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Mr. Jones: Will my right hon. Friend clarify a point? What would prevent a casino operator from selling or changing ownership of a licence before the casino was built?
Mr. Caborn: Whoever they were selling to would have to have an operating licence from the gambling commission. That would be a commercial deal, and it would be discussed with the various operators and people concerned. It would be a normal commercial transaction.
Mr. Jones: So, a casino operator with a premises licence would have a commercially saleable product. I accept my right hon. Friend's point that it would have to be sold to another casino operator, but the provision is creating a product with quite a lot of value.
Mr. Caborn: Very much so. It will be for the local authority to ensure that it gets that value from the negotiations between it and those who hold the licence. The panel will make a decision for a regional casino in area X. Those who want to will bid in the competition and it will up to the local authority to award the premises licence. The local authority will determine what it wants for its community, and when the premises licence has been issued, whoever takes it on will have to deliver what was agreed when it was granted, whether to operator A or operator B.
Mr. Hawkins: As the Minister knows, I and many other Committee members, not least Labour Members, have been concerned about ensuring that we get the regenerative effects of any new casino development. I want to hear him say that there is a mechanism whereby a local area, such as Blackpool, will have some guarantee of getting the regenerative benefits of what the Government are doing. The Government seem to be handing over the third revision of the Bill with no guarantee that the regenerative benefits that so many members of the scrutiny Committee wanted to be achieved will flow from the legislation.
Mr. Caborn: I must stress yet again that we are doing what we are doing to ensure that we approach the development of such casinos cautiously, mainly because of social responsibility. There is no doubt about that and that is why the gambling commission is the first port of call in giving licences to ensure that fit and proper people operate a licence. Beyond that, and as I made absolutely clear when moving some amendments this morning, that regeneration will be
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subject to local authority negotiation, and there are no better people to negotiate such regeneration and decide who should have one of the 24 licences. Anyone who gets one of the eight regional licences will be in a competition, which will, to a large extent, be conducted by local authorities. I have said that we will discuss with the Local Government Association and others how to implement those criteria to ensure that it is transparent and fair.
Mr. Hawkins: The point that I have made to the Minister—not just once, but on a number of occasions—is that surely in this overarching legislation that is creating the new structure, it is for the Government to provide the mechanism by which local authorities can get the money. Given his answers to the hon. Member for North Durham, when a company has satisfied the basic minimum requirement of being a fit and proper company—I see the hon. Gentleman nodding—the whole thing can be shifted to another company that may be fit and proper but has no intention of providing the regenerative benefits. That is the difficulty. By failing to provide a mechanism in the Bill to ensure that the money goes to regeneration, the Government have sold the pass. They are handing the whole problem over to local authorities.
Mr. Caborn: The hon. Gentleman has totally misunderstood what I said. I am saying that the local authority will give a premises licence or a statement of premises licence, which will contain all sorts of conditions that I have just outlined and may include regeneration or investment. It is best for the local authority to do that by way of a competition. The criteria will be clearly laid out by the local authority, the negotiation will go ahead and whoever has signed up to operating the premises licence will have to deliver. That is why I said earlier that the premises licence might not be granted totally until the project is up and running. That provides the added leverage—an added stick—to ensure that the project is completed. Whoever takes responsibility for the licence will have to carry out that work.
Mrs. Humble: I want to clarify one point. As I understood the Minister's earlier comments, the independent panel will be working against criteria that include economic regeneration as a key element. In allocating the eight licences for the regional casinos, the panel will look at economic regeneration; take cognisance of the regional spatial strategy; and make recommendations to the Government, who will determine where those eight regional casinos will be. With the key aspect having already been identified by the panel and the Government as economic regeneration, the local authority will then examine the competition to ensure that it maximises that benefit. Have I painted the right picture?
Mr. Caborn: My hon. Friend is absolutely right. There will be a written agreement, as stated in paragraph 5(3)(b) of new schedule 3. The authority
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''may enter into written agreement with an applicant, whether as to the provision of services in respect of the authority's area or otherwise''.
There will be a written agreement, whoever is the operator. If there is a sale from one operator to another in the intervening period, as long as they are licensed by the gambling commission and take on the full conditions on which the premises licence has been issued, the sale will be permissible.
Mr. Jones: I have to say that in my experience that approach is fine in the purest sense, but in practice once somebody has a premises licence, they have a marketable commodity that they will sell for a large sum of money. They will have created a valuable asset, which might be worth millions of pounds. I accept that they might wish to pass it on or transfer it to somebody with a casino who is approved by the commission, but in reality and from my experience, if the new operator says, ''We cannot afford to do X, Y and Z,'' a gun is held to the head of the local authority, which has to take it or leave it.
Mr. Hawkins: That is the real world.
Mr. Caborn: The real world is what it is. In the real world, the competition for eight regional casinos will be pretty intense. If the reaction caused by us limiting that competition is anything to go by—people want more than that number—there is no doubt at all in the real world that eight regional casinos are going be pretty successful as a product in the marketplace in Britain.
We can debate that until the cows fetch us, but quite honestly, one makes a judgment based on reality and, looking around the world to where that type of regional casino has been operating, one finds that they are quite profitable. A great concern of the House and the country was that to allow this process to move too quickly might create a lot of problems. We have made the process more potent, not less, in terms of its ability to regenerate and be a financial entity in its own right in the real world.
Mr. Jones: I accept the point regarding the Valhalla in which the Minister lives, but I am concerned to ensure that if someone gets an operator, they do what they are supposed to do. I am sorry, but in practice they will not do it. My right hon. Friend should consider ways to tighten up the process to ensure that what operators offer is delivered. I can see it now: local authorities will face a licence being passed on or sold to another operator, who might suddenly come back to the authority and say, ''Sorry, but we can't afford to do this.'' The authority will have no option but to accept it. My right hon. Friend might want to tighten up the legislation if he wants to ensure that regeneration is the effect of what he is proposing.
Mr. Caborn: On the transfer of conditions, in any commercial deal, the laws of the nation and company laws are laid down. I do not believe that a set of bandits, rather than responsible companies, are operating here. To get a licence through the gambling commission, companies will have to acknowledge their corporate and social responsibilities and show that
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they are fit and proper persons. They will be major companies, not fly-by-nights. If they decide to take over a premises licence, they will have to take over the conditions entered into by the original signatory. I do not believe that such companies will start reneging on those deals. I cannot guarantee that absolutely, but companies entering contractual arrangements with a local authority or a private company can be dealt with through various company laws and the courts of this land.
Mr. Jones: The Minister might want to give the commission power over the transfer once an operator gets its premises licence. If a licence is going to be transferred to another company, the commission might want a veto of some kind over that. At least that would protect what he is trying to achieve.
Mr. Caborn: I do not know whether that would be the right way forward. If there are good reasons for a premises licence being transferred transparently and in a proper commercial way to deliver what the local authority agreed with the original licensee, I see no reason to impose further constraints to stop it. It might be a proper commercial deal that benefits the local authority and others, so we should be extremely careful.
I believe that the safeguards and procedures that we have included in the various stages of the licensing process give adequate comfort to local authorities and the gambling commission. If people transgress, contractual and company laws outside the Bill will ensure that local authorities can get what they deserve.
Miss Kirkbride: I want to be absolutely clear that I understand what the Minister is proposing, so it will be helpful if I tell him what I think he is proposing and he tells me where I am wrong. Is he proposing that the new commission will decide which areas and local authorities get the precious eight regional casinos and then decide which of the operators is to be granted a licence in those areas, or will he allow operators to be granted a licence and then bid to the local authorities to determine who will be given one of the eight casinos? Who will be in the driving seat of allocating the casino operator to the local authority, and what conditions will be set?
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