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28 Apr 2008 : Column 82

Rob Marris: I do not know because I have not been given the evidence. Perhaps the Minister will explain it if she catches your eye, Mr. Cook.

Finally, I find it sad that the hon. Members for Putney and for South-East Cornwall have said nothing—unless I missed it, and I stand to be corrected—about the potential problems of gambling, which is not a risk-free activity. There is a beneficial side to gambling in that many people enjoy it, but there is also a downside. A minority of people get into trouble with it, and hon. Members should always bear that in mind when considering the regime, and should mention it rather than being silent on the problems that gambling can cause.

Mr. Ellwood: It is a pleasure to follow the hon. Member for Wolverhampton, South-West (Rob Marris). He has raised several important questions, but many of them have already been answered. We have been here before and the relevant information is in the public domain. I suggest that following his comments today, he will be deluged with information from BACTA and its secretary, Lesley MacLeod-Miller, to convince him and to show him the state that the gambling industry is in.

Rob Marris: Will the hon. Gentleman give way?

Mr. Ellwood: I should like to make a little progress, but I will give way shortly.

I commend my hon. Friend the Member for Putney (Justine Greening) for introducing the amendment—an important amendment for the industry—and it is good to see that the shadow Treasury team is willing to listen and talk to other Departments. There is a dilemma in that the Treasury team is not willing to see the consequences of tax rises for the industries involved, so I am pleased that we are putting forward a proposal to remove the limit on B3 machines not only in adult gaming centres but in bingo halls. I underline my support for the removal of the £1 stake limit and its return to £2. To place that in its historical context, we had the same situation before the Gambling Act 2005, but there was no problem. They were called section 16 machines—that was old money—but they are now called section B3 machines.

7.30 pm

The hon. Member for Wolverhampton, South-West wanted evidence, so let us look at the Gambling Commission’s prevalence study on areas of problem gambling. If we do so, we find that when it comes to machines under the banner of soft gambling, the figure is about 2.5 per cent. If we compare that with FOBTs—fixed-odds betting terminals—found in bookies up and down the country, the prevalence study report shows an addiction to gambling of 11.4 per cent. That is a huge difference, and that is perhaps where we should focus our attention, rather than the soft form of gambling.

Speaking as the shadow Gambling Minister, let me state the Conservative view that we need the right level of regulation for every type of gambling, whether it be penny arcades, the Crockfords casino or, indeed, internet gambling—another area that we have not even touched on, but I know that you, Mr. Cook, would correct me if I wandered down that road. Let us be clear: where is the evidence from this Government to justify hitting the
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soft forms of gambling such as bingo and the penny arcades? I do not like the term “adult gaming centres”, which has a seedy ring to it. I see the Minister smiling and I hope she agrees that perhaps another term could be used.

These soft forms of gambling are part of our community, whether in seaside towns such as those in my Bournemouth constituency or some of the other places mentioned in our debate. May I place on record my sadness that so few Members are in their places, suggesting that they are not supporting their local tourism industries? That applies particularly to those who signed early-day motion 840, which calls for exactly the changes that we are debating today.

Another consequence of the Gambling Act 2005 is that we have seen a 21 per cent. downturn in the trade of adult gaming centres. That is what has happened. People are migrating out of the arcade centres and, indeed, the bingo centres and going across the road to the bookies, where there is a different and harder form of gambling, which now meets their desires. I have already mentioned the FOBTs, where £100 a bet can be put down every 20 seconds and scant regard is paid to what is actually being done. That is the consequence—the unintended consequence—of the Gambling Act 2005, which we have an opportunity to amend today. That is why we are proposing the amendment.

Mr. Graham Stuart (Beverley and Holderness) (Con): My hon. Friend is making a very powerful case on behalf of, for example, businesses in Hornsea and Withernsea in my constituency. They are coastal towns facing many economic challenges, and getting taxation correctly positioned on arcades and other such businesses is essential to maintaining their economic well-being.

Mr. Ellwood: I am grateful for my hon. Friend’s intervention. His comment has been repeated up and down the country.

Mr. Hancock: I just want to correct the hon. Gentleman. He referred to the move towards fixed-odds betting terminals as one of the unforeseen consequences of the Gambling Act 2005. They were well foreseen, particularly by those who now operate that sort of gambling; they saw it as an absolute cash cow in the making. The Government were told that that would be the consequence, but they did not listen.

Mr. Ellwood: The hon. Gentleman makes a valid point. I was being generous to the Government in using that term. We have called for a review of the use of FOBTs. They are here to stay, but if people can walk into these bookies up and down the country and place a £100 bet without anyone even taking a look at what is being done and if about 11.5 per cent. of people are addicted, the Government should clearly be looking into that problem, rather than making changes that affect bingo halls and penny arcades.

Rob Marris: May I caution the hon. Gentleman? I did not say that I was against the amendment, which he seems to assume I was. I was merely questioning whether there was evidence for it. I am grateful to him for supplying some of that evidence, which his Front Benchers singularly failed to do. The import of the earlier part of
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his speech was that we have been here before, but I can assure him that I have sat on six Finance Bill Committees in a row, so I have some idea of what has and has not been discussed in this regard.

Mr. Ellwood: I do not wish to challenge the hon. Gentleman’s claim to being an intellectual tower when it comes to financial matters. What was clear from his intervention was that he was here either to delay proceedings—though I am sure that that was not his intention—or perhaps simply to learn, but it seemed that he was unaware of the impact of this legislation and its important consequences if passed. Now that the hon. Gentleman has heard the arguments, I certainly hope that he will join us in supporting the amendment, which is crucial to helping our communities, particularly our seaside towns. If you visit any of these places, Mr. Cook, whether they be bingo halls or arcades, you will see them boarded up; they are closing down at a colossal rate of knots. The last six months has seen more of these establishments closed than ever before, as the hon. Member for South-East Cornwall (Mr. Breed) mentioned. That is what is happening to this important industry and it needs Government support.

We cannot wait for the standard review to take place. A review of stakes and prizes takes place about every two years, and the next one is due in 2009. We are delighted with the Conservative policy that we have heard today, but we cannot wait for a general election. We need action now, so the Minister has a fantastic opportunity to stand up and show some support for seaside towns, for the bingo halls that are closing all over the country and for the communities that rally round the soft form of gambling. That would be preferable to the continuing trend towards the harder forms of gambling.

I ask the Minister to consider and look further into the evidence that she has received. I know that the Under-Secretary of State for Culture, Media and Sport is keen to support this measure but feels that his hands are tied, so I hope that the Exchequer Secretary will be able to stand up today and say, “Watch this space.”

Mr. Hancock: May I first congratulate the hon. Member for Putney (Justine Greening) on what I thought was an excellent speech, putting the case on behalf of an industry that has been badly let down? Throughout the negotiations on the Gambling Act 2005, including the pre-consultation, the Government promised to listen to the case that BACTA and others were putting forward not just to safeguard themselves but in an attempt to work with the Government. When the Gambling Bill came out, it was clear that the Government had totally ignored all that advice and guidance. Labour Members voted gladly to support that, without realising the damaging consequences to the industry. I am grateful to the hon. Member for Wolverhampton, South-West (Rob Marris) for his advice not only to vote for the amendment but, if it fails, to vote against the clause stand part. I think that we should take that good advice.

If I look around my part of the south coast and south Hampshire I see that Portsmouth, Hayling island, Fareham, Gosport and the Isle of Wight have seen a decline in the arcade industry. Many establishments have already closed or been converted and some are in
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the process of conversion now. I do not share the concerns of my hon. Friend the Member for South-East Cornwall (Mr. Breed) about people demonstrating or campaigning—it is more about campaigning against new practices, as I do not believe there is a campaign in the country to try to close these operations. The Government are doing an effective job on their own bat by doing that.

The amendment offers an opportunity for the Government to say that they realise that the industry is important in employing tens of thousands of people—not just in the front line in the arcades, fairgrounds and on piers, but in the manufacturing industry in respect of servicing the machines. Countless thousands of people will lose their jobs. If they were all concentrated in one or two constituencies, there would be a national outcry and the Government would be forced to take action. Because those people are mainly dispersed around the coastline and in the city centres, the Government can choose to ignore the problem—there may only be a few dozen here or there, perhaps 50 in a city such as Portsmouth, so they can ignore it. I would say, however, that the Government ignore it at their peril. They not only disadvantage the industry when those arcades are closed down, as many people who enjoy the facilities offered there will be equally disappointed when the bingo halls are forced to close, like the arcades that are already closing.

The different parts of this industry all have families and voters, so I urge the Government to listen carefully to tonight’s debate. They have an opportunity to go some way to start to listen to the industry. They promised that they would, but ignored it in the Gambling Act. If we see what the hon. Member for Bournemouth, East (Mr. Ellwood) talked about—people migrating from arcades to the real danger of heavy gambling, which the hon. Member for Wolverhampton, South-West mentioned; lots of people share his concerns—there will be an even bigger increase in the problem.

The hon. Member for Bournemouth, East mentioned a figure of 11.2 or 11.4 per cent., but the report says that the figure is 11.4 per cent. and rising. That is the dilemma that the industry has to combat.

Mr. Ellwood: The hon. Gentleman is making a powerful speech and I am pleased that he supports the amendment, but is he aware that bookies are opening in the north of England and elsewhere with a licence to be a bookmaker even though people cannot bet on a horse on those premises? They are opening so that the four FOBTs can be based there. Those are the money-making machines.

Mr. Hancock: I agree entirely, and I think that that pattern will quickly be followed around the country, because word will spread that that is a way to make money. The Government are truly cutting off their nose to spite their face. If the Treasury could calculate how much revenue it has lost in tax take from the closures over the past 12 months, it would be surprised and would see that it has already lost more than it will ever gain over the next two or three years.

Mr. John Gummer (Suffolk, Coastal) (Con): Does the hon. Gentleman agree that the problem is as bad if not worse in smaller towns such as Aldeburgh and Felixstowe in my constituency? These arcades have
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been hugely important because, on wet days, families have been able to spend a short time together at little cost; they have been able to have family enjoyment. Such activity is wholly different from that which goes on in places of the sort being talked about.

Mr. Hancock: The right hon. Gentleman comes late to the debate, but he comes with a pertinent point. That is the added quality that such amusement arcades—in city centres and small towns, as well as in the coastal cities of our country—offer to the family. In many areas, those arcades are one of the last places where the family can go on a wet day, having planned to do something else, and not have to spend a lot of money to have some fun as a family. That is what the Government have not recognised.

I will be delighted if the Minister says that she welcomes the amendment and will accept it. Perhaps she can persuade her colleagues to support it, because that would start the process of honouring their commitment to the industry, recognising its importance and giving those who see such arcades as one of the small pleasures in their life the opportunity to see that continue.

The Exchequer Secretary to the Treasury (Angela Eagle): It is a pleasure to make my first contribution to what will be a long process. I am sure that we will all get more than used to listening to contributions from all parts of the Committee as we consider the Bill upstairs following two days of debate in the House. I for one am looking forward to it.

The hon. Member for Putney (Justine Greening) moved amendment No. 16 on gaming machines. I want to spend a little time taking the Committee through the current situation to set it in context. Gaming machines are subject to amusement machine licence duty, which is payable in respect of a licence that entitles a person to make a machine available for play.

AMLD taxes dutiable gaming machines and is charged at different rates based on machine type and the duration of the licence, which is what the B3 category mentioned by the hon. Lady refers to.

It may help the Committee if I briefly outline the background to AMLD. In 2006, we aligned the categories of AMLD with the Gambling Act categories. Aligning machine categories with the Gambling Act was a simplification measure because it gave operators more consistency between the tax and regulatory regimes.

The hon. Lady’s amendment would make tax changes contingent on changes to the social law. Traditionally, the social law is a matter for the Department for Culture, Media and Sport and the Gambling Commission. The taxation of all gambling is clearly a matter for the Treasury. I would have some worries about mixing up the two.

During the alignment with the Gambling Act, which does not regulate non-gaming machines, we removed AMLD from non-gaming machines—for example, pinball and video machines, which are more than likely to be in amusement arcades of the kind that hon. Members have been talking about in today’s short debate. Quite a lot of those machines have been exempt since 2006. We also exempted from AMLD many of the small-stake and small-prize machines. Those are the ones that are found in family oriented seaside arcades.

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7.45 pm

For the purpose of this tax, there are six categories of gaming machine—A, B1, B2, B3, B4 and C—which are determined by reference to the stake limit of the machine and the maximum prize available from the gaming machine. The cost of an annual licence ranges from £760 to £5,160, depending on the category. The cost depends on the category of machine and the duration of the licence applied for. Licences can be taken out for any period of between one and 12 months. Rebates are available in monthly chunks for licences that cease to be useful for gaming machines that are no longer in use.

AMLD is a fixed cost, so, because of inflation, the value of revenue raised for any given number of machines will diminish over time. Clause 21 makes a routine revalorisation for all rates of AMLD. That is not an increase; it merely maintains the real value of the licence.

Amendment No. 16 would lead to a reduction in the cost of all amusement machine licences on 1 April next year—not just for B3s, but for all of them, including those at the higher end, which people were objecting to so much earlier in the debate—unless the Secretary of State for Culture, Media and Sport made regulations that allowed a fifth of the gaming machines in bingo halls and arcades to be category B3 machines. It would return AMLD in April 2009 to the level of August 2006, which would cost £15 million.

Mr. Ellwood: Will the Minister expand on why it would cost £15 million to make that change? We probably all agree that this is perhaps not the right domain for her to make it, but she has heard—I hope—a convincing argument as to why it should be introduced. We have taken the opportunity to put the case. Will she now have words with her counterpart in the DCMS and say that, unless there are changes, she will receive less revenue from bingo halls and amusement arcades?

Angela Eagle: Clearly, we keep those issues, as well as those of the effect of taxation, under close review, but the hon. Gentleman is right to point out that the DCMS is the Department that deals with the social law. The changes that he wants to be made in relation to the number of category B3 machines allowed in bingo halls and amusement arcades are a matter for my DCMS colleagues.

David Taylor (North-West Leicestershire) (Lab/Co-op): The Minister has heard from Members on both sides of the Committee various descriptions of the trends that have long been in place regarding the run-down in the number of bingo halls and amusement arcades. How relaxed is she about that run-down in fiscal and social terms? Not everybody who was once a user of amusement arcades will migrate to the heavy end of the spectrum. For a lot of middle aged and elderly people, amusement arcades represent a social outing and a small piece of enjoyment while they are out shopping. By no means are they problem gamblers.

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