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2.45 pm

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Gerry Sutcliffe): I congratulate my hon. Friend the Member for South Thanet (Dr. Ladyman) on securing this important debate. It is good to see lots of hon. Members in the Chamber to discuss this crucial issue, which affects not only the seaside towns but many of our other towns as well. He referred to Ministers being held to account here on a Friday afternoon; I am pleased to be here to talk about this important subject. He has tempted me to make many announcements today, but I hope that he will forgive me if I do not do so. I shall, however, think through the issues that he has raised.

The Easter holidays will soon be upon us, and they are the traditional curtain-raiser to the season in many seaside towns. Now is therefore an opportune time to reflect on the important role that those towns play in our national life and economy. It is true that many businesses in seaside towns, including the arcades, are having a tough time. Across Government, we are therefore putting in place a range of initiatives to assist the economies of seaside towns and to boost tourism. The then Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Stalybridge and Hyde (James Purnell), announced a new funding programme for coastal resorts in November last year. That will see £45 million of investment over three years
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to help regeneration through heritage and culture. A cross-Whitehall working group has been set up to look further at the common issues facing coastal towns and to make sure that our approach is joined up.

As my hon. Friend the Member for South Thanet has said, seaside arcades form an integral part of many families’ seaside holidays or day trips. The penny falls and crane grabs have provided many generations of children—and some adults—with harmless fun, and we want to see that continue. Of course, the arcade sector also encompasses adult gaming centres—AGCs—in the many hundreds of arcades for the over-18s that can be found not only in seaside towns but on many inland high streets.

I should like to pay tribute to the responsible operators of AGCs and their staff, who have worked hard in recent years to professionalise their operations and improve the sector’s image, developing a loyal customer base in the process. It is a matter of concern to me that some in the industry appear to be experiencing difficult trading conditions. We are looking closely at the evidence provided by the British Amusement Catering Trade Association on the extent of the current downturn and what might have caused it. My hon. Friend referred to the range of factors that might be involved. I supported, and continue to support, the smoking ban, because I think that that was the right thing to do. There have been wider technological developments in the gambling industry and there is now more intense competition from other sections of the leisure industry. All those factors might have played a part. Much has been made of the part that the introduction of the Gambling Act 2005 may have played, and I will consider that alongside other possible factors.

What has perhaps been overlooked in the debate is how we have sought, through the Gambling Act, to help to equip arcades to face some of the new challenges that they face. We have introduced an effective system of regulation for the gaming machine sector, right the way through the supply chain from manufacturers to suppliers to operators. That has ensured that customers can have the confidence and assurance that they are dealing with professional organisations that take consumer protection seriously.

We have scrapped the prohibition on profit or revenue sharing that was introduced in the Gaming Act 1968. It will take time for the full impact of that change to be felt, but it creates the potential for suppliers to exploit new markets. We have also completely overhauled the rules governing how gaming machines may operate, giving manufacturers new flexibilities in the way in which machines can be developed. For the first time, adult gaming centres have been granted an entitlement in law to up to four high-stake, high-prize gaming machines. I understand the issue around B3 machines, and I am prepared to look at that and have a detailed discussion. We made it clear throughout the passage of the Gambling Act what limits on stakes and prizes would apply under the new legislation, and we made it clear that these machines would not qualify for grandfather rights.

We want to assist the industry, but our principal objective in regulation is to protect the public, and I make no apologies for that. Even allowing for that overriding priority, the industry has fared well under this Government by any measure.

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Mr. Anthony Wright: Does my hon. Friend accept the argument that driving customers away from family entertainment centres has had the effect of sending them into hardened gambling in licensed betting offices? The 2005 Act also made licensed betting offices more open. They are no longer seedy places; they have become open and transparent, so that people can see them and be attracted to the machines. Inevitably, we have driven people away from family entertainment centres and adult gaming centres into more hardened forms of gambling.

Mr. Sutcliffe: I understand my hon. Friend’s point. He will be aware of my announcement on Wednesday asking the Gambling Commission to look at fixed-odds betting terminals. We want firmer evidence that what he describes is taking place, but I am happy to meet him to discuss the issue in greater detail.

The Government think that we have done very well by the gambling industry. In 1995, the maximum stake and prize for what is now a category C machine were 25p and £10 respectively. Had we increased those limits in line with inflation since then, the limits at the end of last year would have been 35p and £14.11 respectively. Instead, they are now 50p and £35. We raised maximum stakes and prizes to those levels in October 2006 in return for a welcome commitment from the industry about social responsibility, a year ahead of the 2005 Act’s planned implementation date.

At the same time, we doubled the maximum stake on what are now category B3 machines to £1. The maximum prize remains £500. Had we raised stake and prize levels in line with inflation since 1995, they would now be 35p and £352.70. We introduced those changes just 16 months ago because many in the industry were finding it tough, yet some in the industry are now asking us to double the maximum stake again on B3 machines to £2, the same amount as category B1 machines, which are permitted only in casinos.

Miss Kirkbride: I should like to be clear about what we are talking about. It is my understanding that before September 2007 bingo clubs and the sort of centres that the hon. Member for South Thanet mentioned were allowed machines with £2 stakes. The day after the Act’s implementation, those machines were removed and £1 stake machines were put in. That made a qualitative difference to the kind of gaming that those centres were able to offer their customers, with the result that many customers walked away because the thrill was no longer as good. Surely it is a clear-cut argument: one day they had good business, and the next it had fallen by about 25 per cent. Is that not what we are talking about?

Mr. Sutcliffe: I do not think that it is as clear as that, although I understand the hon. Lady’s point. There are exceptional circumstances in bingo, and I hope to return to them in discussions with the bingo industry. She is quite right that we are talking about issues affecting bingo. We are not unsympathetic to the issues raised by adult gaming centres, whether in seaside towns or in urban areas, but we want to ensure that we protect the consumer as well. It is important to strike the right balance.

I understand the industry’s point, as my hon. Friend the Member for Great Yarmouth (Mr. Wright) mentioned,
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about bookies and fixed-odds betting terminals having caused some of the problem, but it is a bit perverse to argue that we should offer an increased category of gambling in adult gaming centres. If FOBTs are causing the problem, we need to deal with it, and we will consider that.

Dr. Ladyman: I hear what the Minister is saying, but I want to emphasise the point that I made in my speech and pick up the one made by my hon. Friend the Member for Great Yarmouth (Mr. Wright). We know that the rate of problem gambling in adult gaming centres even when the machines had £2 stakes was about 2 per cent. The problem rate in licensed betting offices with those machines is 12 per cent. I am with my hon. Friend the Minister on the matter—I want to protect people from problem gambling, but the way to do so is to encourage them out of the bookmakers’ shops and back into adult gaming centres.

Mr. Sutcliffe: I understand my hon. Friend’s point. That is why we gave the Gambling Commission the powers that we did. He is right to say that consumer protection is vital. I am not trying to dismiss the argument made by BACTA; hopefully some time next week I shall discuss with BACTA what we might be able to do.

I acknowledge the problems being experienced in the industry and in communities, which have been highlighted by my hon. Friend today and by an early-day motion that many hon. Members have signed. I recognise that the problems are genuine. In coming up with a solution, as I want to do, I have to get the balance right, so I shall consider what my hon. Friends have said in this debate and the contents of the early-day motion, and continue to work with the industry and the association to make sure that we resolve the problems. I hope that the industry accepts that we have made great strides in the Gambling Act and the way in which the industry has developed. We all want seaside towns to be successful.

Dr. Ladyman: I knew that I would get a sympathetic hearing from my hon. Friend, because he is a sympathetic and fair man. I have every confidence that he will be able to sort out the problems, but I stress the urgency of the situation. We cannot afford to wait for a six-month review, or even a three-month review. My constituents’ businesses are going under now. We need to send a signal now.

Mr. Sutcliffe: My hon. Friend will know that BACTA has written to me. I hope to be able to respond to the association’s letter next week, as I am aware of the urgency. The industry has made a number of representations to me and I accept that there is a serious problem. However, I hope he accepts that we cannot react indiscriminately. We need to make sure that our response is a measured one.

I fully understand the concerns relating to gaming machines and bingo. We have a long tradition of bingo in this country and we do not want to do anything to damage it further. We want to support the gaming industry and bingo, and I hope that in the next few weeks we will be able to make some positive announcements.

Question put and agreed to.

Adjourned accordingly at three minutes to Three o’clock.

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