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I am conscious that there has been much legislation on this issue since the ’80s and that aid has been given to councils to help people with funding, which is welcome. I am also conscious that the social sector working party has made recommendations that have been thoroughly considered and were presented last year to Government. I know that others, such as the Joseph Rowntree Foundation, have given good advice. The London leaseholders network has been active, as have the leaseholders forums in my borough. Hon. Members, such as the hon. Member for Regent's Park and Kensington, North (Ms Buck), have made good contributions and commitments in debates, in which colleagues of mine, including my hon. Friends the Member for Hazel Grove (Andrew Stunell) and for Manchester, Withington (Mr. Leech), and the hon. Members for Cities of London and Westminster (Mr. Field) and for Poole (Mr. Syms), and others have participated. I am also conscious that the Department for Communities and Local Government has taken an interest and that the Minister’s predecessor, the right hon. Member for Pontefract and Castleford (Yvette Cooper), came forward with some Government
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proposals recently, two of which are in the Housing Bill that is due to return to the House soon. However, none of those proposals allows buy-back, which we need to get some people out of a financial hole, none of them puts ceilings on bills, and we need that, and none of them gives enough say to people on the process so that they participate in it rather than feel that they are almost passive participants.

I hope that colleagues will support a Bill that will give leaseholders a much fairer deal, that will respond to their continuing concerns—whether they are young, middle-aged or elderly people who are struggling to pay their bills and still feel that we are not listening— and that the Government will be positive about responding to it. I will work with the Minister and colleagues throughout the House, and I hope that we will be allowed to make progress on an important Bill.

2.23 pm

Mrs. Jacqui Lait (Beckenham) (Con): I chair the management company in the leasehold block of flats in which I live, so I have a direct interest in the issue of leasehold. I congratulate the hon. Member for North Southwark and Bermondsey (Simon Hughes) on introducing a Bill that contains many of the thoughts that I have long had on this issue, because, as he acknowledged, I have many public sector leaseholders in my constituency. I also welcome the new Minister for Housing to the Front Bench.

I welcome what the hon. Gentleman seeks to achieve with the Bill. For a long time, I have been concerned that public sector leaseholders do not have the same rights of consultation as they do in the private sector, for which, my goodness, some of us have fought very hard. The best of councils and other social landlords have brought this form of consultation forward informally, but it has taken an enormous amount of hard work to get them to that stage. I acknowledge the work that my housing association is now doing with our public sector leaseholders, but it is still being done only with the head, not the heart and the head. Therefore, I welcome what the hon. Gentleman is proposing on consultation.

The hon. Gentleman’s idea of a sinking fund is interesting. We have tried in my block of flats to establish a sinking fund. It is a very small block, with people who are used to private sector thinking, and it is proving pretty difficult to get such a fund going. I can see difficulties with it, but, as a form of saving by individual leaseholders, it has its attractions.

On the buy-back issue, my housing association has offered to buy back on occasions to sort out some leaseholding and tenancy problems. That can happen if the will is there. I suppose that the hon. Gentleman is trying with the Bill to create best practice, and the more we can push councils and housing associations towards best practice, the better. Local arbitration is also a sensible idea.

I have great sympathy with the drift of the Bill and I hope that it goes into Committee, but there are some major drafting problems. It tends to refer just to council tenants, rather than all tenants. I accept the point that the hon. Member for Cleethorpes (Shona McIsaac) made about the difficulty of the definitions of tenants and leaseholders in law, but I get the
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impression that the Bill applies to all leaseholders, not just public sector leaseholders, so there are some major flaws, which I assume would be dealt with in Committee. However, the general move and the impulse behind the Bill is a good one, and I commend the hon. Gentleman for bringing it forward.

2.26 pm

Mr. Christopher Chope (Christchurch) (Con): I have a lot of sympathy with parts of the Bill because in the days when I was chairman of housing and then leader of Wandsworth council, I think that we were involved in the sale of more leasehold council flats than any other local authority in the country. We were proud of that. We knew that a problem could be caused in future if those leaseholders did not have agreements that were going to be affordable in the long term. There is no doubt that there are issues here, but I am concerned about the process in relation to the Bill.

I looked in the weekly bulletin last Saturday to see whether the Bill had been printed and it had not been. I do not think that it was printed until Wednesday or Tuesday. When it was printed, it was printed without any explanatory notes. Frankly, I do not think that it is reasonable that, with that short period of notice, people should be expected to give it a Second Reading on the nod. I would be much more inclined, using terminology that the hon. Member for North Southwark and Bermondsey (Simon Hughes) will understand, to let it go part heard. The issue was commented on in a sense by my hon. Friend the Member for Beckenham (Mrs. Lait). She said that she thought that the Bill should extend to all leaseholds.

Mrs. Lait: No.


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Mr. Chope: She does not. I am sorry.

Mrs. Lait: I do not want to hold my hon. Friend up, but I think that the Bill does that, as it is drafted, but it should not.

Mr. Chope: My hon. Friend has obviously been reading the submission from the National Landlords Association, because it thinks that the Bill as drafted does apply to all leasehold properties.

Simon Hughes indicated dissent.

Mr. Chope: The hon. Gentleman indicates that it does not and obviously I accept that, but unfortunately because of the procedural shortcomings to which I have referred that is not apparent.

I am also concerned about the position in relation to the bills and cross-subsidies. As the hon. Gentleman said, each of the leasehold properties and the accounts for it must be looked at in isolation. If a scheme is brought in whereby some tenants can defer their payments for substantial periods of time, that will be at someone else's expense. In the private sector, if the lease is worth anything, and most of these leases are worth something, it is possible to get help from a mortgage company. Perhaps in the new climate following the Royal Assent last night to the Northern Rock legislation, it will be possible to get Northern Rock, a state-owned bank, to provide a soft loan, or otherwise, for people who cannot afford their repairs. One can understand why people might want to help those who find it difficult—

It being half-past Two o’clock, the debate stood adjourned.

Debate to be resumed on Friday 13 June.


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Remaining Private Members’ Bills

football spectators and sports grounds bill

Order for Second R eading read.

Hon. Members: Object.

To be read a Second time on Friday 25 April.

forces widows’ pensions (equality of treatment) bill

Order read for resuming adjourned debate on Question [ 1 February ], That the Bill be now read a Second time.

Hon. Members: Object.

Debate to be resumed on Friday 17 October.


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Gaming Machines

Motion made, and Question proposed, That this House do now adjourn. —[Alison Seabeck.]

2.31 pm

Dr. Stephen Ladyman (South Thanet) (Lab): I am grateful for this opportunity to put before the House a matter of particular concern to my constituency. I should begin with an apology to my hon. Friend the Minister. I know from my own experience as a former Minister that for those who draw having to answer the Friday Adjournment debate, it is not usually the highlight of their week; it means cancelling all their engagements with their constituents. I apologise to them and to him, but this is a matter of some importance to people who work in my constituency.

I rise with a feeling of déj vu. In 2001, when the Budd report on gambling was published, many of us in this House—on both sides—worked very hard to explain to the Government what we perceived to be its deficiencies. Had it been enacted in the way that Budd proposed, it would have ended the seaside arcade and amusement machine business very quickly. However, through those debates and all that work in the House, in which many of us were closely involved, the Government came to realise that the coin-operated amusement machine industry was very important, that seaside arcades were a very important part of the traditional seaside offering, and that it was therefore necessary to ensure that an accommodation was reached with the industry such that it could survive.

That accommodation was reached in the end. I do not think that the amusement arcade industry was entirely happy with it, but both it and the Government thought that there was a basis for moving forward and that the industry would survive. Subsequently, the Gambling Act 2005 was passed. Unfortunately, that hopeful attitude has proven not to be well founded. The industry in general is suffering greatly, and I will explain why in a moment.

The reason why this issue is important to me is, of course, that I have a seaside constituency. It includes the seaside towns of Ramsgate and Broadstairs, in which we have a number of arcades. There are also a number of people in my constituency who provide and maintain these machines, and a company, Harry Levy Amusements, that makes quite a few of them. All those businesses are suffering greatly.

I have a personal interest, as well, in making sure that the seaside arcade survives. I have very fond memories of spending a few coins in seaside arcades as a child. It was a fun part of going to the seaside—one played on the beach, had some ice cream and went into the arcade. I do not see why the kids of the future should be denied that pleasure.

How bad is the position? Since September 2007, when the 2005 Act came in, the revenue of adult gaming centres—the part of the seaside arcade where only people aged over 18 can play—has been reduced by 23 per cent. The family entertainment centres that are usually attached to adult gaming centres, and in which anybody can play such machines, have seen a 15 per cent. loss in revenue. Machine suppliers’ income has been reduced by 16 per cent., and machine manufacturers’ trade has fallen by 55 per cent. on average.


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Let me give as a concrete example to my hon. Friend the experience of Harry Levy Amusements, the company in my constituency that makes some of those machines. Since September, its production has dropped by 40 per cent., and its number of employees is 20 per cent. down for this time of year. Usually, by this time of year, 75 people would be working in the factory. At the moment, it has just 50 people working, so 25 jobs have been lost already. Usually, it would take its orders for the year at the major ATEI trade exhibition in January. This year’s orders were 50 per cent. down on last year’s, which were 35 per cent. down on the previous year. My hon. Friend will see that the industry has a serious problem.

Mr. Anthony Wright (Great Yarmouth) (Lab): I congratulate my hon. Friend on securing this timely debate. My constituency, like his, relies heavily during the summer months on family entertainment centres. But it is important to remember the impact not just on family entertainment centres but on the creation of other industry jobs, such as screen printing and manufacturing. Does he believe that that is one of the failures of the Gambling Act, along with the effect on family entertainment centre revenues?

Dr. Ladyman: My hon. Friend is absolutely right, and I congratulate him on his efforts on behalf of his constituents to raise those concerns. A lot of ancillary industries are involved. I have mentioned only Harry Levy Amusements, but that company buys components, parts and services from other surrounding factories, which also experience a knock-on effect.

Miss Julie Kirkbride (Bromsgrove) (Con): The hon. Gentleman makes an important point. I would encourage him to add bingo halls to his list of adult gaming centres and seaside arcades. In my constituency, they have suffered a catastrophic fall in their income for very similar reasons.

Dr. Ladyman: I agree with the hon. Lady. Bingo halls have also been affected by the smoking ban, which I supported and have no objection to, but it has had a further impact on those businesses.

What has happened to seaside amusement arcades? Before the Gambling Act, they were able to operate what were called section 16 machines, which would allow a £2 stake for a £500 potential prize. They were allowed an unlimited number of those. They were competing, however, with licensed bookmakers’ shops, which were allowed to have fixed-odds betting terminals, on which one can gamble as much as £100 on every press of the button for a £500 prize.

When amusement arcades had a significant number of section 16 machines with a £2 stake and maximum £500 prize, they could compete with bookmakers. Since the Gambling Act was introduced, however, those section 16 machines have been made illegal, and 13,000 have had to be removed from amusement arcades around the country, or upgraded. That involves about £50 million-worth of equipment. Their replacements, known as B3 machines, only allow a £1 stake, and adult gaming centres are only allowed four of them. They now have to compete with bookmakers—which can have four machines that take up to £100 stakes for £500 prizes—with only four machines that can take a £1 stake. The only impact that bookmakers have felt as a result of the Gambling Act is that their fixed-odds
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betting terminals were renamed B2 machines; otherwise, they have been allowed to carry on doing exactly the same thing as before.

Faced with a choice of going to an adult gaming centre, where one is limited to a £1 stake, or a bookmaker, where one can potentially gamble £100 a time, people are going to bookmakers in great numbers. Family entertainment centres that were associated with adult gaming centres used to rely on a certain amount of cross-subsidy from the revenue of those adult gaming centres, so family entertainment centres are also suffering.

In addition, compliance costs have increased under the new Gambling Act. Previously, operators might have been able to comply with the old legislation for as little as £85. They now have to pay £1,000 to comply with the new Act. The owners of some of the arcades in my constituency tell me that their costs have gone up to as much as £3,000 to comply with the Act, so there has been a loss of revenue and increased compliance costs.

The problem is precisely encapsulated in a letter that Harry Levy Amusements has been prepared to share with me. I shall not use the names of the people involved, but it is a letter that the company recently received from one of its best customers, when he had to cancel his order. It states:

With that, Harry Levy lost a significant order and a significant amount of work.

I have also been contacted by Community, the trade union that represents people who work not only in seaside arcades but in the licensed bookmaker trade. It, too, is worried about the trend and its social consequences. In its view, bookmakers do not monitor the people who play their machines as closely as the seaside industry monitors those using adult gaming centres. Justification for its concern that the Act is having an inadvertent social effect can be found in the 2007 gambling prevalence survey, which found that there was a 2.6 per cent. rate of problem gambling associated with slot machines in seaside amusement arcades—the so-called B3 machines—but that the machines offered in licensed betting offices were associated with an 11.2 per cent. problem gambling rate.

The Gambling Act, which was intended to prevent the social problems of gambling by preventing people from getting into trouble, has had the perverse effect of destroying good business revenues and pushing people in the direction of a series of machines and an environment that make them more likely to be problem gamblers. Whether one is concerned about the social impact, the traditions of the British seaside or the businesses associated with seaside arcades, the Gambling Act has had that
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perverse effect, which nobody, neither the industry nor the Government, intended. That clearly needs to be addressed.

Seaside arcades need a competitive product. I understand that Adjournment debates are not the place for major Government announcements; I hope that my hon. Friend will stand up and say that he will give me everything that I am asking for, but I am not very optimistic. I hope, too, that, in the next few days, he will announce that he is going to conduct a thorough and urgent review of stakes and prizes across the board in this sector. In the meantime, the stake on B3 machines needs to be increased to £2, and the adult gaming centres need to be given the opportunity to have more of them.

The industry has said that it would like 20 per cent. of the machines in adult gaming centres to be B3 machines with £2 stakes. If my hon. Friend the Minister could announce that in the near future—while the review is going on—it would send a signal to the industry that it has a future, and there is a real possibility that we could turn the problem around.

My hon. Friend and his colleagues in government have proved that they are prepared to listen and act decisively. They did so on the potential loss of gaming revenue in clubs. They realised that there was going to be a serious problem and introduced so-called B3A machines for clubs to prevent that from occurring. So my hon. Friend and his colleagues have already demonstrated that they are prepared to act decisively when there is evidence of a problem, and I hope that he will agree to act as decisively now in respect of the sector that I have described. If he does, he will forever be known as the saviour of the British seaside, and I promise him that, when he comes to Ramsgate or Broadstairs, there will be an ice cream waiting for him.


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