Gambling Bill

Public Bill Committee, 7 December 2004.

Standing Committee B

Gambling Bill

Roger Gale (Conservative, North Thanet)

Good morning, ladies and gentleman. I apologise for the fact that we are, yet again, in Room 12. A state visit is the reason and we must be able to accommodate that.

Will all Committee members and anyone else who enters or leaves the Room be kind enough to be aware that the doors are not self-closing and that they slam, which annoys members of the Committee and its Chairman? The Committee would not wish to annoy its Chairman.

Mark Prisk (Conservative, Hertford and Stortford)

On a point of order, Mr. Gale. It is fair to say that the Committee made good progress last week and I am sure that all hon. Members welcomed that. However, I wish to register my concern and to seek your guidance, because on Friday the Government tabled a number of significant changes to the Bill, including new clauses 16, 17, 18 and, of particular concern, new schedule 2, which extends to six pages. There is some concern, as you will understand, over whether we are to achieve our aim of improving the quality of the legislation through good scrutiny, because there is a danger that we shall have very little time to consider the proposed changes. Pertinent to that is the fact that the essence of a Committee such as this is to understand the concerns of those outside whom the legislation will affect directly. They will not have had time to consider the effects of the changes. I seek your guidance, Mr. Gale, on whether it is appropriate to consider the new provisions at this stage.

Roger Gale (Conservative, North Thanet)

The Chairman always wishes amendments to be tabled in a timely fashion to give Committee members and those outside who have a deep interest in the matter time to consider the nature of the proposals, their content and their possible effect, as the hon. Gentleman said. At the start of our proceedings in Committee, I made it clear that I would not accept manuscript amendments. That is all. So long as amendments tabled by any party are tabled in orderly fashion and printed on the amendment paper, they are available for consideration on reaching the appropriate part of the Bill.

Having said that, I have no means of knowing how much progress we shall make this morning. The Committee will rise at 11.25, as is our practice, and that will give ample opportunity for the usual channels to discuss these matters.

Richard Caborn (Labour, Sheffield Central)

Further to that point of order, Mr. Gale. I apologise to the Committee. We have not had a lot of

time in which to get these amendments and new clauses out. We have done so as quickly as possible and we have consulted the British Beer and Pub Association. Nevertheless, I accept the comments that have been made. The usual channels may agree that it will be convenient to stop a little short of the time allocated to allow for reflection and further debate. I hope that the usual channels will be able to deliver that.

Malcolm Moss (Conservative, North East Cambridgeshire)

Further to that point of order, Mr. Gale. I want to put on the record our gratitude to the Minister for his comments. We made excellent progress last week and we are ahead of the game. We are awaiting what will probably be a considerable number of Government amendments, which we hope to discuss in Committee rather than on Report. We will work with the Government to ensure that the Bill leaves Committee by 16 December, which gives us a little more time to consider the amendments with a little more scrutiny.

Richard Page (Conservative, South West Hertfordshire)

Further to that point of order, Mr. Gale. I find the situation completely and utterly unacceptable. The Government have had years to prepare the Bill. We on the Opposition Benches do not have the resources to examine the new clauses within a time scale that allows us to consult, whereas the Government have had plenty of time to do that. Introducing the amendments at this stage is disgraceful and a mark of the way in which this Government operate. I wish my objection to be registered firmly and strongly.

Roger Gale (Conservative, North Thanet)

The hon. Gentleman has made his point. The Chairman always wishes amendments to be tabled in a timely fashion but, as long as those amendments tabled are in order, as these are, they are available for consideration by the Committee. The hon. Gentleman will have heard the Minister's comments and I hope and expect that the usual channels will work their magic during the break between the morning and afternoon sittings.Clause 219 Gaming machine

Clause 219 - Gaming machine

Mark Prisk (Conservative, Hertford and Stortford)

This is my first speech on the substance of the Bill and I take the opportunity to welcome you to the Chair, Mr. Gale. I will seek your guidance as we continue with our deliberations.

Clause 219, which begins part 10 of the Bill, raises a number of important considerations that I want the Minister to respond to. It is clear that the definition in subsection (1) is significantly different and broader than that in the Gaming Act 1968 which it will replace. I understand why the Government have made that step. Since 1968 there have been a significant number of changes in technology and in the variety of machines on which gaming can be engaged in. One

thinks immediately of computers, but a number of other forms of technology have also come forth since 1968. They include interactive television, with which even now many of us are grappling. I struggle to programme my video recorder, let alone cope with the challenges of interactive television. However, I am told by those from younger generations that such things are indeed the future.

I want to draw to the Committee's attention another concern to which I hope the Minister will be able to respond. When reading the excellent explanatory notes that accompany the Bill, I saw that paragraph 485 on page 84 says:

''The new definition accommodates developments in technology which have taken place since the 1968 Act.''

I have referred to that. The paragraph goes on:

''It also covers a wide range of gambling activities which can take place on a machine, and includes betting on virtual events.''

Therefore, as I understand it, the scope of the definition is related not simply to the technology but to the activity on that technology. It would be helpful if the Minister clarified the scope of those activities, not just the scope of the machines, which are more easily defined and are set out in subsection (2).

My second consideration and concern is the manner in which the definition has been presented. In subsection (1) we are provided with what it is fair to describe as an all-embracing definition. The subsection says:

''a 'gaming machine' means a machine which is designed or adapted for use by individuals to gamble (whether or not it can be used for other purposes).''

There is then a series of exclusions from that wide-ranging definition. For example, the definition excludes a ''domestic'' or, for that matter, a ''dual-use computer''—by which I assume is meant a computer used for domestic and business purposes, although it would be helpful if the Minister confirmed that. It also excludes telephones and other such items, which I shall consider in a moment.

My concern is that by establishing an all-embracing definition and then trying to anticipate exceptions, there is a danger of gaps. There is also a danger of uncertainty in the areas between those elements that have been excluded. I would be appreciative if the Minister explained the reason for defining machines in the way in which the Government have chosen. That is important because, just as we recognise that technology has changed since 1968, this Act will have to respond to future changes. Therefore, there is a danger of uncertainty about what is within the scope of the Bill. I hope that the Minister will enlighten us on that point, technical though it may be.

I turn to some more detailed points that concern me and, I suspect, will concern those affected by the Bill. I draw the Committee's attention to subsection (2)(b), which refers to

''a telephone or other machine for facilitating communication is not a gaming machine by reason only of the fact that it may be used to participate in remote gambling''.

I hope that the Minister will be able to clarify this point, but I assume that the phrase

''other machine for facilitating communication''

relates to interactive television. There may be other technologies, but that is not made clear. I return to my previous point: it is a rather woolly description. Will the Minister set out exactly what the Government understand by

''other machine for facilitating communication''

in that context? That would be very helpful for those following our deliberations.

I turn to subsection (3). I confess that the point is slightly pedantic, and I fully own up to that trait. I am unclear whether all three conditions are required to meet the definition, or whether a combination of each of the individual sub-conditions are required. I shall explain what I mean by that in English. I noticed that where paragraph (b) says ''and'', it implies that both (b) and (c) are required to meet the definition. Do I take it that the end of paragraph (a) should also include the word ''and'', in order to mean that all three are required for the definition to be met? That is quite important because there will be a danger when people are trying to meet the conditions that they will be uncertain whether they need to meet (a), (a) with (b) and (c) or (a), (b) or (c). That is a small point—indeed, ''and'' and ''or'' are small words—but it is important in relation to people's compliance with the legislation.

I wonder whether the Minister would clarify the Government's intention in relation to subsection (4)(e). It states:

'''domestic computer' and 'dual-use' computer shall have the meanings assigned by the Secretary of State in regulations.''

That is a pretty wide power. Given the way in which technology changes, the provision has a large scope—I shall provide an example. As I understand it, television technology such as Sky+ uses a hard drive to store received television signals.

Most of us would understand that the technology of a personal computer and such hard-drive storage equipment, which allows higher services such as interactivity, are one and the same technology. I am unclear whether there is a danger that computers that happen to have a screen and are understood to be a conventional PC may end up being regulated differently to a box with the same hard drive that happens to sit under a television. Indeed, as I understand it—and I am no expert in this field—the computer screen and the television screen may become one and the same. Far be it from me to anticipate how people will endeavour to use their computers and televisions in the future, but there is a danger that the two may be regulated differently.

I would be grateful if the Minister explained the Government's intention with regard to the Secretary of State's making regulations.

Don Foster (Liberal Democrat, Bath)

In detail.

Mark Prisk (Conservative, Hertford and Stortford)

I am grateful to the hon. Gentleman for his support for this narrow, but very significant point.

Alluding back to my concern about wide and woolly definitions, I say to the Committee that subsection (5)(d) states that the regulations made under subsection (4)(e), in particular, make provision by reference to

''the software installed on a computer''.

I am assuming, although one should never do so with legislation, that that is gaming software, because clearly if one took the meaning at face value, the danger would be that, according to the Bill, the Secretary of State could regulate any form of software installed on a computer. I doubt that that is the Government's meaning, intent or purpose, but the Bill says what it says, and I would be grateful if the Minister could confirm whether it is meant to refer only to gaming software. I must inevitably ask him to define what he means by gaming software.

With those thoughts in mind, I look forward to what the Minister has to say. I hope that we will be able to improve the Bill through these deliberations. I am grateful to you, Mr. Gale, for allowing me to contribute to the debate.

Richard Caborn (Labour, Sheffield Central)

The hon. Gentleman shows why we need new legislation: because of the problems of new technology. If the Second Reading debate had concentrated on these matters, which should be of real concern to the public because of the way people can access gambling in this new electronic era, the need for new legislation would have been even clearer. We are talking about the difficulties that we face in ensuring that we future-proof the Bill.

Before I go into the detail, I want to make it clear that we are talking about having a powerful new gambling commission. We will include quite a lot of material in further regulation to clarify a number of points, but I will try to go through each point that the hon. Gentleman has raised. As I say, the definition of a gaming machine is completely new and has been broadly drawn to capture all machines used for gambling. It therefore needs to be future-proofed. This is a major and much-needed reform.

The definition covers virtual betting and gaming by machine, as well as virtual lotteries. That means that machines currently known as fixed-odds betting machines are covered by the new definition. The hon. Gentleman may know that that has been a bone of contention for some time, but at least now we will be able to clarify that in the Bill. Machines currently being offered in reliance on section 21 of the Gaming Act 1968 and section 16 of the Lotteries and Amusements Act 1976 are also covered.

There is no longer a requirement that there be a slot for inserting money into the machine, nor that an element of chance must be generated in the machine. Both those elements of the present definition have lead

to avoidance of gaming machine regulation, and we now wish to ensure that all machines offered for gambling are caught properly as gaming machines.

There are a number of specific exemptions from the definition to remove devices that should not be regulated as gaming machines, even though gambling can take place on them. That does not mean that such equipment will always be outside the scope of the Bill, but simply that it should not be regulated as a gaming machine under part 10; for example, telephones or domestic personal computers are everyday devices that can be used for many activities in life other than accessing internet gambling, so that equipment is carved out from the definition. We will make regulations defining both domestic and dual-use computers. We will ensure, through regulation, that operators do not abuse those exemptions.

Malcolm Moss (Conservative, North East Cambridgeshire)

The Minister raised the issue of domestic and dual-use computers. Subsection (4)(e) states that the Secretary of State may define them in regulations. Subsection (5) states:

''Regulations under subsection (4)(e) may, in particular, make provision by reference to''.

There follows a whole host of things, which were mentioned by my hon. Friend the Member for Hertford and Stortford (Mr. Prisk). Given the wide range of those provisions, including paragraph (e), which refers to ''any other matter'', does that not convey the fact that the Government have not got a clue how they are going to define domestic and dual-use computers? It might be helpful if, while the Minister is on the subject, he could give us some indication of the Government's thinking.

Richard Caborn (Labour, Sheffield Central)

That is the problem that any Government would face, trying to look ahead five years and project how the electronic age will affect any sector or any industry, including the one under discussion. Do we return to the prescriptive role of the 1968 Act, where proposals for everything from increasing the number of slot machines to increasing the amount of prize money must come back to the Floor of the House? Or do we create a new framework, as we are trying to do through a new regulatory authority, which takes the successful provisions of the 1968 Act and puts them into a body that can respond to the ever-moving world in which we live, make sensible decisions and still be accountable to Parliament?

We are trying to create a framework whereby the gambling commission and the Secretary of State can respond to an ever-changing world. If we do not, either the industry will stop growing and developing or a lot of parliamentary time will be absorbed unnecessarily. One tries to project sensibly the powers, and the parameters of those powers, which the gambling commission or the Secretary of State will need, and that is what the wording of the provision is about.

Ann McKechin (Labour, Glasgow Maryhill)

Will the Minister clarify something for the sake of the Committee? I understand that the virtual roulette machines, which are commonly found in betting shops, are one of the most profitable parts of a

bookmaker's business. Someone quoted to me that about one third of William Hill's profits relates directly to those machines. I welcome the Government's intention to regulate them, because they are from where local bookmakers obtain their real profits. It would be helpful if the Minister could provide us with an idea of how large that sector is.

Richard Caborn (Labour, Sheffield Central)

I do not know how large the sector is; all I know is that because of the question, to which I have just referred, about the definition of a fixed-odds betting terminal and what type of machine it is, we had to come to a sensible arrangement. There was a dispute about the definition, and sensibly the Government and the industry came together rather than cause a massive explosion of wall-to-wall FOBTs in betting shops. We did not allow that to happen. We sat down with representatives from the industry and sensibly agreed a formula.

There are more than 20,000 machines; that is what it says on the note before me. We needed new legislation: we could not control FOBTs, and there was an argument about what the machines are and whether one could install a number of them in betting shops. That would have lead to long arguments in court, but we took a sensible approach and came to an agreement with the industry. We said then that we would tackle the matter in the Bill, and that is what this and many other clauses are about.

Richard Page (Conservative, South West Hertfordshire)

Will the Minister address closely the points made by my hon. Friends the Members for North-East Cambridgeshire (Mr. Moss) and for Hertford and Stortford? Subsection (4)(e) enables the Secretary of State through regulation to make provision by reference to a machine's location—whether it is in a house—and its purpose. That provision will give the Secretary of State immense power over our individual lives. Although the Minister says that the power will be made by regulation so the proposal will come back to the House, we know that statutory instruments just go through the House and that there is no ability to debate and amend them. I would be a lot happier if, when the Minister makes further comment and says that ''the Secretary of State may'', he were to include the phrase, ''subject to advice or agreement with the gambling commission.''

Richard Caborn (Labour, Sheffield Central)

If I may, I will go through each subsection. That might be more sensible. If the provisions need to be strengthened, we will consider that in the spirit in which I have just explained the clause and in light of what we hope to achieve.

Other exemptions set out in subsection (2) are intended to allow operators to automate some of their gambling products without opening up loopholes allowing them to offer machine gambling on devices to evade the gaming machine entitlements. For example, lottery ticket vending machines and automated terminals for betting on real events will not become gaming machines under part 10 of the Bill, nor will equipment used by croupiers in casinos for gaming. That includes terminals linked to live table games, which simply offer electronic methods of taking part in a real game of chance. However, wholly automated

gaming equipment, which does not need a person to operate it on behalf of a casino, will be caught in the definition of a gaming machine.

I believe that the clause strikes the right balance between preventing evasion of the gambling regime and allowing certain equipment to fall outside the regime.

Let me go through each of the areas that have been mentioned.

Mark Prisk (Conservative, Hertford and Stortford)

The Minister is steadily working through the arguments, and rightly so. One of my concerns, to which I would like his response, is that, inevitably, technology will adjust and the Government will have to play catch-up. One sees that in other areas of Government; for example, in the taxation system. My concern is that that adds to the sense of uncertainty.

I am aware that the Government need to be able to provide themselves with a degree of flexibility, but the point raised by my hon. Friend the Member for South-West Hertfordshire (Mr. Page) is right: we are giving the Government considerable powers. Does the Minister understand our concern about that? Will he commit to stating for the record the Government's willingness to provide some means of genuine accountability in the future?

Richard Caborn (Labour, Sheffield Central)

On that specific point, the commission already has a duty to give advice to the Secretary of State. That is laid down in clause 25, so there is no need to add that power in part 10. The commission has to give advice to the Secretary of State. The Secretary of State is accountable to Parliament, so there is that link. The Government account to Parliament; we did so yesterday in Question Time and would do if brought before the House on other issues. There are ways of scrutinising the Executive, including a requirement that the commission report to the Executive—to the Secretary of State—as laid down in clause 25. Therefore, the commission will be accountable to Parliament. In making regulations, the commission must have due regard to many of the provisions detailing its powers. I therefore believe that reporting works.

I return to a point made earlier—the problem that we had in deciding the scope of the definition, which is probably close to being the core of the Bill. The definition is deliberately drawn wide. The operators will have to get out of that definition. At the moment, the problem is that the definition is too tight, so there is the potential for abuse. The clause is about having a broad definition; it is also about accountability and it aims to bring clarity to the issue. We will do that by regulation.

Richard Page (Conservative, South West Hertfordshire)

I go along with everything that the Minister says, but does he not accept that, particularly when it comes to subsection (5), the Secretary of State can take decisions and actions without advice from the gambling commission? There is an independence about the position, but we want it linked to the commission's advice and direction. We do not want the Secretary of State to go off and do something to achieve some other end.

Richard Caborn (Labour, Sheffield Central)

Subsection (5) says:

''Regulations under subsection (4)(e) may, in particular, make provision by reference to''.

So, the Secretary of State will have to refer to subsection (4)(e), which refers to domestic and dual-use computers. We are talking about a specific area.

If we want to future-proof the clause, we have to include such wording. If we did not want to future-proof it, we would not include that wording. So the balance of the argument of the pre-legislative scrutiny Committee, of the Budd report and of ''A Safe Bet for Success'' was an attempt to get consensus on how much power we give the Secretary of State and the gambling commission to future-proof regulations and to protect the punter. If one wants to continue down the path of narrowing the definition, there will be consequences.

Richard Page (Conservative, South West Hertfordshire)

We are not trying to disagree with that. We are just trying to make the point that we would like any decision-making process to be coterminous with advice from the gambling commission. A Secretary of State—trustworthy though they all are—should not go roaring ahead in their own direction. I would like the Minister's assurance on that.

Richard Caborn (Labour, Sheffield Central)

The Secretary of State will always look to the gambling commission for advice on gaming machines regulations and there is no need to provide for specific consultation. The commission will be the regulator; it is the expert and it is the body that will advise Government. It will not just advise the Secretary of State but the industry as well. The hon. Gentleman is being a little pedantic and theoretical, which is out of character because he usually takes a more broad-brush and common-sense approach. It is a common-sense approach that one needs, rather than acting like one is in the Oxford debating society. However, that may be because it is Tuesday morning.

I shall go through some of the points raised. On the question of betting on virtual events, the scope of clause 219 is betting, gaming and lotteries. That includes fixed-odds betting terminals, although subsection (2) carves out certain types of activities, as the hon. Gentleman acknowledges. ''Dual use'' means the sort of computers used in business, whether in the office or in legitimate internet cafes. The definition in subsection 2(b) covers interactive television. That has been confirmed with parliamentary counsel. It covers all equipment for communication and we intended the definition to be broad.

The requirements in subsection (3) are cumulative. We do not believe that an additional ''and'' is necessary, but we will confirm that with parliamentary counsel. The powers in subsection 4(e) need to cope with a number of complex scenarios and can cope with digital television.

Mark Prisk (Conservative, Hertford and Stortford)

May I clarify one point? Does the Minister mean that the word ''and'' should be inserted at the end of subsection (3)(a)? In other words, are the three conditions required together? The way that it is written suggests that that is not the case.

Richard Caborn (Labour, Sheffield Central)

No, we do not think that ''and'' is needed, as I said.

With regard to subsection (5)(d), we must be able to take account of computers in public places with dedicated gambling software. That is to make sure that we catch the right sort of computers.

Mark Prisk (Conservative, Hertford and Stortford)

I must confess that I was just double checking and I may have missed the point. Perhaps the Minister would guide me: where in the Bill or the explanatory notes is the term ''dual-use computer''?

Richard Caborn (Labour, Sheffield Central)

Subsection (2)(a).

Mark Prisk (Conservative, Hertford and Stortford)

What does it mean?

Richard Caborn (Labour, Sheffield Central)

It means that the machine is in a public place. The regulations need to cover such matters as whether the machine is in a public place, whether there are links on the computer to gaming sites and whether there are posters advertising gambling. Therefore, the powers must be wide, which is why we have drafted them in such a way.

Mark Prisk (Conservative, Hertford and Stortford)

I am grateful to the Minister for responding to several points, but that last sentence muddied the water. I do not think that he clarified the apparent danger of the distinctive regulation of computers and of interactive television. It being early on Tuesday morning, I may have misheard the last point about posters advertising gaming. I did not quite understand what that meant or its context.

Richard Caborn (Labour, Sheffield Central)

Much of that will be covered in regulations; it will not be in the Bill. We are setting out the scope. There will be many such areas. The means will be defined in regulation. I hear what the hon. Gentleman says, but the definition of dual use is computer use for more than just gambling. When we bring out regulations, a number of those areas will be clarified and I hope that we will be able to communicate that to people so that we can remove some of the uncertainty that he and the industry are concerned about. We believe that we have got right the scope of the Bill and what has been included in it. We believe that the accountability that has been laid out is right. However, we realise that further information is needed. That will be dealt with in regulations, which should remove that uncertainty and provide the clearer definitions that the hon. Gentleman has been asking for.

Mark Prisk (Conservative, Hertford and Stortford)

I do not want to stretch your patience too far, Mr. Gale, but I am still unclear about that last element. I just wanted the Minister to confirm what he said and what it meant. Presumably it is something to do with an indication that the machine has a particular function that is regulated—I am working off the cuff. Will he clarify what he meant by his concluding point in his last but one contribution? I do not understand where that point came in. I am clearer now on the question of dual use, in the sense that we are talking not about domestic versus business, but about whether the use is domestic or public. That has been clarified, but I really did not understand the point that he made two speeches ago, when he wound up by saying

something about the presence of posters advertising the machines. Will he clarify that now or perhaps in due course?

Richard Caborn (Labour, Sheffield Central)

If I may, I will write to the hon. Gentleman and to other members of the Committee about advertising and those definitions. I hope that we have demonstrated that we are trying to take those wider powers and define them in regulations. There will be accountability to the House through the structures that I have outlined. I will write to him on the points that he wants further clarification on.

Nick Hawkins (Conservative, Surrey Heath)

I have been listening to this debate with interest. Will the Minister undertake to write to all members of the Committee and not just to my hon. Friend the Member for Hertford and Stortford, because we are all interested?

Richard Caborn (Labour, Sheffield Central)

Yes.

Question put and agreed to.

Clause 219 ordered to stand part of the Bill.

Clause 220 - Gaming machines: Categories A to D

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 276, in clause 220, page 101, line 45, after 'sub-categories', insert

'including a sub-category dealing with linked machines (as defined in section 228) to be known as Category B*'.

This clause is one of the most important in the Bill. There has already been some discussion—I think that it was under clause 163—relating to the categorisation of the various gaming machines, as that was the first area of the Bill where those issues were raised. The amendment relates to clause 220(2)(a), which states:

''divide Category B into sub-categories''.

I do not want to rehearse the arguments that I will be deploying later in the context of clause 228, which deals with linked machines. This is a consequential amendment that introduces in an earlier place in the Bill the concept that linked machines perhaps ought to be considered differently, whether they are category Bs or any other category, although this amendment is concerned specifically with category B. That would ensure that operators could not move the categories up and down if they were to link different categories either within the same unit or elsewhere.

This consequential amendment introduces the concept of a sub-category if machines, particularly category B machines, are linked in the same premises or elsewhere. It ensures that, if we are to have strict categorisation, we can prevent people from being able to link Cs with Bs, Bs with As and so on, because such practice would undermine the whole concept of categorisation in the first place.

Richard Caborn (Labour, Sheffield Central)

The linking of machines does not affect maximum stakes or prizes. Category B prizes are always the same. The hon. Gentleman is right: we will discuss the matter again when we debate clause 228, and that is probably where clarification will be forthcoming.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to the Minister, and no doubt we will have a fuller discussion about this matter when we discuss clause 228. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Malcolm Moss (Conservative, North East Cambridgeshire)

As I said a moment ago, this is one of the most important clauses in the Bill. In the interpretation of many in the industry, the Government's definition of the various machines leads to an unlevel playing field, unfairness and inconsistency. It is the source of a lot of dissension, unrest and problems in the industry.

Mark Prisk (Conservative, Hertford and Stortford)

I suspect that my hon. Friend will be leading up to this point, because he is very thorough in his preparation, but I and some of my constituents are concerned about the way in which this legislation falls particularly on smaller enterprises. I wonder whether he will allude to that in his remarks.

Malcolm Moss (Conservative, North East Cambridgeshire)

I shall certainly allude to that concern. I intend to go through categories A, B, C and D in that order. My hon. Friend has raised an issue about category D machines, and they will have to wait their turn on the list.

Nick Hawkins (Conservative, Surrey Heath)

I imagine that my hon. Friend will agree with me that one of the biggest concerns about these provisions is the way in which they will affect members of the British Amusement Catering Trades Association. He is aware that I have been working with that association on a voluntary basis more or less throughout my time in Parliament. Does he agree with me that, instead of leaving everything to regulations, it would have been much more helpful to members of BACTA, who operate some of our most popular and successful amusement arcades, if there had been a great deal more guidance in the Bill about how its provisions will operate?

Malcolm Moss (Conservative, North East Cambridgeshire)

My hon. Friend makes an excellent point. That uncertainty is at the heart of the disquiet I mentioned a moment ago, about not only one category of machine but all categories. BACTA is not the only one with concerns; the British Casino Association, the Casino Operators Association and the Bingo Association and no doubt, investors from abroad, particularly the Americans, will be concerned to ensure that the number of category A machines in the Bill is not diluted or changed.

The real problem is that either there has not been enough discussion or the Government have not listened carefully to the points put to them across the board.

I know that the Government's position is one of protection. They are selling the Bill on the basis of protecting the vulnerable and children, reducing the opportunities for ambient gambling and trying to have some control over the whole system. We do not demur from that approach, but it must be even-handed. I have made the point on a number of occasions that any legislation should attempt to deal even-handedly with existing operators and those who expect to get grandfather rights at any level, as well as to encourage new investment of the sort that we have been talking about concerning regional casinos.

The Secretary of State in her evidence to the scrutiny Committee, when asked about her intentions for fixed odd betting terminals—the issue was raised by the hon. Member for Glasgow, Maryhill (Ann McKechin) a moment ago—said that they

''will be treated as gaming machines under the Bill and our intention has been that they should be classified as Category B machines and therefore available in adult gaming centres, bingo clubs and betting traps as well as in betting shops.''

She gave a clear indication that that was the Government's intention at the time. Since then, there has been a massive turnaround and FOBTs will not be allowed into the areas indicated by the Secretary of State to the scrutiny Committee. I shall come to that later, but the indication was given earlier to the industry that an even-handed approach would evolve.

When questioned about comparability, Lord McIntosh said in a speech recently:

''So far as arcades were concerned, their competitive position might have continued to erode.''

He accepted then that the Government's more recent position, particularly in relation to adult gaming centres, is that that sector of the industry is at a disadvantage, particularly with FOBTs, and that its competitive position might have continued to erode. He acknowledged that there is a problem. BACTA certainly told him that there was a problem and that it feels that it is being penalised and discriminated against by the Government's decisions. The noble Lord then said:

''Second, we will be considering the case for using the Gambling Bill to restore the comparability between machines in Adult Gaming Centres and betting shops. There are arguments on both sides, and we want to hear them.''

We can hear them today. We need not wait until the Bill goes to the other place; we can make the argument today for some form of comparability.

Any agreement that has been arrived at between the Government and the Association of British Bookmakers, as the Minister indicated recently in response to the discussion on clause 219, is welcome. A code of conduct has been devised and proper research is being done. I do not subscribe to the view that that research is biased in favour of the betting industry, because it is being financed across a broader

front and independent assessors are being used. A preliminary report has already landed on the Minister's desk and I hope that he will share the findings with us when he responds.

Mark Prisk (Conservative, Hertford and Stortford)

I am listening with fascination to my hon. Friend because he is highlighting one of our central concerns. Will he enlighten us on his view? From what he described, it seems that the Government's position is constantly changing. Does he think that that is deliberate, or does he believe that they are muddling through, which seems to be the case from what he has said?

Malcolm Moss (Conservative, North East Cambridgeshire)

My hon. Friend has got that one right. Do we want the definition of ''muddling through'' to be in the Bill or in regulations? My hon. Friend makes a good point: there is inconsistency between what has been said, what is now happening, and what may happen. That uncertainty is causing concern in the industry.

I return to the position on FOBTs. Research is being conducted, and it is being conducted properly. Its terms of reference were defined by the Government, not by the betting industry. It is being funded by the ABB and the Minister's Department, and it is being conducted by MORI and Europe Economics. We have no problem with any of that.

A code of conduct has been agreed, and in the end common sense prevailed and the Government and the industry decided that a long process of litigation through the courts was in no one's interests, so an agreement was come to. We now have four FOBTs in each bookmakers' premises. The Minister gave us a total of 20,000—I think—across the country.

For the bookmakers, who negotiated that position, that is a profitable enterprise. They are operating under a code of conduct, and research is being done into the effects of having that new form of gaming on their premises. However, there is a broader question. Why should only a particular section of the industry be given FOBTs? Why are they not available across the board, which is what the Secretary of State had suggested, so that bingo halls and adult gaming centres can have them? That issue needs to be addressed.

Lord McIntosh says that the Government have an open mind. The current agreement with the ABB has restricted numbers, which is a good thing in some ways. However, he is also saying that that took place in advance of the Bill and the discussion on it, and he is suggesting that what evolves in the future is up for grabs. The Minister may simply say, ''Well, we will leave that to the gambling commission.'' That would be a total cop-out. The Government have clear views on all sorts of things, including the definition of categories of machines. Why can they not also have a clear vision of where they want the machines to go, rather than simply saying, ''We have had a problem with FOBTs, but we have come to a deal with the ABB: the machines are in betting offices, but we have restricted the number and there is a code of conduct so that is fine''? It is not fine so far as the other players in

this scenario are concerned; they feel that because of that decision they now have a serious uncompetitive edge.

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman has given a detailed and fair analysis of the problem and the current unlevel playing field. However, he said on a number of occasions that it is important for the Government to have a clear position on this issue, but I have failed to hear what his clear position is. Does he believe that FOBTs should be allowed in some of the other establishments to which he has referred?

Malcolm Moss (Conservative, North East Cambridgeshire)

I am happy to address that. There may well be restrictions on the regional casinos, in which case we would have a big pyramid. Who knows, there may well be restrictions for casinos at a lower level, too, if the Government's approach is to have more influence on the development of events, which makes sense. The Government have already demonstrated that approach in their intended restrictions on category D machines, and in the agreement with the ABB—which may be superseded—to have limited numbers of FOBTs in certain locations. I have no problem with that, but why do the Government not simply come to an agreement that certain numbers of those machines can go in other places?

The machines could be restricted to two, four or whatever number, but the Government should have good reason for limiting them. There is nothing to suggest that issues such as problem gambling are arising from the use of FOBTs. The Government have to justify their decision to allow them only in certain locations.

Category A machines—we have already had part of this argument—will only go into regional casinos. The original plan was—well, it was not a plan; it was a free-for-all, the idea being to let the market decide. On more than one occasion, the Secretary of State, the Minister and the Prime Minister said that there might be between 20 and 40 regional casinos. There has been a significant move on the part of the Government, or a climbdown, if one likes to call it that. The Minister saw the light and grabbed it by the scruff of the neck, and delivered on eight, although we wanted four. We cannot really grumble too much about that; it is a significant concession.

Instead of a possible 1,250 category A machines in each of 40 regional casinos—that is 50,000 in total, if my maths has not failed me—there is now the prospect of a total of 10,000 such machines in the limited number of eight regional casinos. The Americans tell us that they want more than that. They say that they will only just scrape by on 1,250 per casino. [Laughter.] The hon. Member for Colchester (Bob Russell) laughs, but the Americans say that in Las Vegas they have 2,000 or more such machines in a casino. They say that if we want an investment of £20 million, or whatever the figure is, in a regional casino complex, along with leisure activities, hotels, theatres, restaurants and so on, that investment will obviously need paying for.

Bob Russell (Liberal Democrat, Colchester)

Can the hon. Gentleman say which European countries have mega-casinos of the size of those proposed in the United Kingdom or of those in Las Vegas, to which he alluded?

Malcolm Moss (Conservative, North East Cambridgeshire)

I honestly do not know the answer, although the hon. Gentleman probably knew it before he asked the question. I think that there are limited numbers of casinos in the EU. My knowledge of the French industry is that the French were very prescriptive about where they locate casinos; they put them in spa resorts. I am not sure where the hon. Gentleman is leading with his question. I know that certain countries, such as France, have been very particular as to where they place casinos.

Bob Russell (Liberal Democrat, Colchester)

I wonder whether the hon. Gentleman thinks that it would be helpful to the debate in the United Kingdom if the Government provided examples of how our European brothers and sisters have handled the issue of mega-casinos and the type of gaming machines that he mentioned, which we are told are very common in the United States. It would help the debate if we could have examples of how the issues are dealt with in the European Union.

Malcolm Moss (Conservative, North East Cambridgeshire)

The Minister heard the hon. Gentleman's question, and although I do not have the answer to it, the Minister may respond to it in his own good time.

Richard Page (Conservative, South West Hertfordshire)

Would it help my hon. Friend if I said that he is absolutely right in saying that the French have been very prescriptive about where they locate their casinos? However, there is an obligation on casino operators to provide cultural support for particular areas; for example, by providing an arts theatre. I can produce actual examples if my hon. Friend requires me to do so.

Malcolm Moss (Conservative, North East Cambridgeshire)

That, too, is an excellent point, but with all due respect the Government intend to achieve similar outcomes through the regeneration benefits from the permissions for the eight regional casinos. No doubt we will have greater detail on that later, when we get the criteria for selecting the eight. However, the Government's position, which we share, has always been that the permissions for regional casinos or resort casinos—or leisure destination casinos, as my hon. Friend knows the scrutiny Committee wanted to call them—should be predicated on the delivery of massive regeneration benefit, either culturally, socially or economically. Hopefully, the Government will establish tight criteria to achieve that end. The incoming investors—with all due respect to them—will also want to see that regeneration, because that is part of the reason for allowing them in as planned.

The question of whether there are 1,250 or 2,000 category A machines is irrelevant in a way, because the big casinos would say that they know their clients and are capable of setting up sophisticated mechanisms for tackling problem gambling and counselling people who get into difficulties. The evidence from the United States and South Africa is that there is not massive

problem gambling as a result of access to category A machines in casinos. There is plenty such evidence in Australia, but category A machines are on every street corner there, in pubs, bars and so on, and ambient gambling is a serious problem. Given evidence from the United States, why are the Government imposing a limit of 1,250? Why not 1,000 or 1,500? There is no logical answer, because 1,250 is a number plucked out of the air and, although incoming investors could probably live with it, it is not based on any serious logic.

Mark Prisk (Conservative, Hertford and Stortford)

My hon. Friend is providing us with an incisive insight. Does he think that there is an economy of scale below which there is a danger that the investors whom the Government wish to draw in may hesitate and we may end up with something that is, in legislative terms, neither one thing nor the other? In other words, we will have something that does not achieve the goal that the Government are claiming and that does not settle and clarify existing legislation.

Roger Gale (Conservative, North Thanet)

Will the hon. Member for North-East Cambridgeshire be kind enough when he resumes to address the Chair, rather than the Committee? He will find that not only will the Chairman be able to hear him more easily, but so will the vast listening audience to whom the sitting is broadcast.

Malcolm Moss (Conservative, North East Cambridgeshire)

I will, Mr. Gale, although I do not want to turn my back on Committee members, because they have such smiling faces.

There is a threshold. Investors will be making a significant investment and they have a view on whether a deal will be profitable and worth doing, or not worth doing. They seem content with the threshold of 1,250 machines, although I think many of them would like more. They are interested in upgrading the facilities. Many have told me that they are quite happy with the requirements for floor space to be extended above 10,000 sq m. Those people are not hesitating to come forward with substantial investment, but that has to be mirrored and replicated by the return from the gaming machines. We do not have a problem with a pilot scheme for regional casinos with category A machines. However, there still seems to be a misunderstanding on the part of many of those involved.

I am also not sure whether the Secretary of State and the Minister are clear in their own minds exactly what the category A machines will do. At Question Time yesterday, the Minister said that only a proportion of the machines would be category A machines. That is not my understanding. Incoming investors want 1,250 category A machines. There will not be unlimited stakes and prizes on all of those, of course, because we could not afford that. A proportion at the top will pay out huge amounts, but the majority will pay out sums similar to those offered by category B machines, while still being defined as category A machines.

In other words, the point about category A is that the machines can be altered all the time to do what we want them to do. They can either pay out a huge amount or a smaller sum. It is that mix of machines,

stakes and prizes that gives the operator total flexibility and control over the end product. That is attractive to operators. So, the machines will be category A, in that the stakes and prizes will not be limited, but the vast majority of them will not allow stakes or offer prizes much greater than the category B limits of a few pounds and £500—or, in casinos, a maximum of £2,000.

We need huge numbers of people to come to the casinos and play the machines. On more than one occasion, 20,000 has been mentioned as the number of people who regional casinos need to cross their threshold on a weekend—certainly on Fridays and Saturdays. So, there will be huge numbers of people playing the machines and not everybody will walk into the casinos with several hundred pounds in their pocket. Most of them will play with £10, £20, £30 or £40 and then leave and do something else in that complex. That is the experience that has been related to us by American casino owners.

Why is there a big question mark about category A machines? Why are they so terrible? I do not think that the Government have justified saying, ''We must keep them in this location, because the consequences of doing otherwise could be traumatic.'' I do not think that there is evidence to justify that view. Countering that argument, again on the theme of comparability, where would that leave the existing casinos—small and large—in this country? They are told that they cannot have category A machines. They can have only eight category B machines, with a maximum payout of £2,000. I think that the maximum stake is £1. I am not sure that they can even have FOBTs; I do not think that they can. So, the option of playing a stake of up to £100 on a FOBT at £15 a throw is not available.

The existing casinos, which are membership only, which control their gambling extremely well and which have, to my knowledge, caused no social problems whatever in the past 20 years or more, are being told that they are not able to have category A machines—because? No answer is given.

Don Foster (Liberal Democrat, Bath)

I apologise for interrupting the hon. Gentleman's flow. He said in passing that he thought that small and large casinos would not be able to have FOBTs. That is not my understanding and I wonder which of us is correct. It is important to get that clear on the record.

Malcolm Moss (Conservative, North East Cambridgeshire)

I presented my question in a rhetorical manner; I did not know what the answer was. The hon. Gentleman nodded and then looked at his notes and decided that he should not have nodded in agreement. No doubt the Minister will clarify that point. The point that I am making—

Don Foster (Liberal Democrat, Bath)

Having looked again, I am fairly confident that I am correct in saying that category B2 machines would be allowed, with a maximum of four machines in such casinos. That view is based on page 23 of the helpful explanatory notes.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to the hon. Gentleman for clarifying that point. However, the point that I am driving at is about the basis on which the Government have decided that casinos other than the new regional casinos will not have any category A machines.

Richard Page (Conservative, South West Hertfordshire)

My hon. Friend is pushing on a most important point. The new regional casinos will have considerable leisure facilities, and my experience and knowledge tell me that some 50 per cent. of their profit will come from activities other than gaming.

However, if the regeneration moneys are to be put into the various areas, there has to be a carrot: a differential between casinos that have served the country well with very little trouble and the bigger resort and regional casinos. That difference could be category A machines. If such machines were allowed into the other casinos, perhaps fewer regeneration benefits could be creamed off into the various areas. Does my hon. Friend think that a valid point?

Malcolm Moss (Conservative, North East Cambridgeshire)

It could be, if the proliferation of small and large casinos were allowed. If regional casinos were limited to eight, investors who had hoped to go into regional casinos might look elsewhere and start to invest in new large casinos around the country. We have raised that issue on more than one occasion, and it needs to be addressed. The Government have said that they will look at it, and we wait for their proposals on that.

If a person has a holistic view of the issue and attempts to control access to category A machines, their argument is weakened if one week they say that they do not mind if there are 50,000 of the machines in 40 regional casinos, but the next week, when the number of potential regional casinos has dropped to eight and there will be only 10,000 potential category A machines, they say that no one else can have them.

I tabled an amendment—to clause 163 I think—that would have allowed small and large casinos to have a proportion of category A machines. The amendment was thrown out, but I revisit the issue that it raised, which ought to be considered. If that proportion were small—say, 20 per cent.—that would not amount to a great number of machines in small and large casinos; there would be something like 900-plus in all the casinos currently in the country.

The idea that with only six category A machines one would be in a position to pay out huge amounts of money is a nonsense. One cannot pay out huge amounts of money if one has not taken them in. All that the proposals would give the casinos would be the flexibility—also given to the regional casino operators—to set the machines with unlimited stakes and prizes, although limits would obviously be set by economic and financial considerations, because no one would pay out huge amounts if huge amounts of money were not taken.

John Pugh (Liberal Democrat, Southport)

I want to respond to the comments made by the hon. Member for South-West Hertfordshire. He put one of the arguments for keeping category A machines in regional casinos. Those casinos cannot have it both ways. In one sense, they are sold to us not only as casinos, but as places

with far more—as entertainment complexes as well. However, they are also sold to us as a particularly lucrative type of casino. One can run one of those arguments, but not both.

Malcolm Moss (Conservative, North East Cambridgeshire)

People would not seek to invest millions of pounds unless they could see a decent return. Frankly, I think that the jury is out on whether the American experience can be replicated in this country. From the point of view of the incoming investors and the regeneration that we hope will take place, I hope that that is not the case. However, I see little evidence in this country that people are prepared to go in their thousands to play on machines in a casino.

John Pugh (Liberal Democrat, Southport)

I did not express my point particularly well. I was trying to say that if casinos are to be so inordinately attractive because of their other entertainment advantages, there is not an overwhelming case for their being inordinately attractive because of their gambling machines.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am sorry that I missed part of the thrust of the hon. Gentleman's question. We have received conflicting evidence. Some operators say that half of their profits will come from gambling and half from other activities. Others have categorically stated that more than 80 per cent. of their profits will come from gambling, which means from category A machines—they will obviously have gaming tables, but the real money will be made from the machines. There is not an absolute model. Some expect to gain more from other activities, but even in those cases, more than 50 per cent. of profits would come from gaming machines.

It is important that the Government rethink access to category A machines in an even-handed and balanced way. We are not talking about massive proliferation. If there is control of casinos at regional and lower levels, it is only fair that other players should have access to such machines. The Government intend a so-called pilot scheme involving a trial of eight regional casinos, and they will monitor both the effects of the scheme and the gambling experience to highlight any problems. Therefore, the pilot could be extended to all category A machines wherever they are located, and the gambling commission should be in charge of that.

Clive Efford (Labour, Eltham)

I am afraid that the hon. Gentleman has left me very confused. In an earlier debate, he was keen to limit the number of regional casinos to eight. He now seems to be advocating the proliferation of major casinos by the back door by allowing existing casinos to have category A machines. What is his definition of a regional casino and of the new casinos that he envisages having category A machines?

Malcolm Moss (Conservative, North East Cambridgeshire)

I am sorry that the hon. Gentleman is confused; I will try to explain myself as clearly as possible. We have a model of a regional casino with 1,250 category A machines, millions of pounds of investment, and a floor space for gambling of some 1,000 sq m compared with 9,000 sq m for other use,

including hotels, restaurants and leisure facilities. We tabled an amendment suggesting a trial of four regional casinos, but the Government have decided on eight, and we are reasonably happy with that. However, that still means that there will be 10,000 category A machines. My argument about those machines going to some small and large casinos would mean a maximum of about 900 extra machines. Ten thousand plus 900 is fewer than 11,000.

Until a few weeks ago, the Government were contemplating more than 40 regional casinos with a total of 50,000 category A machines, and they did not blink at that prospect. The only people who blinked were Labour Back Benchers who gave the Government a hard time on Second Reading, and Opposition Members. Where is the Government's consistency on this issue? There is none because they are all over the place. They have not explained why it is reasonable and proper to give category A machines to new regional casinos but deny them to existing casinos, which have caused no problems over the past 20 or 30 years and rightly feel that they are in an uncompetitive position.

I turn now to category D machines, to which my hon. Friend the Member for Hertford and Stortford referred earlier. The Government intend to remove category D machines from a whole swathe of locations, including chip shops and taxi ranks, on the grounds of protecting children. They seem adamant that they will stand by that decision. They are attacking the members of BACTA in adult, but mainly family, gaming centres by saying that restrictions will be placed on category D games so that a prize of a teddy bear will be reduced in value from £8 to £5. That is causing much anger and concern because there does not seem to be any logic to such a change.

The BACTA members say that they would prefer to keep the £8 cuddly toy as a prize for presentation purposes. They can then show something substantial to the punter, whereas if the value of the prize were reduced even by £3, it would make a difference in their ability to make a profit. Even at that level, the Government seem a little inconsistent. Why are they taking such action? What is the reason for reducing the value of the prize from £8 to £5? It has no basis in logic. Such a provision was not in the Budd report. I accept that it recommended that category D machines be removed from ancillary places, but I suppose the key to the problem is that, if the machines were in family amusement centres, activities would be policed and there would be management control over who was playing the machines. I go along with the Government in that that gives comfort to those who want to protect the vulnerable and children, in particular.

The provision is giving BACTA members a serious headache. On the one hand, they are told that, at the bottom end of what they do, they have to make changes—in the wrong direction, in their view. On the other hand, they are told that they will not be able to move forward and have FOBT machines and others of that ilk. That means that all the time the competition

is being enhanced and developed at their expense, as a result of which they will face even greater competition in the future.

I return to the argument about the category B machines. Why will they only be in betting shops? Why will not some bingo places and adult gaming centres be allowed to have them? The Government may say that that will lead to proliferation, that controls must be exercised in one way or another, and that the gambling commission will be able to review matters later. However, huge swathes of the industry are now left with the uncertainty of wondering whether their businesses will survive. For whatever reason, the Government have decided to take certain measures without understanding the fundamental impact on the businesses concerned.

Mark Prisk (Conservative, Hertford and Stortford)

I am sorry to interrupt the flow of my hon. Friend's argument; he is about to touch on an essential element. I want to return to my worry that, as is often the case with regulations, the people who will be most affected by the provision will be the small, family enterprises. Will my hon. Friend comment on that?

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to my hon. Friend for emphasising that point. Perhaps I did not cover it in enough depth, but a huge number of businesses, especially BACTA members who run amusement arcades, many of which are fundamentally important to the leisure experience in many seaside towns, feel under threat. They are mainly small businesses. Their problem is that, if they do not invest, their businesses will deteriorate because their shop fronts and arcade fronts will being to look seedy and decrepit, which is the last thing that they want—[Interruption.]

Roger Gale (Conservative, North Thanet)

Order. If the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) wishes to open her post, would she read it in the Corridor or, at least, less audibly?

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to you, Mr. Gale. I thought that the hon. Lady was opening a big sweetie and I would not have minded one for later.

Joan Humble (Labour, Blackpool North and Fleetwood)

It is a Fisherman's Friend.

Malcolm Moss (Conservative, North East Cambridgeshire)

That joke fell flat last time I made it. Not many people realise that Fleetwood is famous for the Fisherman's Friend lozenge. Have you got some?

Roger Gale (Conservative, North Thanet)

Order. I have not.

Malcolm Moss (Conservative, North East Cambridgeshire)

Returning to the clause, many BACTA members are small businesses and they feel that they are being attacked from all sides. At the bottom end, on the category D machines, they are being attacked on the value of the prizes that they can offer, and in their adult centres they are not being allowed to expand into category B machines. They feel that the anti-competitive nature of much of the Bill is seriously deleterious to their interests and future, and many are worried about the uncertainty.

We had a debate on an earlier clause about the Secretary of State's powers to alter provisions. The Minister would argue that the gambling commission will advise the Secretary of State, but, again, there is a question mark over the industry. Some people are saying that, because of the Bill, they cannot sell their businesses because no one can afford to buy them based on the value that they had several months ago. There is uncertainty about putting a proper value on a business, and that leads to uncertainty in planning for the future. If the future for those gaming centres is as bleak as people say, not only will they not sell them, but many businesses will be devalued, a lifetime's work will go down the drain and many of our seaside towns will be worse off because those businesses no longer exist. There are inconsistencies throughout the Bill.

The Bill is about location and accessibility to gambling, gaming and betting, but this clause is about the facility that is available in each location. It is critical not just to look at where the locations are and how many there are, but to get the categorisation of machines right.

Richard Page (Conservative, South West Hertfordshire)

Does my hon. Friend feel that when the Minister replies to his valid and wise comments, he should address the time scale for the measures? Any business, if it knew that there was to be a review and an outcome to be reached, would be prepared to handle that and to plan. The scrutiny Committee said that a number of category A machines should be allowed into casinos that were in operation before 7 August 2003; it then said that any casinos starting after that date should be considered after a period of showing that they are capable of running a proper operation. The Government responded by saying that their

''policy is to limit accessibility of Category A machines by initially allowing them only in regional casinos.''

They then said:

''Clearly there are risks and the Government believes it is right to proceed cautiously with effective and rigorous monitoring of their impact.''

I go along with all that, but they then said that

''the Government is minded to await the results of at least two prevalence studies, after the implementation of the new regime, before considering significant alteration to the gaming machine entitlements of all types of casinos.''

That is as long as a piece of string. Will it be one year, two years, 10 years or 20 years? We have no idea at all. Does my hon. Friend feel that the Minister should try to give a time scale to provide comfort to casino operators so that they know how to plan for the future?

Malcolm Moss (Conservative, North East Cambridgeshire)

My hon. Friend moves the argument on another stage. At this juncture, I was not attempting to be too specific or prescriptive. The key decision that the Government should be taking—they may well have to take it in the other place—is to be more even-handed, fair and balanced in their approach to who gets what machine. My hon. Friend makes a valid point, which was addressed to the Minister. The timing

of the introduction of many of these things is as important as the decision to allow them in the first place.

I wind up my remarks on category D with the views of BACTA members. All in all, the Government could not have got it more wrong, because the Bill pleased no one in the industry. Many Government Bills do not find favour with sections of the business community, but to upset everyone must be the accolade of all time. I rest my case.

Don Foster (Liberal Democrat, Bath)

I hope I shall be briefer than the hon. Member for North-East Cambridgeshire, who covered many important points in a lengthy contribution, and I do not criticise him for that. I want to pick up on a couple of the points that he raised and to ask the Minister one or two questions.

The hon. Gentleman rightly raised several issues in respect of category A machines, which, he pointed out, allow a wide variety of things to happen. Some of those machines will be set in such a way that the maximum stake, and the maximum prize, is unlimited. We understand from the Minister that experience worldwide suggests that operators are likely to set about 10 per cent. of their machines to take an unlimited stake and give an unlimited prize, although he was not prepared to cap the proportion, as some of us hoped that he would.

In paragraph 2.18 of the regulatory impact assessment, the Government make it clear that they are concerned about the potential harm of the proliferation of high-prize, high-stake machines and wish to keep the matter under review. As we understand the current circumstances, when the Minister eventually proposes his amendments to clause 7, the proliferation of category A machines will be limited by restricting the number of regional casinos—the only casinos that can have category A machines—to eight. The Minister said that that would allow them the opportunity to carry out research into the effects of the introduction of category A machines, especially in relation to their effect on problem gambling. However, the hon. Member for North-East Cambridgeshire rightly pointed out that that will lead to a furtherance of the unlimited playing field between the new regional casinos and the existing 134 UK casinos.

The Minister could have said that, if there is to be a trial of the effects of category A machines, especially in relation to problem gambling, a better set of circumstances in which a trial could take place would be having a limited number of category A machines in a wider range of settings—in other words, allowing a small number of category A machines in small and large casinos, which, as the Minister said, will be limited in some way.

Richard Page (Conservative, South West Hertfordshire)

Will the hon. Gentleman give way?

Don Foster (Liberal Democrat, Bath)

In a moment. Surely, by so doing, it would give a much better opportunity to provide a more level playing field and better circumstances in which the research could take place. I remind the Minister and the hon. Member for North-East Cambridgeshire that I did a calculation last week

based on the hon. Gentleman's figures that showed that if, for example, small and large casinos had a limit of 20 per cent. of their machines as category A machines, the existing 134 casinos would have a grand total of only 824 category A machines, which would be far less than the 1,250 category A machines that any one of the new regional casinos could have. I do not believe that that would add significantly to the number of category A machines in circulation, and it would enable us to have a more level playing field and a better set of circumstances for trials.

We had a discussion about certain aspects of category B machines, particularly the FOBT machines, and I shall wait for the Minister's response to check what the circumstances might be in that regard. I want to conclude by making a few points in relation to category D machines.

Mr. Page rose—

Don Foster (Liberal Democrat, Bath)

I do apologise. I promised to give way to the hon. Gentleman earlier. It was discourteous of me not to do so.

Richard Page (Conservative, South West Hertfordshire)

We all have senior moments; I am happy with that. I apologise to the hon. Gentleman for not being present for his opening remarks. I came in when he was talking about trials in certain large and small casinos. That sounds marvellous in theory, but would that not create an imbalance with other large casinos that were not part of the trial? Would the clientele not be tempted to go to the casinos that had the category A machines as opposed to those that did not? I am with the hon. Gentleman in his spirit of experimentation but I am not sure whether that is fair to the whole industry.

Don Foster (Liberal Democrat, Bath)

I do not wish to be unkind to the hon. Gentleman, but at the point of my speech when he entered he did not quite engage himself. I did not suggest that only some of the small and large casinos would have the opportunity for 20 per cent. of their machines to be category A. I suggested that all of them should have that opportunity. Whether they choose to take it up is a matter for them. If all took up the option—if my calculations are correct—there would be a total of 824 category A machines.

To move on to the subject of category D machines, I have a great deal of sympathy with the remarks of the hon. Member for North-East Cambridgeshire. I am not convinced by any of the arguments that I have heard advanced by the Government—although detail in those arguments has been scarce—to justify the reduction of, for example, an £8 cuddly teddy bear to a £5 one. There are no benefits for anyone in doing that. There is no research evidence that suggests that doing so would reduce the proliferation of problem gambling among young people and children. I am sure that the Minister, having heard our concerns, will have done a bit more homework by now and will have some information for us.

The hon. Member for North-East Cambridgeshire raised an issue that we have debated at length, but it is important to put it on record. There is a sword of Damocles, as I describe it, existing in clause 157 whereby the Secretary of State will have reserve powers to make it illegal for parents to enable their children to use category D machines. Apparently, it is a backstop power that might be necessary in the event that research demonstrates what we know is not the case at the moment, based on the rather limited evidence to date—the significant problem that the Minister suggests might arise as a result of later research does not exist.

That sword of Damocles is of great concern to those people who own and run family entertainment centres. I find it totally bizarre that the Secretary of State will have backstop powers in relation to category D machines in those circumstances, but will not adopt similar reserve powers in relation to category A machines. I find that difficult. In the event that the Government find that there is no research evidence to suggest that category A machines lead to increases in problem gambling, will the Minister explain the arrangements whereby the Government will consider making it possible for small and large casinos to have them?

Therefore, there is concern about the sword of Damocles and about the changes in prizes. There are also concerns about when the Government are likely to have a change of heart on prizes, categories, speed of machine operation and so on. An issue that we have touched on is the absence in the Bill, on the surface at least, of a triennial review, something that has proven helpful in the past.

Mark Prisk (Conservative, Hertford and Stortford)

The hon. Gentleman is making some pertinent points. Does he share the view that, while the continuing uncertainty about the nature and scope of the regulations is frustrating for us as a Committee, the uncertainty is more acute for the businesses that will be affected? Does he share my concern that that is often overlooked by Government, both at a ministerial level and in the civil service?

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman is 100 per cent. right. Those concerns have been expressed to me by a large number of people, both those I have spoken to face-to-face and those who have contacted me by other means. He will, no doubt, be aware that there are 44,500 category D machines in 30,000 unlicensed premises, all of which look likely to lose part of their source of income. However, there is uncertainty about whether they will do so.

To pick up that point, as I was going to come on to it, it worries me enormously that the Government are, based on no convincing evidence that I have come across, proposing to take away from fish and chip shops, taxi cab offices, cafes and so on the opportunity to have category D machines. That will have a significant impact on some businesses.

It was suggested earlier that up to 30 per cent. of profits might be lost by some organisations. Some research that I did on fish and chip shops suggests that that figure is not totally out of order. My own figures

suggest that up to 25 per cent. of profits might be lost; that is the same order of magnitude. That in turn is backed up by the Henley Centre report, which the Government generously make reference to in the explanatory notes, which suggests that up to 600 businesses may close as a result. The hon. Gentleman talks about uncertainty and the impact that it has on business. Even the Government, in their explanatory notes, make clear that there is cause for real concern.

That concern is about what is proposed in the Bill. It does not include the concern about the other powers that the Secretary of State will have, not least those in clause 157, which include the reserve powers. Therefore, there are many concerns about category D machines, many of which have been picked up before.

Perhaps the most important thing is to have some stronger suggestion from the Minister about what the hon. Member for South-West Hertfordshire called the time scale for a review of the decisions that are being taken. I remind the Minister of the exchange that he and I had when we were talking about the triennial review. The Minister will recall that I proposed an amendment to reinstate the triennial review, which mirrored an amendment that the hon. Gentleman moved during that deliberation. The Minister said:

''However, we do not believe that the triennial review needs to be enshrined in legislation. The review of stakes and prices under the 1968 legislation has operated effectively and for many years as a matter of custom and practice. I expect that to continue.''

I intervened to say:

''When the Minister says that he expects the current arrangements for the triennial review to continue, would he welcome it if they did so?''

I was grateful in part for the Minister's response:

''I suppose that I would welcome that''.—[Official Report, Standing Committee B, 2 December 2004; c. 382.]

That is not quite as convincing an answer as I would like and it is certainly not as convincing as the people who work in the industry would like. If the Minister can do nothing else, he could make it absolutely clear that the Government wish the new gambling commission to instigate a continuation of the triennial review. At least that will give part of the answer to the concerns of the hon. Member for South-West Hertfordshire about having a clear timetable.

Roger Gale (Conservative, North Thanet)

Order. If the Minister seeks to do that, he will have to persuade the Chair that it is in order because I cannot find any reference to it in the clause.

Don Foster (Liberal Democrat, Bath)

I had sat down, Mr. Gale, but lest I am somehow tempting the Minister to speak words that might cause you to be upset with him, I suggest that the clause sets out the details of the various categories of gaming and gambling machines that are to be allowed in this country and that the triennial review provides the opportunity to make changes to that. The triennial review or some sort of review process is a crucial part of the clause. If within a short time the Government acknowledge, based on research, that they have got things wrong, we need assurances that they have the powers to put that right. More important, we need assurances that they have the powers to have research carried out to show that they have got things wrong.

Roger Gale (Conservative, North Thanet)

Happily, I suspect that Mr. Pike will have to make that decision.

Mark Prisk (Conservative, Hertford and Stortford)

This is an important issue. It appears narrow, but it is not in so many ways. The excellent exposition from my hon. Friend the Member for North-East Cambridgeshire highlighted a number of questions. I want to concentrate on two aspects. The first is the purpose of the regulations in the clause, particularly with regard to the scope and nature of category A and B machines.

I turn to the regulatory impact assessment, with which the Government have provided us, to understand their objectives for the regulation of gambling. They tell us—I will quote briefly from the RIA—that their objectives for regulating gambling are clear. Their first objective is to

''prevent gambling being a source of crime and disorder''.

In what possible way do the regulations fit that? I do not think that they do. The second purpose is to

''ensure that gambling is conducted in a fair and open way''.

As both speakers have told us, it is quite clear that there is an inherent unfairness that lies at the heart of the way in which the regulations have been presented to us. We then turn, in slight desperation, to the third Government purpose, which is to

''protect children and other vulnerable persons from being harmed or exploited by gambling''.

In what possible way are the regulations appropriate, or indeed relevant, to that and how are they, by distinguishing between existing and new forms of casinos and establishments, in any way fulfilling that purpose?

I am at a loss to understand exactly how these regulations and the clause fit the Government's overarching objectives in terms of regulation. I hope that, when the Minister responds, he will tell us which of those three objectives the regulations are meant to fulfil.

I now come to the pivotal question, which I have alluded to in a number of interventions on my colleagues and the hon. Member for Bath (Mr. Foster). This is an important issue. The key word that was used several times by hon. Members is ''uncertainty''. It is easy for us to look at these issues as simply words on a piece of paper, but they are not. They will directly affect the livelihoods of millions of people. I am particularly concerned about owner-managers—people for whom this is not simply a job, but probably their livelihood and in many cases their pension. It is not just about whether they have employment. It is about the future of their livelihood and family. Therefore, I take the issue seriously.

I raise that point because it appears, from the deliberations this morning and from talking to those involved with enterprises in my constituency, including a number of fish and chip shops and a number of other small enterprises, that those people really do not know where they stand and what future there is for their livelihood.

Don Foster (Liberal Democrat, Bath)

Does the hon. Gentleman share my considerable surprise that, responding to a parliamentary question of mine on 7 September, the Minister told me that at that time neither he nor his Department had had any consultation with the bodies that represent the owners of premises such as fish and chip shops and cab offices? Is the hon. Gentleman not surprised that, considering the huge impact the legislation might have on such organisations, there has been no consultation?

Mark Prisk (Conservative, Hertford and Stortford)

If I did not know this Government better, I would be surprised, but, as I am one of the officers of the all-party group on small business, which, I am happy to say, is the largest all-party group, dealing with a matter of concern to all Members, I know that all too often consultations ignore important groups and sectors, particularly the smallest and most vulnerable of our businesses.

This legislation has had a large gestation period. The Minister is proud of the range and scope of the consultation, although as the hon. Member for Bath has highlighted, there have been significant flaws and absences from it. I detect a peculiar position. The Committee is considering amendments based on negotiations taking place simultaneously to our deliberations. The problem with that is twofold. First, it limits the House's ability to scrutinise effectively and thoroughly, because matters are changing almost as we discuss them. That has been illustrated by the six-page new schedule, which landed on us with less than 24 hours of parliamentary time in which to consider it. Secondly, it highlights the concerns among many businesses that policies are being dreamt up by the Government as they go along.

I am concerned because we are dealing with real people. We have heard the Government's own estimate that 600 businesses are potentially at risk. I suspect that there will be more. I fully accept that I do not have any evidence for that, but in talks with many of my local enterprises, it has become clear that they genuinely do not see their way out of the process.

The way in which this legislation has been brought about has been poor. We have seen it in other instances. I will not detain the Committee by

highlighting them, as you, Mr. Gale, will quite rightly say to me that it would be inappropriate to do so. However, the way in which the Government are determined to muddle through, rather than establish the facts, create clear policies and introduce them with the full support of those affected, is not unfamiliar to us.

Clive Efford (Labour, Eltham)

Will the hon. Gentleman explain how a proliferation of gaming machines in unregulated establishments on high streets throughout the country is consistent with his concerns about large numbers of category A machines?

Mark Prisk (Conservative, Hertford and Stortford)

The hon. Gentleman will realise that that was not what I was saying. I was talking of my concern about the impact on small businesses. The concept of proliferation is rather rich coming from the Government Benches. There has been no consistency from the Government.

Without wishing to stretch the patience of the Committee any further, I will conclude by saying that the remarks made by my hon. Friend the Member for South-West Hertfordshire were right.

Ann McKechin (Labour, Glasgow Maryhill)

Will the hon. Gentleman give way?

Mark Prisk (Conservative, Hertford and Stortford)

Not at the moment. We need to see a time scale established. It is important. If the hon. Lady wishes to contribute, she is welcome to do so after I have concluded, but I do not wish to stretch your patience any further, Mr. Gale. The Minister should in his reply ensure that a time scale is set out, so that those owner-manager businesses in my constituency and elsewhere are able to plan their businesses and have a sensible future.

Ann McKechin (Labour, Glasgow Maryhill)

I have listened very carefully to the Opposition, and their argument that category A machines should be tested—

It being twenty-five minutes past Eleven o'clock, The chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee B

Clause 220 - Gaming machines: Categories A to D

Ann McKechin (Labour, Glasgow Maryhill)

As I was saying when we adjourned this morning, the Opposition parties have tried to suggest that category A machines should be piloted in medium-sized and small casinos, which exist under the current gambling legislation. However, both parties failed to recognise the fundamental difference between the type and, in particular, the location of medium-sized and small casinos, and super-casinos.

In my city, for example, the majority of the five or six small to medium-size casinos are on the high street in the middle of retail centres. They are located in similar places to the local bookmaker. The type of premise that they are in, the clientele that they are likely to attract and the times that they are likely to open are therefore substantially different from those of the so-called super-casinos, which will, in the norm, be in separate locations. Visiting them would involve a specific intention, rather than their being something on the high street to pop into on the way to the shops or to visit relatives. Using super-casinos is a specific leisure activity, which requires specific intention and, normally, a visit.

The second thing that the Opposition suggestion ignores is that the reason the Government have agreed to consider super-casinos is the potential that they offer for regeneration in areas that require greater economic growth and investment. If we decide to pilot the category A machines in a host of different locations, many of which are not in regeneration areas, the likely benefit of locating in a regeneration area will be diminished. The likely consequential improvement to economic growth and employment to regeneration areas will also be diminished. In fact, the fundamental intention of the Bill—in terms of creating super-casinos—will be put at risk.

Malcolm Moss (Conservative, North East Cambridgeshire)

Will the hon. Lady tell the Committee why the scrutiny Committee, which considered the issue in great detail and took a huge range of evidence, recommended that category A machines should be placed in both small and large casinos?

Ann McKechin (Labour, Glasgow Maryhill)

With respect, the Government are entitled to consider what the scrutiny Committee stated and then make their own views known. They also take into account not only the views of the industry, which Opposition parties have referred to throughout because it is to the industry's advantage to pilot category A machines, but the interests of our constituents and other groups and organisations that have expressed concern about the way that we control gambling.

The Government, having listened to the concerns that were expressed on both sides of the House on Second Reading about the number of casinos to be initially introduced, were right to decide that the number of super-casinos to be introduced will be low; that given the size and nature of the development concerned, super-casinos are likely to be located off the high street; and that we can then judge whether, based on the review that the Government have said they will implement, category A machines have a disadvantageous effect on gambling addiction problems.

I do not understand how a pilot scheme in high street locations would be an improvement. In fact, I think that it presents greater dangers, the like of which—as is clear from the sentiments expressed by various Members on Second Reading—Members do not wish to face at this stage. They prefer to adopt a more cautious approach.

Richard Page (Conservative, South West Hertfordshire)

I rise with a degree of hesitation, because when I spoke on clause 219, the Minister said that, although I am normally fair-minded and use a broad-brush approach, this time I was pedantic and approaching the issue as if in a debating society. It seemed to me that I was getting somewhere near the truth of the matter. The Minister was starting to squirm a little, because I was making the point that the powers given to the Secretary of State under that clause were excessive. Defending democracy and the liberties of the individual, I felt that some transgression was taking place. It is with temerity that I go on, and I am not too sure how the Minister will react to what I say. If he says that I am broad-brushed and open-minded, I will have failed in what I am trying to say today, but there we are, that is the way the cookie crumbles.

In an earlier intervention in this debate, I made a point about the time scale. The scrutiny Committee, on which I had the privilege and pleasure to serve, made several recommendations. With new casinos, after three years the agreed entitlement should be reviewed. The Government's response stated that they were

''minded to await the results of at least two prevalence studies, after the implementation of the new regime, before considering significant alteration to the gaming machine entitlements of all types of casinos.''

In an intervention, I made a point, which, realising its strength and power, my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss), seized upon. I wish to re-emphasise it. The prevalence studies are carried out by organisations that are very knowledgeable about the gaming industry. For

example, I refer to the Association of British Bookmakers, which has agreed a code of practice with the Department for Culture, Media and Sport and the Gaming Board for Great Britain which has been adopted by the betting industry. It is being rigorously applied, enforced and policed through a formal compliance committee. That does not come cheap, but it is being carried out by the industry for the good of society. It has already cost the industry £200,000, and it will cost another £200,000 to introduce it and bring it to completion.

The inherent understanding in that agreement is that the code will be enshrined in regulations to be applied by the gambling commission. If we are going to carry out this work, we want to ensure that the results agreed are enshrined in the day-to-day operation of the gaming and gambling industry. The ABB has funded extensive research, conducted not by itself—because it might be said that it was all in-house—but by MORI and European Economics, aimed at ensuring the code's effectiveness. Again, although the research is funded by the ABB and the DCMS are getting the results for free, the Department has been fully engaged in defining the terms of reference of the research.

This is not, as is so often the case when Governments undertake reviews, a question of the industry defining, investigating and monitoring itself; it is an external operation. I therefore feel that the Government should state the time scale in which they expect to respond to the results of the review. The Minister owes it to the Committee to say when they will respond, explaining how they will deal with the results of all those studies. The review under discussion is just one, costing £400,000. I know that it is not the Government's money, and they are fairly careless and cavalier with other people's money, so, on behalf of the industry, I ask the Government to state the time scale for their response to and implementation of measures for the benefit of the gaming industry.

Richard Caborn (Labour, Sheffield Central)

Welcome to the Chair, Mr. Pike. It is good to have you back.

The clause allows the creation of four categories of gaming machine to be defined in regulations. Category D machines will have the lowest maximum stakes and prizes, and category A machines will have no limits on stakes and prizes. Subsection (2) will allow regulations to subdivide category B. That means that we can create B1, B2, B3 and B4 categories of machine to cater for the different allowances in betting offices, bingo premises and clubs.

Regulations made under the clause must categorise machines by reference to the nature of the gambling facilities provided. They may refer to amounts paid to use the machine, the nature and value of prizes and the premises where a machine is used. Our present proposals on stake and prize limits have been published in the regulatory impact assessment, which was referred to by several hon. Members earlier. In making these proposals, we received representations—I am sure that Committee members will hear this—

from every part of the gambling industry. To date, the discussions have been one-sided because of the voices we have been hearing in the prosecution of the case.

Those making representations argued for higher stakes and prizes for themselves, and lower stakes and prizes for their perceived competitors. We have also received representations from faith and children's groups who urged us to be even tougher on machine gambling. We believe that it is right to proceed cautiously and look closely at the evidence to make sure that we are not taking unacceptable risks. The clause gives us the power to make new regulations if the evidence shows that any of those machines are driving up levels of problem gambling. Therefore, we propose that category A machines be limited to regional casinos for the time being.

Category B machines include all machines currently known as casino jackpot machines as well as fixed odds betting terminals now found in betting offices. B1 machines will be available in casinos, and B2 in betting shops. Bingo halls and adult gaming centres will be allowed category B machines with prize limits of £500, and clubs and institutes will, under part 12, be allowed category B machines with £250 prize limits. Those will be B3 and B4 machines respectively.

Category C machines, with a £25 prize limit, will be available to premises licensed for alcohol and to licensed family entertainment centres. Finally, category D machines, with a prize limit of £5, will be available to family entertainment centres with permits, covering, for example, many seaside amusement premises and travelling fairs.

By setting stakes and prize limits in regulations, the Secretary of State will be able to make changes at any time, subject to the approval by Parliament of those changes. The regulations will be made using the affirmative resolution procedure.

Don Foster (Liberal Democrat, Bath)

May I ask the Minister about two points? First, will he repeat what he said about B2 machines? There was some confusion earlier as to whether FOBTs could be used in premises licensed for betting other than betting shops Secondly, he acknowledged earlier in his deliberations, and has repeated again today, that there is little evidence concerning category D machines to date, and more research is needed. Can he explain why, without any detailed final convincing research, the Government are making the major change of reducing the prize limit for those machines from £8 to £5?

Richard Caborn (Labour, Sheffield Central)

I will go through all the questions that were asked and give answers. A question was asked about category A machines and small and large casinos. We rejected the recommendation from the pre-legislative scrutiny Committee for very good reasons. It was clear on Second Reading that access to category A machines was of real concern to the House and the public; that concern manifested itself during the debate. That is why we reacted as we did and limited the number of regional casinos to eight. If we had not done that, there would have been real problems in returning to the House with a Bill. It would, therefore, be ludicrous to accept eight regional

casinos, but then to allow 130 casinos that already operate on our high streets to have category A machines as well. Indeed, we believe that we responded properly to the public mood and that is why we limited the number of regional casinos to eight and limited category A machines to those eight regional casinos.

Nick Hawkins (Conservative, Surrey Heath)

Because of my commitments to a Select Committee, I did not hear the latter part of this morning's proceedings, but I want to comment on what the Minister has just said and to ask him if I understood him correctly. He seemed to be eliding what the Government said on Second Reading with their subsequent U-turn on eight casinos. On Second Reading, they argued the opposite of what they more recently argued when making their U-turn in Committee. Is the Minister adopting the scrutiny Committee's report, or is he saying that, following the Government's huge U-turn, the scrutiny Committee was wrong? Which is it?

Richard Caborn (Labour, Sheffield Central)

What I am saying is simple. There was a debate in the House. My Secretary of State said clearly in the House and in public that if there was a force of evidence to suggest that we had not got it right, we would reflect on that, and we did. Sometimes, we have to be big boys and return to school to tell pupils in the school yard what we have done. I make no apology for that, because that is democracy. When the House spoke, it spoke positively. Some of my hon. Friends were concerned about the matter and we reacted to that. There is nothing wrong with doing that in a democracy. We have done it; we are big enough; we have come back; that is what we have done. I hope that we now have agreement across all parties.

Malcolm Moss (Conservative, North East Cambridgeshire)

I rise as a bully in the school yard.

Richard Caborn (Labour, Sheffield Central)

I never mentioned the word ''bully''.

Malcolm Moss (Conservative, North East Cambridgeshire)

The implication was there. I am puzzled by some of the logic. The Government rejected the scrutiny Committee's recommendation on category A machines in existing small and large casinos months ago and before Second Reading. At that time, the Government had in mind 20 to 40 regional casinos, each with 1,250 category A machines. To repeat what I said this morning, that could mean a maximum of around 50,000 category A machines. The Minister was correct in that he and his colleagues responded to the arguments on Second Reading, the press campaign and the reaction in the country to such a large number of regional casinos, but the Government were happy to reject category A machines in ordinary existing casinos when it was contemplating 50,000 machines elsewhere. Now they have changed their tune to eight regional casinos and a reduced number of, say, 10,000 category A machines. Why would the extra 900 machines that we are proposing should go into small and large casinos on a proportional basis cause any difficulty whatever?

Richard Caborn (Labour, Sheffield Central)

I go back to the earlier argument that we want to control the number of category A machines in regional casinos, whether there are eight or 20 of them. That was the Government's position. We responded to concerns about the number of regional casinos. If we accede to the suggestions that have been made, we would be extending the provision on category A machines to the 130 casinos that are already operational. We are not prepared to accept that.

Bob Russell (Liberal Democrat, Colchester)

Have there been any representations from the American backers of regional casinos who do not want existing UK casinos to have category A machines?

Richard Caborn (Labour, Sheffield Central)

Not to me; I would not accept such representations. If they have been made to other Committee members, so be it, but as far as I am concerned the answer is a categorical no.

FOBTs—category B2 machines—are already in betting shops, and that was an agreement with the industry. We said that that was a probation arrangement and it still is. The hon. Member for North-East Cambridgeshire mentioned the report. I have not seen it, but it is in my Department. My officials have a copy of it and I believe that they went to a seminar on it some time last week. Hopefully I will receive it in the next few days.

Don Foster (Liberal Democrat, Bath)

Just to get the flow of things right, the Minister will see that I tabled a parliamentary question about this very issue. Perhaps he can answer it now to save a lot of time for officials. Will he assure the Committee that, once he has read the report—I accept that he says that he has not yet read it—he will place copies in the Library of the House and make them available to members of the Committee?

Richard Caborn (Labour, Sheffield Central)

Yes, although the report will probably be in every betting shop, because it is not just our property. It is the ABB's property, as well as ours. I have no doubt that it will be in every betting shop and the Library of the House of Commons, so all the informed people will be able to read it.

On the decision on the B2s, and why they are not in the bingo halls, at the moment bingo halls can have four machines with a payout of £250, but they will be able to have four machines with a payout of £500. That is a new promotional opportunity. I am talking not about FOBTs, but about category B3 machines with a payout of £500. They have the same maximum prize money of £500, but the stake is different. Why? It is because there is hard gambling in betting shops; if someone wants to put thousands of pounds on horses, they can do so. There is a difference between where hard gambling and where softer gambling take place, which is why we believe that category B3 machines—with a £1 stake and a maximum payout of £500—are right for bingo halls, and FOBTs are right for betting shops. FOBTs will also be allowed in large and small casinos: 150 in the large and 80 in the small. I think that was what the hon. Member for Bath (Mr. Foster) was referring to.

The hon. Member for South-West Hertfordshire (Mr. Page) asked in great detail who had paid for the research that is being done. Earlier there was some suggestion that the Department for Culture, Media and Sport may have put a few bob into it. It did not. It was paid for in totality from outside, although—

Richard Page (Conservative, South West Hertfordshire)

I would hate the Minister to run away with the idea that I suggested that the DCMS put any money in at all. It was the industry that put the money in to work out the code of conduct for those particular machines.

Richard Caborn (Labour, Sheffield Central)

If the hon. Gentleman had listened to what I said, he would know that there was an hon. Member earlier in the debate who said that he thought that the DCMS had put some money in.

Malcolm Moss (Conservative, North East Cambridgeshire)

It was me, guv.

Richard Caborn (Labour, Sheffield Central)

I made it clear that the ABB paid for that out of the small profits that its members made.

Malcolm Moss (Conservative, North East Cambridgeshire)

Now that this has become public I must make a grovelling apology to the ABB for even suggesting that the DCMS put one penny into its research.

Richard Caborn (Labour, Sheffield Central)

Miracles take a little longer, if I may say so. I reiterate for the record that we did not provide any of the money.

On the important question of time, as has been indicated, we propose to restrict the prevalence studies to two over a six-year period. Therefore, there will be a prevalence study every two to three years and change will not be possible until six years after implementation. That was clearly known during pre-legislative scrutiny.

Richard Page (Conservative, South West Hertfordshire)

I have a simple question for the Minister: has he ever run a business? Does he really think that people can hang on for six years waiting for the Government finally to make up their mind? That is an incredible admission.

Richard Caborn (Labour, Sheffield Central)

Is it a matter of making one's mind up? I do not think so. It is a matter of having the advice and information with which to make an objective judgment. I am sure that the hon. Gentleman knows about medium and long-term strategies. All I am saying is that there is concern in the House, and Members wanted to run, in the words of one hon. Member, pilot studies. We have responded to that. Such studies need time to bed down. Once the results are known, the House will decide whether it wants to proceed with any further regional, large or small casinos. We made that very clear. Opposition Members asked us to do that. We have provided that lock, and the final decision will rest with Parliament. That is what people asked for; that is what we responded to; and that is what I announced when I said that we would limit the number to eight casinos.

Mark Prisk (Conservative, Hertford and Stortford)

I also listened to that admission with great concern. Will the Minister respond in a positive tone to this request? If it becomes clear from representations made by the

industry that the provision is having an onerous and undue effect on the industry, will the Minister consider them seriously and decide whether the Government are able to respond? Six years is a worryingly long period. Returning to this morning's discussion of owner-managers, this measure might be the difference between them having a successful business in the future or not.

Richard Caborn (Labour, Sheffield Central)

I do not quite follow the logic of that. Members asked, ''What is the period of time before the decision will be made?'' I have said that there will be two prevalence studies—one every two to three years. That is because we are informed that a certain period is needed to gather that information, to analyse it and to make some well based conclusions on which decisions can be made. Shortening that period would run certain risks: incomplete evidence, on which wrong decisions may well be made.

Malcolm Moss (Conservative, North East Cambridgeshire)

Why is the Minister talking about two consecutive three-year prevalence studies? Why cannot a prevalence study on category A machines in regional casinos and the FOBT research that is currently being undertaken run together in the first three-year period? I am not sure that I understand why there must be another three years after the first three years.

Richard Caborn (Labour, Sheffield Central)

We have never said that they would be coterminous; we have said that there would be two prevalence studies. Our view, which probably now needs to be defined a little more clearly, is that they will not run in parallel. They will run not consecutively but in two three-year periods. That was and still is our intention. We believe—as indeed does the House—that that period is necessary to be able to make a sound decision, and we will bring back that information.

Malcolm Moss (Conservative, North East Cambridgeshire)

I need to get on the record exactly what the Minister is saying, because I am still very confused. Is he talking about studies of the eight regional casinos? Do they come into that trial and study period? If so, it will be three to four years before the first regional casinos are up and running. He then talks about six years added to that—so, 10 years is that? I have notes from one of the American casino developers which say that three years is too long. If the Minister is talking about 10 years, the Government can say bye-bye to any future investment from worldwide casino developers.

Richard Caborn (Labour, Sheffield Central)

There is a slight contradiction here: we are being accused on one hand of attracting American money, and on the other of ensuring in a systematic, transparent way that the American developers do not come to this country. I do not accept that argument. The prevalence studies are national studies on gambling behaviour. We are moving into a different era. I say again for those who have seen what has happened in Australia and other countries, we want to be absolutely clear on how we take this nation forward in this area. Therefore, we will be very cautious.

The prevalence studies are important to informing the House of Commons and Parliament so that they can make a sound decision. The hon. Member for

South-West Hertfordshire asked me to spell it out. He may not like it, but I have now spelled it out in very clear terms. We believe that as national studies of gambling behaviour the prevalence studies need three years and then a further three years to get the advice and evidence that is necessary for the House to make a sound decision.

Don Foster (Liberal Democrat, Bath)

Notwithstanding the information that the Minister gave the Committee, which will be of concern to many, will he confirm that, despite the lack of new regulation on the matter for the period that he described, it would be perfectly possible for the commission to use its powers to pursue the licensing objective to make significant changes to the way in which any of the machines in any of the categories are operated, given that the commission will have powers in relation to prize, frequency and so on?

Richard Caborn (Labour, Sheffield Central)

The answer to that is: ''No, it will not.'' It will not have that power other than if harm has been proven and the commission came back. It can then intervene. However, in terms of increasing numbers and payouts, the answer is, ''No, it will not''. As we said about the triple lock that we have put on, this is one of those that we are saying clearly needs to be spelled out to give reassurance to people that those things are not going to run away.

Don Foster (Liberal Democrat, Bath)

What if the commission were to obtain, by whatever means, evidence that has not necessarily come from the official prevalence studies but from other sources—perhaps from GamCare—that there needs to be a change in, for example, the level of prizes? My understanding from what the Minister told the Committee some weeks ago is that, through discussions with the Secretary of State, the commission would be able to lead to changes being made in the prize or frequency with which machines operate. That was my clear understanding. Is the Minister now saying that the commission will be barred from taking any such action for the six-year period?

Richard Caborn (Labour, Sheffield Central)

The commission cannot do it itself. [Interruption.] Sorry, that is not what the hon. Gentleman said. Let me put it on the record. It can recommend to the Secretary of State, who can then vary, but it will be the Secretary of State coming back to the House of Commons. That is what I believe the House of Commons was saying clearly in that Second Reading debate.

Richard Page (Conservative, South West Hertfordshire)

The Minister has now got me thoroughly confused. Does that mean that, if the gambling commission recommends something that the Secretary of State likes in the six-year period, that recommendation can be implemented in less than six years, but the prevalence studies cannot be implemented in that six-year period? I am muddled of South-West Hertfordshire.

Richard Caborn (Labour, Sheffield Central)

There can be a variation on a Secretary of State recommendation, but the policy is to wait for six years. So, the policy that we are setting now is that there can be variation. I take that, because we cannot move on six, for example. What the House was saying clearly on the question of the eight regional casinos and, indeed, what we eventually said on things such as that, that will not move. That is what the real concern is.

If we are talking about variation in terms of opportunity on a recommendation from the gambling commission, let us be clear what we are saying. In terms of policy, there will be no movement. In terms of variation in that policy, that would mean, if one wanted to do that under the Gaming Act 1968, that one always had to come back because it could make recommendations to the Secretary of State.

Don Foster (Liberal Democrat, Bath)

May I remind the Minister that we are debating clause 220, which defines the four categories of machines with their various subcategories? It defines the stakes and prizes that would be allowed for each category.

My question was whether we could get clarification that the Secretary of State could, before the six-year period is out, receive advice from the gambling commission that some change should be made to the amount paid in respect of the use of the machine, the value of prizes, the nature of prizes and the premises where machines are used. Those are the categories covered in the clause. If the gambling commission, based on whatever evidence it has, makes a recommendation to the Secretary of State that a change be made to various aspects of the various categories, can the Secretary of State, if she or he is so minded, make regulation subject to approval by both Houses of Parliament to make those changes in a period shorter than six years?

Richard Caborn (Labour, Sheffield Central)

The answer to that is yes. The confusion arose when we were talking about prevalence studies. A prevalence study goes much wider—I want to be absolutely clear about this—than categories of machines. People were challenging us on the question of regional casinos and there are eight regional casinos. That is policy, and it will stop for that six-year period. On the question of variation within that—that is, categories of machine—the answer is yes, on recommendation to the Secretary of State, and yes, in the House of Commons.

Nick Hawkins (Conservative, Surrey Heath)

I want to raise two quick points. Yesterday, awards were given out by the Plain English Campaign and I shall take the Hansard containing the Minister's contributions on this point and submit it, so that he is a nominee for the awards in 12 months' time for lack of clarity in Government statements.

I also wanted to tell the Minister that when I popped out of the Committee Room just now, I found a large briefing document on the Government's latest amendments on the message board, which includes guidance from the Government on clause 226. We shall come shortly to that clause, which affects gaming machines of categories C and D. As we have had a wide-ranging debate on all aspects of categorisation, I

wanted to find out from the Minister whether he has ensured that all Committee members have that document. If I have only just picked one up from the board, and if it affects clause 226, to which clause 220 makes overarching reference, all Committee members ought to see it. I do not know whether that is a point of order, Mr. Pike.

Peter Pike (Labour, Burnley)

Order. Do not confuse the Chair by referring to clause 226. We shall have to consider where we are on that matter. I received several papers on different amendments earlier today.

Richard Caborn (Labour, Sheffield Central)

The Chair will have to determine whether that has been made available to Committee members. I cannot answer that question. I shall probably be here during the next Session of Parliament to answer such questions; the hon. Member for Surrey Heath (Mr. Hawkins) might not. [Interruption.] If the hon. Gentleman wants to bash it around a bit, fine—we will all start bashing it around a bit.

Clause 56 deals with the reserve powers referred to by the hon. Member for Bath. He asked why we needed similar reserve powers for category A machines, which children cannot play. The reason that we have taken the powers under clause 56 concerns the age of those using category D machines. We do not need the reserve powers as far as others are concerned.

Malcolm Moss (Conservative, North East Cambridgeshire)

I just want to make absolutely certain that I have this right in my simple mind. Subsection (4) allows regulations to be made about the amount paid in respect of the use of a machine, which is the stake; the value of the prizes, which is the payout; the nature of the prize, whether it is a cuddly toy or cash, and the premises where the machine is used. Those are critical points, which relate to everything we have discussed for the past several hours—category A, B, C and D machines, what they pay out, how much one can bet and where they are located.

Is the Minister saying that at any time the gambling commission can revisit all the arguments we have deployed since 10 o'clock this morning and make recommendations to the Secretary of State for changes to be made? Can that happen at any time once the gambling commission is up and running?

Richard Caborn (Labour, Sheffield Central)

The answer to that is yes. It can make any recommendation it wants to the Secretary of State, and if he or she believes that the recommendation should be put to the House, that can be done by statutory instrument. However, the final decision rests with the House.

Mark Prisk (Conservative, Hertford and Stortford)

I am not clear whether the Minister has finished.

Richard Caborn (Labour, Sheffield Central)

I thought the hon. Member for North-East Cambridgeshire (Mr. Moss) wanted to reply.

I shall return to my point about category D machines and clause 56. The reason we have adopted the powers under clause 56 relates to the age of children playing. Maximum prizes have been reduced from £8 to £5 because machines with non-monetary prizes encourage people to play again. We have

reduced the temptation to play, and that was generally accepted across the piece. With non-redeemable and non-monetary prizes, the maximum stake can be 30p.

On BACTA, when I previously had responsibility for gambling, the number of concessions we made in trying to ensure the viability of seaside arcades in relation to what we got from Budd and the White Paper, ''A Safe Bet for Success'', was considerable. One concession we made was on 30p for non-monetary prizes. We had extensive discussions with BACTA. If, at the end of the day, BACTA's only problem and greatest objection is over a £5 teddy bear and an £8 teddy bear, quite honestly, I do not believe that that will bring down family arcades.

Mark Prisk (Conservative, Hertford and Stortford)

The Minister seems to say that the matter is of no great concern. However, may I ask for his response to the point made by my constituent, Mrs. Elliott, who runs Lakeside Superbowl? It employs 25 people, and the machines are crucial, because they represent 20 per cent. of her revenue. We wrote to the Minister on 28 October and have yet to receive a reply. Nevertheless, I ask him to respond to that point positively and to realise that it means people's livelihoods. That lady employs real people. In this case, they are not at the seaside, but they are still important jobs in small businesses that are struggling with the regulations he is proposing.

Richard Caborn (Labour, Sheffield Central)

When I had that portfolio, we had extensive discussions. Those particular machines may represent about 20 per cent. of revenue, but moving from £8 to £5 does not mean that that part of the marketplace will disappear. That is not the case as far as I understand it. We accept that an £8 teddy bear is desirable, but we conceded 30p—from 10p to 30p—for non-monetary prizes in part of those discussions.

Bob Russell (Liberal Democrat, Colchester)

I ask the Minister not to change any minds today, because he is clearly in his stubborn mood, but to reflect on category D machines and cuddly toys as well as the £5 payout. Does not he accept that, although the headlines will be about super-casinos, the reality in many communities will be the loss of the fish and chip shop caused by the loss of an important part of the turnover and profit of that enterprise?

Furthermore, perhaps the Minister can tell us when the value of the cuddly toy was fixed at £8, and will he also explain who will determine the value of the £5 cuddly toy? Is it the retail value, the manufactured price, the discounted wholesale price or the unit price per item as purchased by the person running the amusement arcade? I can think of at least four definitions of how to reach £5, and I am sure that the industry will find others.

Richard Caborn (Labour, Sheffield Central)

The industry may. Clause 322 defines the value, so if the hon. Gentleman would like to wait until then, we can have another debate about teddy bears. Anybody would think that the greatest thing on this Bill was £5 to £8 teddy bears and that the whole viability of seaside resorts rested on teddy bears at £8.

Don Foster (Liberal Democrat, Bath)

Given that the Minister has a detailed knowledge of the Bill, as judged by his answer, will he tell us where in clause 322 that definition is explained? My reading of the clause is that the definition will be by regulation. Do we have a copy of the draft regulation in order to answer my hon. Friend's question?

Richard Caborn (Labour, Sheffield Central)

When I come to clause 322, I will answer those questions. That would be the most appropriate time to answer them, unless I get an answer quickly now. The answer is in a regulation because it is so complex, but that is the answer I will give when we get to clause 322. When we get there, I will explain how we will deal with the value of £8 and £5 teddy bears. We will enshrine it in regulation, and it will be laid clearly before the world.

I do not know about the hon. Member for Surrey Heath not being told about some of the information he needed for the debate, but The Guardian reported this morning, ''Tories raise stakes over bingo.'' We were informed that their ex-colleague asked them to table some amendments this morning. That is the headline in that paper. At least we had some knowledge, but not to worry because the report quotes the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) explaining that the amendments were only ''probing amendments'' from the Tories.

Question put and agreed to.

Clause 220 ordered to stand part of the Bill.

Don Foster (Liberal Democrat, Bath)

On a point of order, Mr. Pike, given that I suspect that you will include clause 226 in the list of clauses that you seek to put together, I ask you to reflect on the request that has already been made that before we move on to that clause copies of the document referred to by the hon. Member for Surrey Heath should be made available to all members of the Committee. I certainly wish to raise a number of points on that clause.

Peter Pike (Labour, Burnley)

I note what the hon. Gentleman says and I will leave clause 226 at the moment. If anyone shouts out when I mention any of the clauses, I will take that clause separately. I will put clauses 221, 222, 223, 224 and 225 together. The question is that those clauses stand part of the Bill.

Mark Prisk (Conservative, Hertford and Stortford)

On a point of order, Mr. Pike. We would like to raise some questions.

Peter Pike (Labour, Burnley)

On which clauses?

Mark Prisk (Conservative, Hertford and Stortford)

In my case, as I indicated, clauses 221, 222 and 223.

Peter Pike (Labour, Burnley)

I will take them separately and then anyone who wants to make a point can do so. I am sorry; I misunderstood. I thought that the hon. Gentleman was nodding in agreement to taking the clauses en bloc. It was my misunderstanding.Clause 221 Adult gaming centre

Clause 221 - Adult gaming centre

Mark Prisk (Conservative, Hertford and Stortford)

Perhaps members of the Committee will be disappointed to learn that I shall not detain them too long on the clause. It is concerned with factual but nevertheless important issues which I hope the Minister can help us to clarify. That would certainly be an improvement on the previous clause.

On the definition of an adult gaming centre, I assume—again, I may be wrong—that the age that we are referring to is 21. I am certainly no expert in that field. Will the Minister confirm that that is the case and identify where that is set out in the explanatory notes, because I failed to find it? Further to that point, I notice that, in contrast to clause 222—which I will address in a moment if I catch your eye, Mr. Pike—this clause clearly states that

'''adult gaming centre' means premises in respect of which an adult gaming centre premises licence has effect.''

It is the premises licence that I am concerned with. Will the Minister confirm the nature and characteristics of the conditions of that premises licence? Is there any differential in relation to the other form of comparative licence that an operator would clearly have to seek?

Richard Caborn (Labour, Sheffield Central)

Let me outline what we mean by the clause. It relates to premises where an adult gaming centre premises licence has been granted. The adult is 18 years of age, not 21 years of age. Such a licence is available to premises that use category B machines. If adult gaming centres wish to offer category B machines, they must obtain a premises licence. That is the criterion. If an arcade wishes to offer only category C machines, it can apply for a family entertainment centre premises licence.

Mark Prisk (Conservative, Hertford and Stortford)

I am grateful to the Minister. That has helpfully put a number of important aspects on the record.

Question put and agreed to.

Clause 221 ordered to stand part of the Bill.

Clause 222 - Family entertainment centre

Mark Prisk (Conservative, Hertford and Stortford)

As with the previous clause, I have just a couple of issues. Clearly, the definition of a family entertainment centre is wide. According to my understanding, the insertion of the word ''and'' in the middle of the clause means that it goes beyond those areas that are licensed. It states that

''In this Act—

'family entertainment centre' means premises (other than an adult gaming centre) wholly or mainly used for making gaming machines available for use, and

'licensed family entertainment centre' means premises in respect of which a family entertainment centre premises licence has effect.''

On initial reading, I assumed that that meant that those were two distinct things. I am not sure that that is the case and it would be helpful if the Minister clarified the matter. In doing so, will he confirm the scope of what we are talking about? I anticipate that, as the way in which the enjoyment of shopping and leisure activities changes, there will be an overlap in the nature of the premises. Many members of the Committee will be familiar with the fact that many shopping malls now have leisure elements in their operation. One question is what is determined as the premises.

Admittedly, I come to the issue as a chartered surveyor who is concerned about how to define the hereditament in such cases, but I want to make sure that we understand the scope of the legislation. Does it include leisure centres? Does it include the leisure element in a retail centre? Does it include resorts, which were referred to earlier by the hon. Member for Glasgow, Maryhill (Ann McKechin), who talked about destination resorts? So, in responding to this short debate, will the Minister elaborate on what he understands to be included in the family entertainment centres that he seeks to regulate?

Richard Caborn (Labour, Sheffield Central)

Clause 222 provides two definitions: one for family entertainment centres, the other for licensed family entertainment centres. Those cover certain types of machine arcades and amusement centres. If premises are not in an adult gaming centre and they are wholly or mainly used for providing gaming machines, they will be a family entertainment centre. That distinguishes premises such as a pub or a club, which have only a few gaming machines, from premises such as arcades, whose main business is gaming machines.

However, there are two types of family entertainment centre under the Bill: one that offers just category D machines and one that offers category C and D machines. If a family entertainment centre wants to install category C machines, it must get an operating licence from the gambling commission and a premises licence from the local authority. It is those family entertainment centres that are known as licensed family entertainment centres. Category C machines will have to be sited in an adult-only area that is properly supervised, as required by clause 44(7).

If, however, a family entertainment centre wants to operate only category D machines, all it requires is a permit from the local authority. Clause 231 provides the procedure for getting those permits and clause 222 sets out the definition of family entertainment centres that are licensed and those that are not.

The premises will be the specific area. They can be part of a larger complex such as a shopping centre, but the gambling will always be separated from the retail side. There will be a clear distinction. We can see such a distinction if we look at motorway service stations, as they have been dealt with clearly in terms of both the area and the classification inside that area.

Mark Prisk (Conservative, Hertford and Stortford)

May I take it that there will be a plan that distinguishes the licensed area from the unlicensed area?

Richard Caborn (Labour, Sheffield Central)

Yes. Operators will be licensed in that part of the building that has either category C or category D machines in it, but not in the whole building.

Question put and agreed to.

Clause 222 ordered to stand part of the Bill.

Don Foster (Liberal Democrat, Bath)

On a point of order, Mr. Pike. On the issue that I raised a few minutes ago, I have now found that not only has one copy of the amendment been sent to me by the Department but that, for some bizarre reason, it has generously sent me two copies.

Richard Caborn (Labour, Sheffield Central)

One is for Mrs. Foster.

Don Foster (Liberal Democrat, Bath)

She will be delighted to receive it. It is longer correspondence than she has got so far. Mr. Pike, may I have your assurance that there will be a sufficient period in which to read the document? It is lengthy.

Peter Pike (Labour, Burnley)

Which clause does the document relate to?

Don Foster (Liberal Democrat, Bath)

It relates to clause 226, which is coming up shortly.

Peter Pike (Labour, Burnley)

There are no amendments to clause 226 on today's amendment paper. We will therefore consider whether clause 226 will stand part of the Bill as it is.

Don Foster (Liberal Democrat, Bath)

Some of the material in the new amendments, which as you rightly say, Mr. Pike, deal with other parts of the Bill, nevertheless have a bearing on clause 226.

Peter Pike (Labour, Burnley)

No amendments have been tabled to clause 226 for consideration today, so I have to put the question on the clause as it is. It might be helpful if the Minister wrote to hon. Members about what he intends to do, but I can only follow the amendment paper as it is.

Nick Hawkins (Conservative, Surrey Heath)

Further to that point of order, Mr. Pike. Just after we adjourned for lunch, the Government produced a document with around 10 pages of explanatory notes and a covering letter relating specifically to clause 226. As I understand it, the hon. Member for Bath simply wants a short suspension to enable all hon. Members to read the Government's explanatory notes and to see how they relate to clause 226. Would you consider a request made jointly by the hon. Gentleman and I—I suspect that my hon. Friend the Member for South-West Hertfordshire, among others, would also support such a request—for some time to enable us to look at what the Government are proposing in a clause that we are about to come to? Would it not be appropriate for us to have a chance to look at that?

Richard Caborn (Labour, Sheffield Central)

May I try to help? If the document says clause 226, there has been a typing error.

Nick Hawkins (Conservative, Surrey Heath)

It says clause 226.

Richard Caborn (Labour, Sheffield Central)

It should say clause 266. Perhaps we could have a short suspension, Mr. Pike, because I am bemused and do not quite know what the document says. If we suspend briefly, I might be able to settle the matter very quickly.

Peter Pike (Labour, Burnley)

The Committee will suspend for 10 minutes.

Sitting suspended.

On resuming—

Mark Prisk (Conservative, Hertford and Stortford)

On a point of order, Mr. Pike. I wish to register the strongest concern of Her Majesty's loyal Opposition to the way in which matters are unfolding. Six pages of the new schedule were presented to us less than 24 hours ago and, as a member of the Committee, I have had only two minutes in which to consider the amendments. While I understand that the Government's argument is that there is a tidying-up element to certain parts of the Bill and that we will have the opportunity on Report to address the matters, members of the Committee will know that the truth is that there will be no time in which to do that. We are worried that the quality of the scrutiny that will be permissible will be inadequate. I seek your guidance.

Peter Pike (Labour, Burnley)

I do not think that we shall be debating such matters today. The Government are trying to be helpful by addressing the issue, but I have to call the amendments in the order in which they are selected. We are not likely to reach the amendments to which the hon. Gentleman referred today.

Mark Prisk (Conservative, Hertford and Stortford)

Further to that point of order, Mr. Pike. Without wishing to disagree with you, I have scanned the details and it is clear that category C and D gaming machines are referred to and will be affected in substance. I entirely accept your point, but I wish to register our concern that the process that we are undertaking is inadequate and that the industry will see that the Bill will probably be inadequate, too.

Peter Pike (Labour, Burnley)

I understand the hon. Gentleman's point, but it is obviously not for the Chair, but for the Government. I am sure that the Minister has taken note of what has been said.

Richard Caborn (Labour, Sheffield Central)

The hon. Gentleman will understand that we are responding to what the industry has said, especially about the licensing authorities under the Licensing Act 2003, as against the provisions in the Gambling Bill. We are trying to be helpful to licensing authorities and to make sure that nothing falls between the two pieces of legislation. The amendments will deal with the concerns expressed by the industry and will put a belt and braces on the situation.

Opposition Members have asked us to reassure small and medium-sized businesses and that is exactly what we are doing, because we can envisage a different

interpretation between two pieces of legislation. By tabling the amendments, we are responding to the industry. I am sorry that we have not been able to draft them before now, but when two Acts of Parliament are brought in broadly at the same time, crossovers have to be dealt with.

Nick Hawkins (Conservative, Surrey Heath)

Further to that point of order, Mr. Pike. I hear what the Minister says, but we are talking about the problems that may affect small businesses, the point to which my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) referred earlier. It is significant to consider the position of small businesses that have an on-premises alcohol licence and may have category C or D machines, as referred to in the paragraph in the explanatory notes on clause 226. My worry and that of my hon. Friend the Member for North-East Cambridgeshire, who dealt with the Licensing Bill, is that many of the Government's promises specifically to local authorities when the Licensing Bill was introduced have flagrantly been broken.

Peter Pike (Labour, Burnley)

Order. I do not want us to debate the Licensing Bill.

Nick Hawkins (Conservative, Surrey Heath)

No, I am not going to go down that track. I simply want to say that the reason that so many Opposition Committee members have concerns about the Government coming forward at the last minute with further changes and explanations about the interlinking of premises where alcohol is sold with the new gaming licensing regime is that local authorities, particularly small boroughs such as mine in Surrey Heath, are very upset about the fact that they have been penalised by the Government breaking their promises over licensing.

It is because of those broken promises and the concerns that we all have on behalf of small businesses in our constituencies that we are particularly anxious that the Government, having broken one set of promises that they made, are not allowed to get away with skating through last-minute changes to this legislation, with explanatory notes being produced at the final moment. I hope that the Minister recognises that there is a serious and genuine concern about what might happen the next time the Government want to make further changes. Committee members must have the explanatory notes before we address any further group of amendments that the Government want to introduce while the Bill is being considered.

Mark Prisk (Conservative, Hertford and Stortford)

One of the difficulties, which was referred to this morning, is that the Department for Culture, Media and Sport and its officials are conducting a series of negotiations in parallel with this Committee's scrutiny process. There is a danger in that: it has limited the opportunity for the Committee to effect its scrutiny properly—to have the necessary time and so forth—because things have been happening almost simultaneously. That is why the process is inadequate, and what we are discussing is a symptom of that inadequacy.

Peter Pike (Labour, Burnley)

Let us get on with the Bill now.

Richard Caborn (Labour, Sheffield Central)

In defence of my officials and of what we are trying to do, any Members who have scrutinised legislation before will know that things happen as legislation is being taken through Parliament. Moreover, two or three pieces of legislation dovetail with this Bill. A new licensing authority is being formed within local authorities. It is inevitable that those affected will be concerned. We have responded to that. In keeping with the conventions of Parliament, we have tabled these amendments and there will be a full debate on them on Thursday, if we get that far, when concerns will be addressed, and people will have been able to digest the information that we have put before them. We believe that that is in keeping with the conventions and rules of Parliament that ensure that scrutiny can take place.

Peter Pike (Labour, Burnley)

Certainly, everything is in order. The Opposition have made their point. The Government have the right to table amendments at any stage, even when the legislation reaches the other place. Let us make progress now.Clause 223 Prize

Clause 223 - Prize

Mark Prisk (Conservative, Hertford and Stortford)

I can give Committee members time to digest other information by raising a couple of further points with the Minister.

The clause deals with what is a prize. According to the clause, it includes

''any money, article, right or service won''.

Committee members will understand the points about the money or article, and I would not dare to drift in the direction of cuddly toys unless I wished to incur your wrath, Mr. Pike. However, I am concerned about the terms ''right'' and ''service''. At one extreme, I assume that service could include a prize such as a holiday. I doubt that that is the case in this instance, but for the industry's benefit, and so that we all know where we stand, I would be grateful if the Minister told us what he understands as falling within that definition.

Similar questions arise with regard to ''right''. I can imagine that there might be a prize that is the keys to the front door of your new home. That might be a legal right; it might be a property right. Again, I doubt whether it is correct in this context. However, it would be helpful if the Minister provided guidance as to exactly what he includes within that, because it is clear that the prize could be very significant.

On those two straightforward points, I hope that the Minister will be able to offer clarification.

Richard Caborn (Labour, Sheffield Central)

The clause defines ''prize'' in relation to a gaming machine. The definition includes money, articles, rights or services won. It is a deliberately broad definition to ensure that the prize limit set for the gaming machines covers any benefit or reward offered by the machine. However, under the current law, an opportunity to have another free go at the gaming machine does not count as a prize and the

clause maintains that position. A ''right or service'' could mean a holiday and someone still has to be gambling to win any benefit, so the answer to the question that I was asked is yes. If one wants to put those prizes up, they can be put up, although I doubt whether that would include the front-door keys to Mr. Pike's house. We believe that that explains the word ''prize''.

Mark Prisk (Conservative, Hertford and Stortford)

The Minister knows that I was not hoping to offer your good home to punters, Mr. Pike. I was seeking an explanation of the broader point, and I am not sure that the Minister provided it, of whether the word ''right'' includes a legal right for someone to win a home—in this case, the documentation.

Richard Caborn (Labour, Sheffield Central)

Yes.

Question put and agreed to.

Clause 223 ordered to stand part of the Bill.

Clause 224 - Use of Machine

Malcolm Moss (Conservative, North East Cambridgeshire)

Subsection (1) provides the option for the Secretary of State to

''make regulations controlling the circumstances in which a gaming machine is made available for use.''

In simple terms, there are different types of machine. Some are based on a random chance; in other words, the chance of winning on every game is the same, so the fact that a previous player happens to have had a big win on a particular machine will not alter the likelihood of a payout on the next game. That is one category of machine.

The other category is machines of a managed non-random nature, and amusement-with-prizes machines fall into that one. They allow the operator to determine the exact price value of payouts over a certain period, as opposed to merely setting the probability of payouts. If an AWP machine has paid out a large sum early on in a period, the money that it will pay out, and thus the probability of winning, is reduced.

There is a strong case for including some reference to the randomness of a particular machine in the clause. Perhaps the Minister will explain to the Committee why it was appropriate to omit it. It is not included in the regulations that the Secretary of State may bring to bear. I believe that the idea that gaming machines should be random was accepted in the Budd report, yet no reference to randomness appears in the clause.

The Secretary of State may make the regulations, but it is important that, before they are introduced, she should refer to empirical research on the impact of any strategy and the risk of unintended consequences, which may, of course, outweigh any intended benefits. The clause lacks any reference to the randomness of the machines about which the Secretary of State may

make regulations or to the fact that before regulations are made there ought to be reference to empirical research.

Mark Prisk (Conservative, Hertford and Stortford)

Does my hon. Friend share my concern about the nature and intent of paragraph (e)? It refers to ''the display of information''. Does he have any views about why the Government might wish to include such a reference?

Malcolm Moss (Conservative, North East Cambridgeshire)

I have to be entirely honest with my hon. Friend and say that it had not crossed my mind that that was a problem. Obviously, he has seen more than I did. No doubt, when he has the opportunity to get to his feet, he will explain to us what he thinks on the matter. I had no problem with that paragraph; my hon. Friend needs to make his own points at the appropriate time.

Nick Hawkins (Conservative, Surrey Heath)

My point is slightly different from those made by my hon. Friend, although, of course, I agree with what he just said.

During the Committee proceedings, a number of us, including my hon. Friends the Members for North-East Cambridgeshire and for South-West Hertfordshire, have raised the large number of things in the Bill that are left to secondary legislation. My hon. Friend the Member for South-West Hertfordshire is particularly good at making the point that statutory instruments are nodded through, on a take-it-or-leave-it basis, without our having any ability to amend them. Any Government with a large majority can force such things through the House.

Is there any chance of the Minister telling us that he and his advisers will do their best to let Committee members—and all hon. Members—see the regulations relating to clauses 224 and 225, at least in draft, before Report and Third Reading, and before the Bill goes to another place? That would be helpful. It is particularly important that the regulations controlling the circumstances in which gaming machines are to be used are drafted. I say that for the sake of the successful manufacturing industry in this country, members of which I have met regularly during the past 12 or 13 years at BACTA conferences and the successful Amusement Trade Exhibition International show.

The industry should know what the regulations will look like before Report and Third Reading, and before the Bill goes to another place. If it becomes law and the regulations are causing problems for the hard-pressed manufacturing industry and the operators, we will not have the opportunity to debate the regulations—it will be too late. I earnestly plead with the Minister and those who advise him to show all hon. Members at least a rough draft of regulations relating to this part of the Bill, because that would be helpful. I hope that if the Minister cannot undertake to do that, he will write and say that he is prepared to show us, the Committee members, a rough draft.

This Bill has been so long in gestation that I cannot believe that there are not some people somewhere in the Department who have not prepared an early draft

of the regulations for the use and supply part of the Bill. When my party was in government, I worked in the predecessor to the DCMS, the Department of National Heritage, as a Parliamentary Private Secretary, so I have some understanding of how the Department used to work.

Richard Page (Conservative, South West Hertfordshire)

Perhaps I can follow in my hon. Friend's footprints, because I have expressed concern about the regulations and the power that the Bill will put into the hands of the Secretary of State. As my hon. Friend said, clauses 224 and 225 are another example of such a power.

I shall not read a comprehensive list from the Bill. If I were filibustering, I could read all the clauses bit by bit, up to clause 224, where the Secretary of State has a ''may'' rather than a ''shall'' power.

Eric Illsley (Labour, Barnsley Central)

Go on then!

Richard Page (Conservative, South West Hertfordshire)

The hon. Gentleman tempts me.

Peter Pike (Labour, Burnley)

Order. The Chair does not.

Richard Page (Conservative, South West Hertfordshire)

I know where the power lies in this Committee and I will not upset the Chairman, Mr. Pike.

Clause 4 is a ''may'' clause; clause 7 is a ''may or shall'' clause; then it goes a bit quiet until clauses 35, 36, 44, 52, 56, 74, 84, 88, 96 and 120.

The rest of the debate is in Hansard.