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Geraldine Smith: Does my right hon. Friend accept the problem of blight on the industry? Many small amusement arcade owners are worried about reinvesting in category D machines because they would become obsolete if children were prevented from using them.

Mr. Caborn: I hope that what I will say will reassure my hon. Friend and other hon. Members. I am trying to balance the debate because alternative arguments have been advanced, which the Government have weighed up before reaching a view.
 
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It has been alleged that the Government are plotting to take the industry by surprise and use the power suddenly to strip away the right of children to use the machines, but that is not the case. With respect, it is a fanciful idea. I remind the House that the Government, in response to the Budd report, reaffirmed the view that children should continue to play these machines, even though chapter 23 of Sir Alan Budd's report showed that he was highly sceptical about whether children should be allowed to continue playing. The Government made their position crystal clear in chapter 7 of the 2002 White Paper, and that position has not changed.

7.15 pm

Sir Teddy Taylor: Would the Minister like to run a business, which is quite a difficult thing to do, if the Government could use reserve powers to put him out of business by simply laying an order before the House of Commons? Surely that is a real problem.

Mr. Caborn: I said in Committee that uncertainty is one of the worst things for a business. If the hon. Gentleman will bear with me, I shall try to clear up that uncertainty.

I am happy to give a pledge today, on behalf of the Government, that we will, of course, never use the power in clause 58 without a strong new body of evidence to support that. We would always consult both the gambling commission and representatives of the industry before coming to the House, as I said clearly in Committee.

We have listened carefully to the debate and strong representations on the matter that my hon. Friends have made over the past few weeks. I appreciate that there are strong views and many legitimate interests, especially among my hon. Friends who represent seaside constituencies. Although I cannot accept the amendment at this stage, I am happy to make a commitment that the Government will review carefully the need for the reserve powers included in clause 58, and that they will report their conclusions and any alternative proposals to the House of Lords if the Bill receives its Third Reading tonight. We need to consult several constituencies with legitimate views on the matter. The Government want to work with the British amusement industry to ensure that it remains an important part of our leisure and tourism industry—yes, the tourism industry, to respond to the hon. Member for North-East Cambridgeshire (Mr. Moss)—and that the leisure and tourism economy have a bright future.

Mr. Hoyle: My right hon. Friend mentioned seaside towns, but does he accept that we also represent theme parks and travelling funfairs?

Mr. Caborn: I do, but I was referring to the strong representations that have been made by Labour Members with constituencies containing seaside resorts. I hear what my hon. Friend says and confirm that we will examine the situation not only in respect of seaside resorts, but of category D machines. Given my
 
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reassurances, I hope that the hon. Member for Maldon and East Chelmsford will withdraw the amendment so that we may report back to another place.

Mr. Hawkins: Although the Minister's words were helpful, he is somewhat friendless on the Government Benches because all three Labour Back Benchers who have spoken were critical of the reserve power. If I may add to the speeches and interventions that have been made, independent research by the Henley Centre concluded that up to a third of family entertainment centres throughout the country could well close as a result of the Bill, if it were not amended. I hope that the Government will decide, on reflection, to remove the clause in another place, and that hon. Members of all parties will send a firm signal to another place and the Government by voting for the amendment this evening.

It is not only clause 58 and the singling out of category D machines, which have been enjoyed by many children for generations, that could damage family entertainment centres, because a raft of measures in the Bill will affect those centres and members of the British Amusement Catering Trades Association and the British Association of Leisure Parks, Piers and Attractions, with which I have worked for many years.

One must consider the cumulative effect of everything that the Government have done. They have reneged on promises that arcades' existing entitlements would all be grandfathered under the Bill. We may come back to that matter later, but the Government's ridiculous guillotining and programming of the Bill may not enable us to debate that, so I mention it now.

Despite previous assurances that they would not, the Government have limited the ability of families to exchange two smaller prizes for one larger one—a long-standing practice in the business known as trading up. The Government set out their intention in the regulatory impact assessment to reduce, in the absence of any evidence to justify it, by 66 per cent. the level of stakes and by 40 per cent. the prize levels available on the lowest stake and prize category D machines, threatening the profitability and viability of many arcades The Government have also refused to implement the normal triennial increase in the levels of stakes and prizes as recommended by the Gaming Board to reflect increases in running costs over the period.

Mr. Simmonds: My hon. Friend is making a series of excellent points. Is he aware that, in seaside resorts such as Skegness in my constituency, the category D machines account for a substantial proportion of turnover and profit in many of the family entertainment centres? The Government seem to think that the machines are a tangential or marginal part of many of these businesses when they are critical to the future dynamism and success of tourist resorts such as Skegness.

Mr. Hawkins: I agree with my hon. Friend. As he knows, in my first five years in the House, I represented Blackpool, where exactly the same concerns exist. It is not surprising that Labour Back Benchers are responding to those concerns. As my hon. Friend the Member for Rochford and Southend, East (Sir Teddy Taylor) pointed out, it is simply not possible to run one
 
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of these small businesses—most are small family concerns—if they have such a threat hanging over them. Once again, it is a reflection of the fact that far too few Ministers in the Government have ever had a single day's experience of running a business. They do not understand the effect of what they have done.

It is exactly the same as the point that was made in the previous debate when we heard the revelation that £500 million was knocked off the stock market valuation of the British casino industry in the 24 hours following the Government's change of policy. It is another example of how they do not care about businesses, large or small, because they have no comprehension of the worries that people running businesses have.

We have seen a chink of light, no doubt influenced by the fact that the Government are aware that many of their Back Benchers are prepared to contemplate rebellion on this issue and that the only Labour Members to speak in this debate have spoken against the clause. The Government may decide in the end that they have this wrong. I certainly hope so. There is every reason to think that family entertainment centres—they are a crucial part of our tourism both inland, as the hon. Member for Chorley (Mr. Hoyle) said, and at the seaside—desperately need the clause to be taken out. I hope that it will be in another place. The Government would be wise to do that.

Sir Teddy Taylor: I hope that the Minister will clarify whether it is his intention to withdraw the clause and remove its effect in the House of Lords or whether he is saying that he will just have another look at it.

I want to make three points. First, I represent Southend-on-Sea where we have a large amusement industry, which is rather different from the casino industry. I had the pleasure of speaking to two Americans who were making applications for one of the gigantic casinos and they seemed to know everything about everything. They belong to massive companies and, to my surprise, they told me that we would have to change the way in which regional casinos were being allocated, because of the decision to give Sheffield one. I pointed out how the organisation had not even been established and how the factors in the Bill had to be taken into account, but they seemed to know everything about everything. I genuinely say to the Minister that if Sheffield, which is the most outrageous place even to be considered for a casino, gets one, my faith in democracy will be undermined. If it does not get one, my faith in the American gambling industry will be undermined.

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