerable exposed to losses that would cause them and their families significant harm. In particular, the Government noted that more than 170,000 sessions on B2 roulette ended with losses of between £1,000 and £5,000. These sessions persist at average stakes of £5 and £10, but by contrast, none involved average stakes of £2 or below. In addition, the Government considered that the reduction to £2 was more likely to target the greatest proportion of problem gamblers and protect the most vulnerable players, including those in areas of high deprivation.

Having considered these and other factors, the Government concluded that they would reduce the maximum B2 stake to £2. This was supported by the Gambling Commission’s advice that action on B2s should involve a stake limit of between £2 and £30 if it was to have a significant effect on the potential for players to lose large amounts of money in a short time, with any further decrease a matter of judgment for government.

It is fair to say that the date on which these regulations would come into force generated not a little opinion and debate. It was right that those who had strong views and evidence on the issue, including many noble Lords, should have the opportunity to share them. We have said all along that protecting vulnerable consumers is our prime concern, although it has been necessary to take account of the effect that the reduction will have on the gambling industry and those employed by it.

Having conducted the process of engagement with the industry, the Government announced in November that they would implement the stake reduction on 1 April 2019, a date specified in these regulations and which they consider provides sufficient time to allow for relevant changes to be made by industry. Industry has now known about the Government’s intention to reduce stakes to £2 since May this year, and the date announced last month provides further clarity to allow it to continue its preparations.

Noble Lords will also know that the draft Finance Bill was amended so that the increase in remote gaming duty, paid for by online operators, comes into effect in April 2019 alongside the reduction in the stake to cover the negative impact on the public finances and protect vital public services.

I will explain the effect of the draft regulations and the legislative context in which they operate. The Gambling Act 2005 established a new system for the regulation of gambling in Great Britain, with the exception of the National Lottery and spread betting. Section 235(1) of the 2005 Act defines a gaming machine as a,

“machine which is designed or adapted for use by individuals to gamble (whether or not it can also be used for other purposes)”.

The Categories of Gaming Machine Regulations 2007 define four categories of gaming machines, known as categories A, B, C, and D. For the purposes of the 2005 Act, category B machines are divided into sub-categories. These regulations amend the Categories of Gaming Machine Regulations 2007 to reduce the maximum stake permitted for B2 gaming machines from £100 to £2 from, as I said earlier, 1 April 2019. In consequence of this amendment, these regulations also amend the definition of a sub-category B3 gaming machine so that B2 and B3 gaming machines can continue to be distinguished from one another by reference to the different places in which B2 and B3 machines are allowed to be made available.

The regulations also make consequential changes to other secondary legislation, amending the Gaming Machine (Circumstances of Use) Regulations 2007 and revoking the Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015 to remove requirements that no longer apply as a result of the stake reduction.

Millions of people enjoy gambling responsibly, and the Government are committed to supporting a healthy industry, but we need the right balance between freedom and protections. As I have said, the Government’s intention in our wide-ranging gambling review was to strike a balance between socially responsible growth and protecting the most vulnerable, including children, from gambling-related harm.

I want to be very clear that the review and this legislation do not mark the end of government action. We recognise that harm is not about just one product. We will act where there is evidence of harm and we will always keep issues under review, as is our responsibility. We will also continue to work together with colleagues from other departments, such as the Department for Education, to ensure that we are co-ordinated in our approach to young people, and the Department for Health and Social Care, to improve links between gambling treatment and other services. I am proud that the Government are taking forward this decisive measure, and I commend these regulations to the House.

My Lords, having campaigned against fixed-odds betting terminals for many years, I am truly delighted that this statutory instrument is now before us, reducing the maximum stake from £100 to £2. The Minister has laid out some of the reasons why this is so important. I do not intend to repeat them, other than to remind the House that there are 35,000 of these machines in our often poorly supervised betting shops around the country, with more than twice the number in the poorest boroughs of this nation than there are in the more affluent boroughs. It is also worth reflecting that research shows that 80% of fixed-odds betting terminal gamblers exhibit problem gambling behaviour at stakes in excess of a £13 spend.

The Minister has pointed out that the Government now accept that these machines have wrecked lives, torn families apart and caused enormous damage in our communities, but I have to say that the tone of the Minister’s introduction rather implied that the Government had been keen supporters of change in this area for a very long time. The truth is that that has not been the situation. It was back in 2010 in the other place that I first advocated a £2 stake, and my noble friend Lord Clement-Jones introduced legislation in your Lordships’ House in 2015 that sought to have the stake reduced to £2. Since then many people have been campaigning for change, including local government, the Church of England—I pay particular tribute to the right reverend Prelate the Bishop of St Albans—mental health charities, academics and many others. The All-Party Parliamentary Group on Fixed Odds Betting Terminals, very effectively led by Carolyn Harris MP, has played an influential role in persuading the Government—eventually—to act as they did on 17 May this year when they announced the cuts.

All of us having welcomed the Government’s announcement that the stake was to be cut, we were collectively appalled to hear that they were proposing a delay in its implementation until October 2019. Despite accepting that FOBTs were a social blight that harmed individuals and communities, they were proposing to wait 18 months, with further suicides being predicted and more lives to be wrecked. We found it hard to believe that the Government seemed to take so much notice of the bookmakers with all their arguments about how difficult it was to change the machines, how much money the Exchequer was going to lose and how many jobs were going to be lost. The Government seemed to fall for it hook, line and sinker, yet every one of the arguments that were made has now been discredited. To take one example, we know that changing the stake will actually be of huge economic benefit to this country. We know that gambling and problem gambling cost this country a fortune: £1.5 billion to deal with the problems that problem gambling is causing us. We also know that because people will spend less money on fixed-odds betting terminals, that money will be spent in other parts of the economy, which is infinitely more productive in helping the economy to the benefit of a significant amount added to the gross value added.

So the Government have at last changed their mind and of course that is welcome, but let us not forget that that was after months of campaigning after amendments being tabled to the Finance Bill signed by over 100 Members of Parliament, the threatened resignation of 12 Parliamentary Private Secretaries and then, very sadly, the actual resignation of the excellent former Minister for Sport and Civil Society, Tracey Crouch, who deserves great credit for the stance that she took. Only after all that happened did the Government agree to do the right thing and bring the implementation date forward to April 2019.

Despite the absurd process that we have had to go through to see the stake cut delivered, I am genuinely pleased to be welcoming the change that is to take place in April next year, earlier than the Government originally planned. However, since the Government began consulting on fixed-odds betting terminals three years ago, a staggering £3.6 billion has been lost by people in this country, often the poorest in our society. For me and for many others, ending the harm caused by these toxic machines simply cannot come soon enough.

My Lords, I hope that I can bring a certain expertise on this matter to the debate this evening, not because I was professor of gambling studies at Salford University—although I was—but because I go into betting shops, which is probably not true of many noble Lords here. However, I must say that I have never been even faintly tempted to put £2, let alone £100, into one of these infernal machines.

I want to use this occasion to draw attention to three lessons that I think should be learned by different people. First, we should understand that Parliament is partly to blame for this. We should never have introduced the £100 limit. It was under a Government I supported at a time when gambling liberalisation ran away with itself. We would not be here tonight, and many people would not have got into great difficulty, had the Government of the time set a more sensible limit.

The second group of people who ought to learn lessons from this are the bookmakers. I am afraid that I could not disagree more strongly with the noble Lord, Lord Foster, about their lobbying powers. When I came into Parliament 20 years ago, the bookmakers were formidable lobbyists. There were many Members in both Houses whom they were careful to brief very thoroughly with sane arguments. I remember the days of the great Tom Kelly, when he was running the Association of British Bookmakers. He did not use emotional arguments, he used evidence. He put his case strongly and well—and, rightly, we took that into account.

This has been a complete shambles by the bookmakers. I spent some time trying to persuade them that they had to take a more flexible approach and find something acceptable to everyone by way of a stake—and I wasted many hours of my time talking to them because of their sheer greed. I understand the greed because, actually, if you go into the figures—I went deep into the accounts of one leading bookmaker—it was true that they were taking a lot of money from the big bets and that a large share of revenue was coming from the big bets, not the small bets. Still, it was unsustainable, as were its effects.

They should have woken up much earlier—instead of which they went on trying to make as much money as possible for as long as possible and have now found that instead of the half a loaf that they might have had, they have merely a shrivelled, dried-out crust in the shops. We will lose a lot of shops as a result, and some of those who find that an attractive proposition may find, when they look at the high street in a few years’ time, with all the other things that are going on, that those shops which now seem dens of iniquity will stand out as reminders of a more prosperous time on the high streets—but that is just speculation.

The third thing I must say—here I strongly agree with the noble Lord, Lord Foster—is that the mess the Government got into over what date to apply this from was absolutely tragic. They should have sorted this between themselves: the Chancellor, the Culture Secretary and the Sports Minister. Instead, they went to and fro, looking about as wobbly as any Government could and, in the course of it, we lost one of the greatest Sports Ministers we have ever had. Tracey Crouch was a superb Minister. She was irreplaceable, but we have lost her simply as a result of poor government communications, poor policy-making and poor decision-taking.

I hope that, while passing these regulations, we will take those lessons to heart.

My Lords, I join the noble Lords, Lord Lipsey and Lord Foster, in paying tribute to Tracey Crouch. In a previous incarnation, when she first came into the House of Commons, we worked together on a bipartisan, bicameral amendment to the mesothelioma legislation. She showed great courage at the time in defying the Whips and being willing to stand up to say what she believed. I have watched her progress over the distance and have continued to admire her contribution to parliamentary affairs. Like the noble Lords, I regret that she had to resign as a Minister—but it showed a great sense of honour on her part, which is something that all of us would wish to see recaptured in the way that we conduct our politics.

The noble Lord, Lord Foster, talked about the disproportionate effect that these gambling arrangements can have in impoverished and deprived neighbourhoods. A few years ago, the Merseyside directors of public health funded research into problem gambling, and fixed-odds betting terminals in particular. The outcome of that research was published in 2014 and makes sober reading. It reported that problem gambling not only deprives individuals of their money but has an impact on their families. They stated:

“Gambling issues affected relationships—they led to mistrust, and caused arguments within the family, or with friends … One respondent said that his wife had described FOBTs as being like ‘the other woman’. Gambling caused problems with respondents’ families when they spent all night on the fruit machine, ignoring family etc … Gambling can lead to problems with sleep, due to anxiety, or to people being distracted whilst trying to carry out other tasks ... Gambling has a ‘ripple’ effect, and one person’s gambling problems can impact upon a lot of people”.

This research was published more than four years ago, so the change we are debating today is welcome—if too late for many who have struggled with their use of FOBTs.

Only a week ago, the same collaborative group reported that in Cheshire and Merseyside alone there are more than 5,000 problem gamblers. Respondents across the Liverpool city region reported a wide range of negative impacts from problem gambling, including, again, impact on family life, relationships and employment, and on personal and family finances. The report said:

“Problem gambling can lead to mental health problems … Staff who worked with people who had problems with gambling reported that their families were at risk of anxiety and depression”.

This is not a localised problem. As a one-time Northern Ireland spokesman in the House of Commons, I am particularly concerned that, when the maximum stake is reduced from £100 to £2 next April in England, Wales and Scotland, no such imperative will apply in Northern Ireland. This is particularly worrying given that the problem gambling prevalence figures in Northern Ireland are higher than those in the rest of the United Kingdom. I know that the £2 stake was on the agenda of the Northern Ireland Assembly—indeed, I understand that the noble Lord, Lord Morrow, who is unable to be here this evening, tabled the Long Title of a Bill to address that matter in Stormont.

In the absence of a functioning Assembly, I commend Ladbrokes—perhaps chastened after paying out £975,000 to victims of a gambling addict in a case that was not reported to the Gambling Commission. It has announced that it will voluntarily reduce the maximum stake in Northern Ireland to £2 from April. In this instance, Ladbrokes has done the right thing, and I wonder whether the Minister will join me in calling on all other gambling providers in Northern Ireland to do the same and to reduce their maximum stake from £100 to £2 in Northern Ireland from April. In putting this matter to the noble Viscount, Lord Younger of Leckie, I completely appreciate that, as this is a devolved matter, it is not his direct responsibility. I know that he cannot legislate; I am simply asking him to affirm what Ladbrokes has done and join me in calling on other gambling providers in Northern Ireland to follow that example.

When these regulations were debated in the other place yesterday, the Minister said:

“Let me be clear: the review and legislation do not mark the end of Government action”.—[Official Report, Commons, Delegated Legislation Committee; cols. 5-6.]

I am reassured by that and hope that the noble Viscount will set out today what other actions the Government are taking to support problem gamblers in betting shops. I know that local authorities have wanted powers to restrict the number of betting shops on the high street, especially in deprived areas that have been referred to, as there is evidence that that is exactly where they are placed by companies. I am disappointed that the Government do not support additional powers for local authorities in their planning decisions.

Earlier in the year, in the Government’s proposals on FOBTs and wider social responsibility measures, they stated that,

“the bookmaking sector, and indeed the wider industry, has provided little evidence that self-regulatory measures introduced since 2013 have made any significant impact on the rates of problem gambling or on the degree of harm experienced by individuals”.

In December 2016, a review of the self-exclusion scheme for betting shops was published. It found that the position of the machines in the betting shops made it difficult for staff to realise that a person who had self-excluded was using the machines. The evaluation recommended reforming the system so that self-exclusion would rely on membership cards or electronic IDs, which could be used on the FOBTs.

A further report, published by GambleAware last year, was also critical of the industry-led responsible gambling initiatives. Commenting on its publication, GambleAware said that it showed that the gambling industry as a whole is,

“poor at giving staff suitable training in how to promote safe gambling amongst customers. The report also revealed customers felt existing responsible gambling messages are often confusing and unclear”.

I know that these comments were made before the Government’s report was published in May. Will the Minister give an update on how the industry is dealing with this poor track record and on the implementation of self-exclusion measures in betting shops?

When the Secondary Legislation Scrutiny Committee, Sub-Committee B, published its report into the regulations on 29 November, it said that:

“Given the costs, both financial and societal, with problem gambling, the House may wish to ask the Minister what steps the Government are taking to reduce harmful gambling across the UK, and what work is being undertaken to improve the availability of data so that any policy initiatives can be accurately evaluated”.

Noble Lords will recall that this House debated gambling addiction only a few weeks ago and a number of us took part. Just last week, the Gambling Commission launched a consultation on a new national strategy to reduce gambling harms. That is very welcome and I will review the document carefully, along with others. I know that there will be a focus on children and young people, and that is much needed. The latest data showed that the problem gambling rate among 11 to 16 year-olds in Great Britain is 1.7%, with 2.2% at risk of problem gambling, whereas the national rate is around 0.7%.

Part of the Gambling Commission consultation will be on a change to the licensing requirement so that money given by licensees for research and support must go to commission-approved organisations. Clearly there is a need for these funds to be used effectively, but this change does not address the fact that they are voluntary. I raised this point in your Lordships’ House on 30 October and I raise it again today. This change to the licensing conditions, although welcome, is tinkering around the edges and is not addressing the fundamental issue. The Minister who dealt with that debate said, in an Oral Question on gambling advertising on 12 September, that if the Government thought there were not enough funds being raised through the voluntary arrangement, they would legislate for a statutory levy. How much money do the Government consider “enough”? On what basis do they calculate that and how much is being raised in practice? I look forward to the noble Viscount’s reply.

My Lords, I am very glad to be here today and wholeheartedly support the Government’s proposal to reduce the stake for B2 machines—fixed-odds betting terminals, or FOBTs—from £100 to £2. This is an overdue acknowledgement that these gaming machines have caused significant harm to some. I too pay tribute to the noble Lord, Lord Clement-Jones, whose Gambling (Categorisation and Use of B2 Gaming Machines) Bill provided the House with a legitimate mechanism for reducing the maximum stake from £100 to £2. I was delighted to support it when it was debated on 11 March 2016.

I recognise that many people enjoy gambling, but it is the Government’s responsibility to meet the three objectives of the Gambling Act 2005, one of which is to protect children and other vulnerable persons from being harmed or exploited by gambling. There is no statutory objective to encourage industry growth. That is for the businesses involved to achieve.

In September 2017, the Lancet published a key editorial with the title, “Problem gambling is a public health concern”. It said that:

“Those harms are not confined to individual or family tragedies, but touch communities and society with direct consequences for mental health, crime, and the very composition of Britain’s bookmaker-dense high streets”.

In May of this year, the Government recognised the harms of problem gambling as a “health issue”. There has been considerable concern about the problem-gambling rate associated with FOBTs and rightly so. In the most recent figures on gambling behaviour across England, Wales and Scotland in 2016, released in September 2018, 3% of the population—5% of men—gambled on machines in bookmakers. However, problem-gambling prevalence rates were the highest among FOBT users who had gambled during the past year, at 13.7%. The rate of overall problem gambling was estimated to be 0.7%.

The Government are certainly to be congratulated on taking this step to protect individuals who have been using FOBTs, but this is no time for complacency. The Lancet editorial also said that:

“Less publicised is the growth of online gambling, with a potentially greater danger to health than other forms of gambling, particularly for those younger than 16 years of age”.

Online gambling remains a big concern and, according to the latest Gambling Commission figures, the remote sector makes up 37.1% of the gambling market. With the prevalence of mobile technology, this should not be a surprise. Gambling Commission figures from June 2018 show that 53% of online gamblers gambled using a mobile phone or tablet in the previous four weeks.

With the increase in online gambling, it is unsurprising that there has been a gradual increase in the number of callers to the national gambling helpline who disclose issues with online gambling, rising from 47% of callers in 2014-15 to 55% in 2017-18. The problem gambling data that I have already referred to shows a rate of 9.2% for online gambling on slots, casino or bingo games. I know that the Government are not unaware of the situation. When they set out their plans for FOBTs in May this year, they included a whole section on online gambling. The Gambling Commission has published its own review of online gambling and has just completed a consultation on whether to increase age verification before anyone is able to gamble online. I hope that the next version of the licensing code will bring those changes into effect.

Today, we are voting to support restrictions on stakes for gambling in betting shops on the high street. The review of online gambling noted that:

“There are no restrictions in online gambling on stakes and prizes or speed of play, and by definition online gambling is not restricted to premises”.

While we are enacting restrictions offline there are none online. A person cannot use a credit card in a betting shop but can gamble online with borrowed money. Betting shops have fixed opening hours. A person wanting to gamble on their phone in the middle of the night can do so, even though this is the time when problem gamblers are especially vulnerable.

There is no doubt that the commission is taking action to increase the social responsibility measures that apply to licensed gambling websites and that is very welcome. Noble Lords may recall that I raised significant concerns during the debates on the then Gambling Bill in 2013-14 about how enforcement would work for any unlicensed gambling websites that are operating in the UK. I proposed statutory powers for blocking the financial transactions of websites that do operate without a licence. The Government said that this was unnecessary as voluntary arrangements would suffice. During last year’s debate on gambling on 23 November 2017, led by the noble Lord, Lord Browne, I asked for updated figures on financial transfer blocking for unlicensed websites. In subsequent correspondence, the Minister said that:

“The Gambling Commission has committed to provide a regular update on the figures”,

and would publish the information on its website. I would be grateful for an update on when this information will be available.

In 2014, I joined the noble Lord, Lord Browne, in urging the Government to introduce a one-stop shop for online gambling self-exclusions. I welcome that GameStop has started its rollout, but I am extremely disappointed that it has taken four years to implement a multi-exclusion scheme for online gambling. I hope that the Minister will give the House an update on progress. As of June 2018, the Gambling Commission reported that only 51% of gamblers are aware of self-exclusion. I hope that the Minister will be able to assure us that the Government’s White Paper on online harm will include measures to address these matters in order to reduce the harm from gambling online.

My Lords, it is important that someone from this side of the House says very clearly to the Minister—and I am sorry that it is this Minister to whom I have to say it—that one is really ashamed of the Government over the time they have taken to do what was clearly necessary. One only has to think what would have happened if the Government had agreed to double the stake. The gambling companies would have changed those machines as rapidly as you could think—they would have done it just like that. Yet the Government were taken in by people who told them that they could not do it in time. The second thing that the Government did was to make it perfectly clear that they were happy to go on raising money from the poorest and most deprived sections of our community in order to safeguard the public finances; and that until they had got their new system into operation, they were prepared to go on taking that money, when they could have put it right so much more quickly.

Like so many others, I am very sad at the loss of Tracey Crouch as a Minister. I am even sadder that the Government, having understood the seriousness of this particular form of gambling, managed to pretend that they had to spend months putting it into operation. Even today, we are supposed to be supporting something that does not come into operation until April. So it has taken them a year to do something that could have been done in two months, and something that would have been done by the industry in two months if it had been to their advantage. Somebody from this side has got to say that this is not the Government’s finest hour. Indeed, it is, for me, one of the saddest moments to see a Government who recognise the problem but then spend this sort of time trying to put it right.

I support the noble Baroness, Lady Howe, who has rightly said that this is only the beginning of what we dealing with. We saw a couple of months ago the outrageous picture of the woman who runs one of our biggest online gambling organisations paying herself more than a quarter of a billion pounds as a year’s salary. That is a disgraceful situation. Here is somebody who has paid herself a quarter of a billion pounds, much of which has been earned on the backs of the most vulnerable people in our society. That leads me to be very concerned about the noble Viscount’s comments about getting a balance. I find this “balance” a pretty peculiar concept. I do not want to stop people gambling if that is what they want to do. What I want to do is to return to a situation in which you have positively to decide and go through a series of hoops to get yourself into a position to gamble and then to be restricted in the ability to gamble with money that you do not have.

This is a social evil which we should, as a Government, not be prepared to continue to condone. To use it as a means of shoring up the public finances, and to use that as an excuse, seems to me to be just as ridiculous as the people who answered my tweet when I dared to suggest that this good lady had behaved very badly. They said, “Ah, but she is the biggest employer in Stoke-on-Trent, and therefore that excuses the fact that she has paid herself this money and made that kind of profit”. I am sorry, but I have to say to my noble friend the Minister that it does not excuse it. It is about time that we really did say the following about the gambling industry. First, it cannot be trusted to look after and control itself. That is a point that the noble Lord, Lord Alton, rightly made. Secondly, it is very difficult to see that its contribution to the society in which we live is anything but evanescent. It is a pretty difficult contribution to capture. As the noble Lord, Lord Foster, suggested, money spent on gambling is not going to disappear if it is not spent on gambling: it is there and can be spent on other and much more useful things in society.

I am not a puritan at all, and the noble Lord who is going to answer for the Opposition knows perfectly well that I find the puritanism that still exists in this society not terribly attractive. I am, however, a practical person who looks at what gambling does to people, sees what the damage and the cost to society are and therefore laments the pathetic pace at which the Government have proceeded to deal with the things that need to be dealt with. I just hope that my noble friend will take back to his department the fact that people on his own side, as well as others, really feel that action is urgent. We have known about online gambling for years and we are still talking about it. We still have people taking money away from the poorest in the most despicable circumstances and we do nothing. I am glad that the Government have brought this forward, but it is about 10 months too late and it has been forced on the Government. It is not a happy moment for the Minister or for those of us who believe that we have to take stronger measures more rapidly. We will continue with this until the Government step up to the mark and recognise that improved public health and public good will result from proper, timely, urgent and widespread action on what has become one of the social evils of our time.

My Lords, like others who have already spoken in this debate, I very much welcome these regulations, which will bring new and welcome protections to people living in Great Britain. It is regrettable indeed that the Government have taken so long to introduce effective legislation to protect the poor and most vulnerable in our society. I simply note that when, in April 2019, the maximum stake on fixed-odds betting terminals falls to £2 in Great Britain, the new legislation will not impact Northern Ireland. Like every other region of the United Kingdom, families in Northern Ireland have been shattered and individual lives have been ruined by the blight of gambling.

I very much regret that the Northern Ireland Assembly is suspended at present. I know that Members of your Lordships’ House will rightly say, “Well then, why doesn’t the Assembly get up tomorrow?” I say on behalf of my colleagues in the Democratic Unionist Party that we would be delighted if the Assembly were to be up and functional tomorrow. However, we need to lay clearly before your Lordships’ House that the intransigence of one party alone in Northern Ireland—Sinn Féin—is the reason why the Assembly is not functioning. To members of that party, it seems that an Irish language Act is more important than providing a health service capable of looking after the health of people, education for our children or adequate services or protection for the most weak and vulnerable members of our society, which these regulations would provide. I know that if the Assembly were operating, it would be addressing the matter before your Lordships’ House. It is time that Sinn Féin moved away from its childish activity and allowed the Assembly to function again. Indeed, my noble friend Lord Morrow tabled the Long Title of a Bill in Stormont to address this very matter.

In truth, although these machines currently operate in Northern Ireland, there is a strong legal argument that they are not legal at all under current Northern Ireland legislation—which, incidentally, is the position in the Irish Republic. Like the noble Lord, Lord Alton of Liverpool, I think that in this context Ladbrokes has been wise to announce that it will reduce the maximum stake in Northern Ireland from £100 to £2. I join with him and, I trust, many others in calling on all other gambling providers in Northern Ireland to follow their example. I hope that the Minister, having listened to this debate, will join Members in asking and imploring other gambling providers in Northern Ireland to follow Ladbrokes’ example. That would certainly be in the interest of the people of Northern Ireland, and especially of the most vulnerable people living in our society.

My Lords, it is time to move towards putting this statutory instrument to bed. We have heard a lot of passion, as we might expect on a subject so charged with emotion. My fellow catholic the noble Lord, Lord Deben—we are both catholics, not puritans—expressed views that I have heard certainly on our side of the fence, and others have also spoken with deeply felt emotion.

I found the framework offered by the report from the Secondary Legislation Scrutiny Committee to be a helpful way of approaching this matter. It reminds us of course that the House might just be of interest in this subject—in fact, it was the House, largely, that put the poor Minister in the predicament he finds himself in in the first place. He will of course bat with a straight bat, as we expect him to as a professional, but we know also that he is a man not without deep passion on this matter as well. We are therefore delighted that, at long last, this matter has now reached the point of getting on to the statute book.

We note the matter of money: the gross gambling yield is £1.8 billion, and the impact on the business will be £540 million. But we must remember that the industry has had a long time to consider and to understand that this was going to happen—I would have laid great odds on it recognising it sooner, if I may use my metaphor very carefully. That £540 million is under 30% of the gambling yield, but it could have been phased over several years by an industry that is certainly able to make those calculations. The transition costs are put down as £3.8 million, which is of course nothing at all. There is therefore nothing to stop this thing going forward.

I was in the Gallery in the other place when I heard the Chancellor mention October 2019, and I simply could not believe it, because I believed that in this House we had come to a conclusion that would see government action from April of next year. Let alone asking ourselves whether it could have been sooner—of course it could have—but suddenly to go from April to October like that took me by surprise. I add my voice in expressing regret for the fact that the high price of the loss of a Minister of the integrity of Tracey Crouch had to be endured as a result of that action.

We now look at this matter and ask ourselves where we go next. The committee’s report says:

“The House may wish to ask the Minister how the Government will cooperate with the gambling industry”.

It seems that the Government have co-operated extremely well with the gambling industry and have certainly put its point of view before us again and again. The report also says:

“The House may wish to ask the Minister what steps the Government will take to ensure industry has sufficient advance notice of the increase”.

Once again, the industry has had plenty of notice of the matter before us.

Indeed, when I look at the report before me and I see:

“These benefits accrue via reduced gambling-related harm. It is impossible to accurately quantify these benefits given the data available”—

incidentally, I pass over the split infinitive quite deliberately, not wanting to show myself to be pedantic, but I cannot bear it and so must show myself to be very pedantic. With “given the data available”, regret is expressed that there is not enough data for us to see our way forward. Yet, when I look at the Explanatory Memorandum, I see that in a 2013 consultation the Government felt that they wanted to do certain things then but could not because of what are called “knowledge gaps”, and they asked the industry to be responsible for filling those knowledge gaps way back in 2013. We had a consultative process in October of last year, but that was 2017, was it not?

Therefore, over a long period of time, we have been labouring with an absence of the kind of empirical information that will lead us to an evidence-based set of conclusions, and I feel it necessary to point out that if we have reached where we are now, it is not before time. We can only be glad of the progress that has been made, and I echo the voices that have been raised around the House.

The final question is about the costs, both financial and societal, with problem gambling. I discovered another thing in the impact assessment, right at the top, which we have argued about over the years:

“Gambling-related harm produces several negative externalities including but not limited to: increased healthcare costs, welfare costs, and other costs to individuals associated with problem gamblers (e.g. family, friends and employers)”.

For years, I have been asking that that be seen as a material reason for us taking radical action to get the balance right in the whole way the gambling industry does its work. There are oncosts and society disadvantages that occur. It is a known fact that these harms are produced, and I am glad to see that the impact assessment begins with that fact.

What can we do now that we envisage the future? The right reverend Prelate the Bishop of St Albans has been mentioned; I know that he, with others, is seeking to get a special inquiry into gambling set up. So much is happening piecemeal across the whole range of gambling initiatives; we are tinkering with this here and that there, and perhaps now it is time for us to take a generic look. Perhaps this statutory instrument can be seen as a first blast in a bigger action that could lead to a better understanding and a far better set of regulations for our society at large.

My Lords, I thank all noble Lords for their contributions to this short but important debate, and for the general support for the narrow basis for these regulations from many noble Lords. As the noble Lord, Lord Foster, said, it has been—to put it nicely—rather a long-drawn-out debate on the important area of B2 machines. There has been such consensus about the harm they can do to individuals and communities, which may sometimes obscure the fact that millions of people in this country enjoy gambling safely and responsibly. I will be saying something more about the balance that my noble friend Lord Deben has raised.

I start by paying tribute to Tracey Crouch. I agree with much of the sentiment from across the House today; it is a great disappointment that she decided to resign. She was an effective and hard-working Minister and I have no doubt there will be an opportunity for her to return at some point, although that of course is above my pay grade. I also pay tribute to the right reverend Prelate the Bishop of St Albans, who is not in his place. He has worked tirelessly to raise important issues in this area and I have no doubt that he would have wanted to be here today.

I will answer the questions that have been raised. I reassure the noble Lord, Lord Griffiths, and others that I will also be making a few comments about the future; this is not about just today but about the future as there is still much work to be done.

The noble Lord, Lord Foster of Bath, asked a direct question: why has it taken so long to bring about this change? This question has echoed around the Chamber. I also note what my noble friend Lord Deben said in some sharp comments against this side of the House, which are noted. I have also taken note of the comments of the noble Lord, Lord Lipsey, who put a little of the other side of the argument to imply that the length of time taken to get to this point is not wholly due to—but might have something to do with—the original decision of setting the maximum stake at £100. I do not want to make too much of that point.

I reassure the House that the Government are committed to policy-making that considers all available and relevant evidence. We have consulted widely; we have received thousands of responses and, having considered the evidence, we took decisive action to cut the stake to £2. As I said earlier, I am very proud of the progressive legislation that we are bringing forward today.

The noble Lords, Lord Foster of Bath and Lord Lipsey, asked about the change of date for implementation. We have said all along—as I said earlier as well—that protecting vulnerable consumers is our prime concern, although it was necessary to take account of the effect that this reduction will have on industry and those employed by it or in it. I do not see much sense in going over the ashes. A decision was made; we listened, and we consider that April 2019 allows sufficient time for relevant changes to be made by industry. The draft Finance Bill was also amended so that the increase in the remote gaming duty comes into effect in April 2019 alongside the reduction in the stake.

I will say a little more on this subject because, since the announcement in May, officials have met with the Association of British Bookmakers, and with individual operators. They have also met with the two largest machine manufacturers along with the regulator, the Gambling Commission. Discussions have covered the likely impact on shop closures, job losses, mitigations and the technological changes that will be required. Operators have also had meetings with HM Treasury, Ministers and officials regarding the remote gaming duty. This is where I want to talk about balance because we have to bear in mind that there are a number of jobs involved. We do not agree entirely with these figures; I have said in this Chamber before that more research needs to be done to nail down the precise figures. However, the ABB says that the changes could lead to 4,500 shop closures and 21,000 job losses; there is another side to the argument and it is important to say so.

Other points have been made, notably from the noble Lord, Lord Griffiths, that the industry has known about the Government’s intentions to reduce the stake to £2 since May this year, leaving lots of time to April of next year. The date announced last month provides further clarity to allow it to continue its preparations. We expect the industry to mitigate employment impacts and provide the right support to those affected should it have anticipated any job losses. I reassure the House that officials will continue to work with the industry to ensure that it is prepared for the impacts of a B2 stake limit. This will include mitigating any employment impacts and providing relevant support to individuals affected where there are job losses.

I turn to some comments made by the noble Baroness, Lady Howe, about online gambling; this is an important matter for the Government. Online customer data gives opportunities for operators to identify vulnerable customers and target interventions; they are required to do so under the licence conditions and codes of practice set out by the Gambling Commission. We expect operators to make full use of customer data to prevent harm before it occurs. The Gambling Commission and the Remote Gambling Association have separately published guidance for online operators on best practice for identifying consumers who might be experiencing gambling-related harm and interacting with them.

We will be paying close attention to industry progress in this area and will act if we need to. Where there is evidence that a particular product is causing harm we must and will take action. Gamble Aware is commissioning research into game and product characteristics. The commission consulted on proposed changes to the licence conditions and codes of practice will strengthen age-identity verification. I was in the Chamber when my noble friend Lord Ashton spelled out more detail on the age-verification process; I do not propose to go over that again today. It will also gather evidence on the use of credit cards for online gambling. This is very much work in progress and an important area, as I said.

The noble Lords, Lord Alton of Liverpool, Lord Foster of Bath and Lord Griffiths of Burry Port, alluded to the fair point that B2 machines are often found in areas of high deprivation. That is one of the reasons that the decision was made to bring the £100 limit down to £2. As I said in my opening remarks, the Government considered that this reduction was more likely to target the greatest proportion of problem gamblers and protect the most vulnerable players. Important points have been made and we will continue to look at that.

The noble Lord, Lord Alton, asked about funding available for research, education and treatment. From the voluntary perspective, industry donations are well on track to meet the Gamble Aware targets. We still need more evidence of what is needed and what is effective to inform future funding levels. The review announced initiatives to build evidence, including a Public Health England evidence review. This is very much a cross-government—

On this point, referring to the question asked by the noble Lord, Lord Alton, the Minister is correct to say that the Gamble Aware target is being met, but he will be aware that it is only one of the providers of help and support to people with gambling problems; there are many others which need funding. The reality is that there are 435,000 people in this country with gambling problems. Currently only 2% of them are getting support; clearly more is needed. I hope the Minister will agree.

I agree but I fall back to the point that we still have a considerable amount of research to do. At the moment we are quite content to take the regulatory approach on the voluntary angle. My noble friend Lord Ashton and I continue to keep this under review. If there is a need to legislate, we will have no hesitation in doing so because this is an important area.

The noble Lords, Lord Alton and Lord McCrea, asked whether I agreed with the example of Ladbrokes voluntarily reducing stakes in Northern Ireland. As the House might predict, and as the noble Lord acknowledged, gambling is devolved in Northern Ireland. I cannot comment further except to say that action taken by industry to improve protections and social responsibility measures is very much to be encouraged—

I am sorry to interrupt the noble Lord but might I press him further on commending the decision of Ladbrokes to voluntarily reduce the level of the wagered sum from £100 to £2? Surely it is not unreasonable to say that others in Northern Ireland should do the same; it does not require legislation on the part of the Government to commend that. I do not think it is an unreasonable request to the Minister to think about putting that on the record as a matter of encouragement.

The noble Lord is pushing me. It would be nice to be able to say that but I am not going to be drawn on it. It remains a matter for Northern Ireland to make that decision, and I have gone as far as I wish to go on that point.

However, I promised to talk about the future and I hope to offer some reassurance to the House about the point leading on from this important but rather narrow statutory instrument. We will always need a regulatory system that protects the most vulnerable in our society. The publication of the gambling review did not mark the end of government action. We have an industry regulator with the core responsibility of licensing and regulating gambling to keep it fair, safe and free of crime. We will also work with colleagues from other departments—such as the Department for Education, to ensure that we are co-ordinated in our approach to young people, and the Department of Health and Social Care—to improve links between gambling treatment and other services. We will act where there is evidence of harm, and we will always keep issues under review, as is our responsibility.

Achieving a balance between industry growth and social responsibility needs to be a joint effort between central government, regulators, local councils and gambling companies. As we have discussed, B2 gaming machines are an outlier in the world of high-street gambling because of the speed with which it is possible to lose large sums of money. As I said earlier, there was extensive support for a significant reduction in B2 stakes, and many noble Lords have expressed strong support for the Government’s decision in May.

I mentioned earlier my admiration for the right reverend Prelate the Bishop of St Albans. To reassure the House, I know that he is due to meet my noble friend Lord Ashton and the Minister for Sport and Civil Society, Mims Davies, in the new year to discuss gambling-related issues. I also extend my thanks to my noble friend Lord Chadlington for his continued work in this area. I gather that he has recently held a fruitful meeting with the Secretary of State at the Department for Digital, Culture, Media and Sport, alongside my noble friend Lord Ashton—the ever hard-working Minister—and the Minister for Sport and Civil Society.

I will finish there but will just say that this is an important change. I have listened to the views in the House, going beyond the narrow point of these regulations. We have a chance to make a real difference to the lives of vulnerable people.

Motion agreed.