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Clause 40
Chain-gift schemes
Amendment made: No. 158, in clause 40, page 18, line 40, at end add— '() In the application of subsection (4) to Scotland the reference to 51 weeks shall have effect as a reference to six months.'.— [Mr. Caborn.]
Question proposed, That the clause, as amended, stand part of the Bill.
Mr. Page: As background, because the then relevant Minister was indisposed, I had to move the Third Reading of the Bill that became the Trading Schemes Act 1996, which included proposals on the chain-gift scheme. I seek clarification on how the clause interrelates with that Act, and on whether legislation already covers any proposed offence. We must leave aside the fact that the drafting that covers the chain-gift scheme seems to be open to abuse. For example, it seems that one could avoid prosecution—under clause 3(a), which refers to section 6—if one were to offer a small gift in return for payment.
Obviously, the avowed intent of the 1996 Act was to deduce a widening of the definition of goods to
''property of any description and a right to, or interest in, property''.
Guidance on that Act on the Department of Trade and Industry website states:
''Goods include the rights to property of any kind. This means that schemes which do little more than circulate money between the members of the scheme are subject to the controls.''
The guidance goes on to say:
''In a legitimate trading scheme, payments are linked essentially to genuine selling of goods or services to end users.''
I assume that the reasoning behind the clause is driven by the various scams that have taken place, such as the ''Women Empowering Women'' scam. The DTI eventually got around to putting out advice that the original ''Women Empowering Women'' scam
''does not appear to contravene current UK legislation on pyramid schemes or multi level marketing because it does not involve any trading of products or services nor any form of company structure or control.''
That seems directly to contravene the paragraph that I have just quoted about the amended definition of goods. May I persuade the Minister simply to compare the clause with the 1996 Act and to conclude whether the proposed offences are already offences under the Act? I am sure that he has the answer at his fingertips,
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but in order to speed things up, and as he is a reasonable person, perhaps he will consider the matter and, if appropriate, table some amendments later.
10.30 am
Mr. Caborn: We do not believe that there is any overlap. We would not need the clause if the current laws were adequate. Its purpose is to put it beyond any doubt that the type of pyramid selling that the hon. Gentleman describes is banned. We hope that we will see an end to chain gifting. We gave clear assurances on the Floor of the House about that. The clause is drafted in a way that covers all eventualities. I hear what the hon. Gentleman says, and if we need to reinforce the wording I will return with further amendments. There is no disagreement between us on the end objective, and we believe that we have achieved that, but we will review it in light of what has been said in Committee.
Question put and agreed to.
Clause 40, as amended, ordered to stand part of the Bill.
Clause 41
Provision of unlawful facilities abroad
Mr. Moss: I beg to move amendment No. 151, in clause 41, page 19, line 3, leave out 'a' and insert
'— (a) the United States of America, and (b) any other'.
The Chairman: With this it will be convenient to consider amendment No. 143,
in clause 41, page 19, line 6, at end add—
'(4) The Secretary of State shall publish and lay before Parliament a statement setting out the criteria by which a country or place will be designated a prohibited territory.'.
Mr. Moss: The clause provides that a person commits an offence if he does anything in Great Britain, including using remote gambling equipment, to enable a person in a prohibited territory to participate in remote gambling. There is currently no restriction regarding the way in which the Secretary of State can use this power or how she can distinguish between different prohibited territories. Given that an order can also prescribe maximum penalties, including possible imprisonment, the means of making such an order should be as transparent as possible. It is important that concessions are not granted to territories that could have the potential to circumvent other aspects of UK policy, particularly in relation to casinos. Amendment Nos. 143 and 151 seek to ensure that a clear policy statement is laid before Parliament and that, at a minimum, a person in the USA is prohibited from participating in remote gambling at this time. Clearly other countries that could result in market distortion could be added in accordance with agreed policy.
Mr. Caborn: I sympathise with the principle behind amendment No. 143. I agree that we must be transparent in our decision making, and that other states must be clear about the framework within which
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the British gambling industry operates. However, the amendment risks restricting the Government's flexibility in meeting the demands of the rapidly evolving gambling environment. The criteria for prohibiting a particular territory must be able to evolve as quickly as that environment. The Secretary of State may need to consider matters as diverse as the global market, international agreements and religious and cultural issues. She must be able to move quickly to meet new concerns not set out in the existing criteria. It may not be possible to anticipate every circumstance in which a decision has to be made, so it may not be possible to give an exhaustive description of the criteria.
Amendment No. 151 is less easy to sympathise with. The Government believe in the principles of free trade, and those principles apply equally to a properly regulated gambling industry as to any other. The United States Government have sought to limit their citizens' access to non-US gambling sites. That is a matter for that Government. I see no reason for this Government to legislate on the issue. We have maintained that it is for gambling operators to decide whether they accept customers from countries where particular forms of gambling are prohibited. Some operators have decided not to accept customers from the United States; others continue to do so. This is a commercial decision for operators. I therefore urge the hon. Gentleman to withdraw the amendment.
Mr. Moss: I am grateful to the Minister for his explanation. He rightly pointed out that remote gambling is an offence in the US. However, its jurisdiction would not apply to businesses located in our country which run remote gambling, so why cannot the Bill state that it is an offence to trade with punters from the US?
Mr. Caborn: That has confused me a little, but I think I understand what the hon. Gentleman is saying. It is not an offence. We believe in the free market; it is not us but the US that is restricting it. It is up to operators here to decide whether to accept bets from the US; that is a commercial decision for them.
We have a free and well regulated environment, so we do not believe that we need to include that type of restriction in the Bill. We believe in a free market in this area, as we do in any other industry. The US has decided to impose restrictions, and operators here have to make a commercial decision whether to accept bets from US punters.
Mr. Moss: That underlines the difficulty of controlling internet gambling. There are different jurisdictions with different laws on it, and it will be hard to exercise the kinds of control that we would like.
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We agree that the Government are going down the right road in encouraging businesses to operate here and be regulated, and that is the true test. In view of the Minister's comments, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 41 ordered to stand part of the Bill.
Clause 42 ordered to stand part of the Bill.
Clause 43
Invitation to gamble
Mr. Moss: I beg to move amendment No. 144, in clause 43, page 19, line 16, after 'he', insert 'intentionally'.
The Chairman: With this it will be convenient to discuss the following amendments: No. 306, in clause 43, page 19, line 16, leave out first 'or'.
No. 307, in clause 43, page 19, line 16, after 'permits', insert 'or enables'.
No. 308, in clause 43, page 19, line 17, after 'gamble', insert
'or colludes with a person conducting such activities'.
No. 145, in clause 43, page 19, line 37, leave out 'with a view to' and insert 'for the purpose of'.
No. 146, in clause 44, page 20, line 22, after 'he', insert 'intentionally'.
Mr. Moss: Amendment No. 144, and the consequential amendment No. 146 to clause 44, seek to strengthen the Bill's wording. The offence in clause 43 seems to be an absolute offence except to the extent that it is limited in subsection (3), which refers to ''intentionally'' bringing to the attention of a child information regarding gambling.
We want to provide an offence that protects those innocent members of the gambling industry who have no intention of inviting a child or young person to gamble. There should be a defence where the inviter uses due care or was unaware, and was not reckless about whether the information had gone to a child or young person. The meaning of ''intentionally'' could be explained further in the code of practice, if necessary.
Amendment No. 145 would make the wording more specific and clear. The clause leaves open to interpretation the phrase ''with a view to''. That could mean allowing for the possibility of, or even specifically encouraging. The amendment's purpose is to avoid any unnecessary ambiguity by specifying that the purpose of bringing information to the attention of a child or young person must have been to encourage them to gamble.
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