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18 Mar 2009 : Column 252WH—continued

Any internet company wanting to advertise in the UK might as well go to Antigua and Barbuda, where a different level of regulation applies. I know that because I have seen it myself. The tick box to ensure that users are 18 just says, “Make sure you’re over 18. You must be over 18; tick here.” A UK-registered company based in the UK would have to say, “It is illegal to be under 18”, which is a different approach to ensuring that the user is
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over 18. That is a small example, but it ripples all the way through and shows the different degrees that exist. If I wanted to exploit the public, I would certainly base my operation in Antigua and Barbuda to get exposure to the market, rather than in the UK, Gibraltar or other such places, which must meet high standards.

Does the Minister have a strategy to update legislation relating to the internet? What will he do about the differences in standards across the EU? Does he believe that the Gambling Commission is capable of policing the internet properly? Is it right that online gambling companies based in Austria or other parts of the EU can operate in the UK when UK or Gibraltar-based companies cannot operate there? What assurances can he give that online gambling companies advertising in the UK contribute to RGIT or its successor? I am not sure whether the name has been confirmed yet—

Mr. Greenway: GambleAware.

Mr. Ellwood: Will the Minister examine the relationship between the FSA and the Gambling Commission to ensure that a better relationship is developed on spread betting, which has an appalling 14.7 per cent. of problem gamblers? Finally, will he consider the Conservative proposal for a kitemark on UK-approved sites, so that users will know straight away whether a site plays by the high standards that we expect, and that when they sign on, the seven other people at the virtual table are not in fact all the same person but are genuine players?

Those are the type of standards that we want to introduce. There should be a link between a company’s ability to advertise and the high standards that we expect, so that the many internet companies with which many of us have good relationships are allowed to continue what they are doing, without the threat posed to them by rogue companies that choose to exploit those poor-quality rules.

In conclusion, when Tim Berners-Lee created the world wide web he introduced an invention that has arguably had a bigger impact than John Logie Baird’s television or Marconi’s radio. People of all ages in every corner of the country are exposed through the internet to information or opportunities, many of them financial, which would have seemed unimaginable just 30 years ago. The internet certainly can be a very positive tool, but unless legislation keeps pace with its evolution it can be used as a most efficient and powerful tool to exploit the user.

I hope that the Minister, who is responsible for what happens in just a small slice of the internet spectrum, will acknowledge how far behind legislation is and also how unfair EU legislation is, to allow genuine online gambling companies, which are willing to meet high standards and indeed already meet them to operate in a free but fair competitive market.

10.51 am

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Gerry Sutcliffe): It is indeed a pleasure to serve under your chairmanship Mr. Wilshire.

I want to congratulate the hon. Member for Bromley and Chislehurst (Robert Neill) on introducing the debate and for the spirit in which he did so. I congratulate him on the points that he raised and I will try to respond to
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all the points that hon. Members have raised. As time often runs out on these occasions, if I am not able to address a point made by a hon. Member, I will ensure that I write to them with a detailed response. I can tell the hon. Member for Bath (Mr. Foster) that he will shortly—soon, even—receive a letter with the answers he requires.

It has been an informative debate. The Government take gambling regulation and protection of the public extremely seriously. I am grateful to hon. Members for their comments. This is an issue that I care passionately about. Indeed, today I will be meeting the Association of British Bookmakers to hear its concerns about some of the issues that have been discussed here this morning.

The Gambling Act 2005 was the largest overhaul of gambling regulations in more than 40 years. It ensured that remote gambling was brought firmly within the robust regulatory framework that we had created. Gambling via the internet is still a relatively new phenomenon and one that poses unique regulatory and social policy challenges.

The latest Gambling Commission figures show that 9.7 per cent. of people gambled online between March 2008 and December 2008, compared to 8.8 per cent. of people during 2007. However, when we take out the number of people who participate in the national lottery online, those figures fall to 5.6 per cent. in 2008, compared to 5.2 per cent. in 2007.

The hon. Member for Bromley and Chislehurst asked what is being done to deal with the growth in problem gambling among online gamblers. The Gambling Commission’s 2007 prevalence study, which has already been mentioned today, showed that 7.7 per cent. of people who bet online and 7.3 per cent. of those who play casino or poker games online could be categorised as problem gamblers. However, that 2007 study was the first to include questions relating to online gambling, so the evidence to date that indicates a growth in problem gambling among online gamblers is not certain in that sense.

It has never been possible to say that one particular form of gambling is the cause of problem gambling. The 2007 prevalence study found that, on average, problem gamblers participated in more than six forms of gambling, so we are not talking about just one form of gambling; different types are involved. It thus becomes extremely difficult to single out any particular forms of gambling that are especially related to problem gambling.

The hon. Members for Bath and for Bournemouth, East (Mr. Ellwood) quoted statistics showing the number of online sites involved. They said that there were 6,000 sites. Industry sources tell us that there are 2,381 sites run by 493 companies licensed in 50 jurisdictions worldwide. So there are some discrepancies in the figures that we are using.

Mr. Ellwood: I must make the specific point that those companies are licensed in other countries. Many companies that are based on the internet are not licensed anywhere. That is the point that I think that the hon. Member for Bath (Mr. Foster) and I are trying to make.
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Someone can set up an internet company anywhere in the world, if they can get an internet service provider with access to the world wide web. Those are the companies that are not authorised and that are threatening the good companies that are authorised.

Mr. Sutcliffe: I understand that point. I purely wanted to say that there are disputes about the number of sites involved. None the less, I accept the point that the hon. Gentleman is making. Furthermore, regardless of the number of sites we still need to ensure that funding for research, education and treatment for all problem gamblers is one of our top priorities. I am grateful for the work that has been done by the hon. Member for Ryedale (Mr. Greenway) and for all that he has done in helping us to secure the £15 million that we require over the next three years to ensure that there is comprehensive provision in that area, and I look forward to making announcements about it shortly—just after Easter. Again, I congratulate the hon. Gentleman on all the work that he has done.

Although the Gambling Commission’s figures show that the popularity of online gambling is growing at a relatively steady rate, the issue seems to cause, in equal measure, interest and alarm across the world. As has been said already, just last week the European Parliament adopted a controversial report on the integrity of online gambling, despite concerns and objections from a number of MPs, MEPs and the remote-gambling industry, in respect of the report’s impartiality and factual accuracy. Indeed, we briefed British MEPs on the Government’s position.

I know that hon. Members are aware of the changing landscape of gambling regulation in Europe, which has been brought about by the European Commission’s numerous infringement proceedings against member states that prohibit online gambling from overseas without sufficient justification. As has been said, there is no harmonisation in the regulation of online gambling across the European Union. Gambling was excluded from the scope of the services directive, which means that member states have the latitude to regulate gambling as they see fit, albeit within the parameters of European Community law.

All those issues demonstrate how important it is for us, as a Government, to ensure that we view remote gambling as an international, cross-border activity and that we continue to take steps to maintain the protection of the British public in a technologically fast-paced and ever-changing regulatory environment. That can be achieved in a number of ways. For example, we can provide greater education for consumers and increase their awareness of what to look out for when gambling on sites that may be regulated outside the UK. Protection can also be achieved through increased regulatory standards and enhanced international co-operation, which is something that the Gambling Commission is doing through its work with the Gaming Regulators European Forum and the International Association of Gaming Regulators.

There seemed to be some criticism of the Gambling Commission. My hon. Friend the Member for Norwich, North (Dr. Gibson) raised a point about integrity issues. I have asked the Gambling Commission to examine more closely how it deals with such issues. Integrity is a big
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issue, but there must be a good relationship between sport and the bookmakers. I think that good relationship is evidenced by the number of reports that have been made about betting patterns. None the less, it is an issue that I have taken up with the Gambling Commission and I will report back to hon. Members in due course about the aims that we are trying to achieve and the process involved.

There remains a key role for the Government in keeping our policies and regulations under regular review, to ensure that they continue to be effective in the light of both international and domestic developments. As has been said, we must keep a close eye on developments in Europe, the United States and beyond in respect of how remote gambling is approached and regulated, in order to determine any policy implications for the UK.

There may be more that we can do to put overseas operators that are able to advertise their gambling services in the UK on a more equal footing with British-based operators licensed by the Gambling Commission. As has been pointed out, during the recent debate on the advertising of foreign gambling, I said that I would reflect upon a number of issues, in particular the contributions made by overseas operators towards research, education and treatment for problem gambling in the UK. It is only right that I should look at such issues and concerns, and in the coming months, I intend to set out the process of how we will undertake to ensure that we get a return from those operators.

Like other Members, I would like to see a fairer playing field for British-based operators in Europe. The Government are committed to the principles of freedom of establishment and freedom to provide services that are enshrined in the European Community treaty, and we have been active in supporting the UK gambling industry in recent months. For instance, last year the Minister for Trade, Development and Consumer Affairs and I wrote to Commissioner McCreevy about issues affecting the freedom of UK companies to operate in Europe. My officials have also attended key events in Europe to promote the benefits of the UK system of regulation, including the council working groups dedicated to studying gambling under the French presidency. We will continue to participate actively in European gambling discussions under the Czech presidency and beyond, identifying appropriate opportunities to share the achievements of the UK model with other member states. However, when we are conducting ourselves in Europe, we must be sure that we utilise the most appropriate and effective way to engage with European institutions and other member states, given the political and cultural sensitivities surrounding gambling.

I understand the frustration felt by British businesses that pride themselves on their social responsibility standards but that are unable to offer their services within Europe when other European operators are free to offer their services in the UK. In particular, there is the issue involving Betfair. I understand the frustration felt by Betfair and Ladbrokes, but we looked at the issue very seriously, to try to make sure that it was appropriate for us to intervene. On reflection, it was not appropriate for us to intervene in that way and we had to look at the wider issues affecting gambling in the UK. I know that that is frustrating for hon. Members.

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In the time that is left for the debate, I am not able to give the detailed responses on white-listing procedures that the hon. Member for Bromley and Chislehurst would like, but I will write to him to respond to his questions.

Mr. David Wilshire (in the Chair): Order. I am sorry, Minister, we must move to the next debate, so there is not time for any of that, but I am sure that you will write.

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Community Sports Clubs

11 am

Ms Angela C. Smith (Sheffield, Hillsborough) (Lab): As a fellow member of the Select Committee on Transport, it is a privilege to conduct this debate under your chairmanship, Mr. Wilshire.

The debate is about securing the future viability of our community sports clubs, and it is supported by the Central Council of Physical Recreation, or the CCPR as it is more commonly known, which does a great deal of good work in supporting community sports clubs. [Interruption.]

Mr. David Wilshire (in the Chair): Order. I would be grateful if those leaving the Chamber did so silently.

Ms Smith: Thank you, Mr. Wilshire. There are an estimated 151,000 sports clubs and 8 million sports participants in the UK. As the Minister will know, the work of those clubs is supported by the sterling efforts of 2.6 million volunteers. Their contribution to the health and well-being of our society is recognised by the Government, who have established the promotion of amateur sport as a charitable purpose.

Sports clubs are struggling financially, with 35 per cent. of all clubs reporting a break-even situation in an independent survey conducted only a couple of years ago, and 16 per cent. declaring a deficit. That is despite significant ongoing investment in sports clubs by Sport England, which wants 1 million more people to be participating in sport by 2012-13, and a 25 per cent. reduction in the number of 16-year-olds dropping out of the five key sports. Sport England also wants to secure a measurable increase in people’s satisfaction with their experience of sport.

Those ambitious targets are designed to capitalise on London’s hosting of the Olympics in 2012, which we should all support. The hope is that the 2012 Olympic games will inspire more people to take part in and succeed in sport. Sport England recognises that community sports clubs are critical to creating a world-leading community sports system in this country.

Sport England recognises the importance of the sports club structure and wants to invest in those clubs. We are all aware of that, including the Minister. At the same time, however, clubs are suffering financially, and their viability is being threatened, because of changes to water drainage charges and because of the prices they pay for utility services generally. The changes to water drainage charges are due to a new pricing regime, based on surface water drainage. The water utilities’ interpretation of Ofwat guidance means that sports clubs are charged according to the surface area of their facilities, including roofs and car parks, but also, in many instances, of pitches and playing fields. Many clubs have large surface areas, which results in large bills. The surface water drainage approach often assumes that all of a property’s surface water drains into water companies’ infrastructure, but much of the surface water will drain naturally into soakaways or through permeable surfaces. Of course, grass football and rugby pitches and playing fields are permeable surfaces.

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Mr. Andy Reed (Loughborough) (Lab/Co-op): Does my hon. Friend agree that when we talk about sports clubs in Great Britain, we are often talking about teams? There is a different structure on the continent, where clubs can be much larger, but many of our clubs are just small teams with small committees, for whom those charges are not just an inconvenience, but prohibitive to their existence. I can assure her that not much water drains away from some of the pitches that I play on regularly.

Ms Smith: The evidence from Sheffield Wednesday’s Hillsborough stadium, a year ago, shows that water does not drain away from even professional pitches, never mind many community sports pitches. However, my hon. Friend is absolutely right to note that many sports clubs are very small and often run by groups of parents to support their children. That is a valid and important point.

A rugby club in Cheshire has seen its drainage charges increase from £796 to £4,193.40. The issue has also been raised by sports clubs in my constituency, because it is affecting them to such an extent. United Utilities customers have been worst hit by the increases, although the company has at least announced a one-year moratorium, which means that their sports club customers will be charged at 2007-08 levels this year. However, we need a long-term solution to the problem, because a one-year moratorium will not solve it in the long term.

We need a solution that will resolve the difficulties of all community sports clubs. The starting point for that must surely be to recognise that it is unfair that non-commercial organisations such as community sports clubs should be charged the same as commercial organisations for utility services. To assume otherwise fails to recognise the benefit that non-commercial organisations bring to the wider community. If we believe that principle to be right, we should legislate to create a new category of community building, similar to the arrangements for council tax charges. Buildings such as sports clubs, village halls and churches would then be charged lower fees for services such as water drainage. I feel strongly that the category should apply to other utility services, such as gas and electricity, and I await the Minister’s comments on that issue.

Utility charges are not the only issue concerning community sports clubs, for they also struggle with the cost of Performing Rights Society licences. Sports clubs do not only offer buildings, equipment and other facilities that allow people to participate in sport. They are also social hubs, where music plays a vital role in creating an atmosphere for social intercourse and engagement between members. We all remember the days when major works sports and social clubs created a great atmosphere in which workers could come together after participating in sport. In Stocksbridge, in my constituency, the entire sports structure, which is incredibly impressive, sprang from the works sports and social club.

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