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Written Ministerial Statements

Wednesday 25 June 2008


UK/France Double Taxation Convention

The Financial Secretary to the Treasury (Jane Kennedy): A new Double Taxation Convention with France was signed on 19 June 2008. After signature, the text of the Convention was deposited in the Libraries of both Houses and made available on HM Revenue and Customs’ website. The text of the Convention will be scheduled to a draft Order in Council and laid before the House of Commons in due course.

Culture, Media and Sport

Gaming Machines

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Gerry Sutcliffe): In recent months I have received a range of representations from trade bodies in the gambling industry seeking changes to the regulatory regime for gaming machines established by the Gambling Act 2005 (“The Act”), and implemented by secondary legislation from 1 September 2007.

Through the Act, we have established a comprehensive new system of regulation for gaming machines, with consumer protection at its heart. Our No. 1 priority remains to protect the public, and I have considered the representations we have received with this uppermost in mind.

A number of hon. Members have expressed support for the campaigns led by the Bingo Association and the British Amusement Catering Trades Association (BACTA). I have also received representations from the British Beer and Pub Association, the British Association of Leisure Parks, Piers and Attractions and the British Casino Association. I wish now to report to the House the Government’s response.

While the evidence that has been presented from across the industry is mixed, the Government recognise that many operators have found trading conditions difficult. There are likely to be a range of reasons for the current downturn. While the evidence presented to me concentrates almost exclusively on regulatory factors, it attaches lesser or no weight to a range of other plausible factors such as levels of investment in product development, longer term structural and technological changes and wider economic factors. While it is open to Government to take action within the framework of the Act, the industry must recognise and find its own solutions to some of these problems.

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Representations have also been made to me concerning what were dubbed under the previous legislation section 16 and section 21 machines. Whatever the view in some sections of the industry of what earlier legislation permitted, there seems little value in prolonging that debate now. The current legal position is beyond doubt.

The new system of regulation established by the Act, and the strict limits it imposes, were set only after lengthy debate during pre-legislative scrutiny, the passage of the Gambling Bill, and on the relevant secondary legislation. The principal trade bodies, including the Bingo Association and BACTA, played a full role throughout the passage of this legislation, and in the public consultation that preceded it.

I must consider the requests for changes within the new framework established by the Act and agreed recently by Parliament. That framework gives Parliament the final say; it is for the Government to decide what proposals should be put to public consultation and then presented to Parliament for consideration.

I have concluded that there is strong evidence that the situation in the bingo industry has been particularly acute. Between 31 March 2004 and 31 March 2007 the number of bingo clubs operating fell from 696 to 634. A further 37 clubs closed during 2007-08, around 6 per cent. of the industry.

Colleagues in the House will recognise that bingo clubs fulfil an important social function in many communities. The 2007 Henley report commissioned by the Bingo Association found that for many people, especially older and retired women, bingo is the main or sole leisure pursuit outside of the home. Despite the range of deregulatory measures that we have already introduced to assist the industry, it is clear that the future of bingo clubs in many communities is under threat.

I am persuaded that a number of other special circumstances apply to bingo. These include the fact that under the industry’s business model there is high demand for machines during short periods of the day, which may impair the fair and open conduct of gambling.

I have also noted two additional points made by the Bingo Association that:

The Bingo Association has argued that, to help arrest the decline, the number of category B3 machines (£1 maximum stake, £500 maximum prize) that bingo halls are permitted should increase from four currently to as many as 16. In my view this goes too far. An increase of this proportion would be inconsistent with the precautionary approach that the Government have taken to gambling regulation.

Nevertheless I am persuaded that the situation facing the bingo industry is sufficiently grave, and the circumstances surrounding bingo sufficiently distinct, to justify considering whether a smaller increase might be appropriate without jeopardising our principal priority, which remains to protect the public.

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For this reason, I have decided to consult on a proposal to increase to eight the number of category B3 machines which bingo clubs may offer. This enhanced entitlement will only apply to bingo halls which operate a strict over 18s entry policy. If, in the light of public consultation, we decide to proceed, we will bring forward the necessary order. This will be for Parliament to approve by means of an affirmative resolution.

I have also been struck by the representations I have received from hon. Members on all sides in support of seaside arcades. Family entertainment centres, which are not permitted to offer high stake, high prize category B gaming machines, form an integral part of many families’ seaside holidays or day trips. I want to see that continue.

The Government have already taken steps to help seaside arcades. In October 2006, in response to requests for assistance from the industry and a year earlier than planned, we increased the stake and prize levels for category C gaming machines to 50p and £35 respectively. These changes benefited not only seaside arcades, but also pubs, bingo clubs and AGCs, as well as gaming machine manufacturers and suppliers.

To give the industry certainty and to enable it to plan properly, we made a commitment to review stakes and prizes again in 2009. However, in view of the difficult trading conditions which many operators are now reporting, I have decided on an exceptional basis to bring forward the planned review by one year for the lowest categories of gaming machine—categories C and D. Category D machines include 10p stake and £5 prize fruit machines, as well as traditional seaside amusements like penny falls and crane grabs.

The industry must recognise that this is a one-off. I am mindful of the risk that, coming so soon after the 2006 changes, an early review could perpetuate a view in some sections of the industry that ever increasing stake and prize levels are the only answer to the pressures it faces. This may lead to tensions in terms of the licensing objectives, and act as a disincentive to the industry to explore other ways to freshen its appeal. At the same time, I understand the need for certainty among manufacturers and operators alike on the date of future reviews.

In addition, I am therefore announcing today that I have decided to reinstitute the system of triennial reviews that grew up by custom and practice under the previous legislation. This will mean that, after the 2009 review (part of which I am bringing forward to this year), the next review will take place in 2012.

In view of the priority which the industry attaches to an early review, I am adopting a fast track process. We are writing today to trade bodies, faith groups and others with an interest in problem gambling, to invite submissions on what stake and prize levels should apply for machines in categories C and D during the period until 2012.

Having carefully considered these submissions, I will formulate proposals and, prior to formal consultation, seek advice from the Gambling Commission on whether any of these proposals raise concerns in terms of the licensing objectives. There will then be a formal three month consultation before any legislation is brought forward. Any changes will be for Parliament to approve, again by means of an affirmative resolution.
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I intend to complete the consultation with a view to returning to Parliament with any necessary order in the autumn.

There is no guarantee that this review process will result in increases. It will be for the industry to make that case, and for wider stakeholders to state their views.

I have considered carefully whether the evidence that has been presented would justify extending this early review to high stake, high prize gaming machines in categories Bl, B2, B3, B3A and B4. In particular, I have carefully considered BACTA’s call for an immediate doubling in the maximum stake on category B3 machines, found in AGCs and bingo halls, from £1 to £2.

A key element of BACTA’s case is that customers have found the category B3 machine with its £1 stake and £500 prize unattractive, and that this has led in turn to customers migrating from AGCs to play category B2 machines (commonly known as fixed odds betting terminals) in betting shops. Little in the way of convincing evidence has been submitted to substantiate this claimed migration.

I have consistently made it clear that I view the growing popularity of category B2 machines and other high stake, high prize gaming machines with concern. That is why in March I asked the Gambling Commission to prioritise research in this area. The aim is to explore the available research which assesses whether there is any evidence:

Work is already underway and, by the end of July 2008, the Commission will recommend what, if any, further research is needed. The Commission expects to publish the findings from any further work in June 2009.

If evidence emerges that category B2 machines are a particular problem, I will not hesitate to use the extensive powers under the Act to regulate them more stringently. In the meantime, I have concluded that it would not be appropriate to review stake and prize levels for category B machines, or to agree to BACTA’s specific proposal, before the Commission’s work is complete and Ministers and Parliament can consider any new findings which emerge. The Government have committed to review stake and prize levels on all categories of machine in 2009, and we will make good on this commitment in respect of category B machines once the Commission has reported.

I have also considered carefully a proposal by BACTA that adult gaming centres—arcades restricted to over 18s found on many high streets—should be permitted to make available category B3 machines on a ratio of 20 per cent. to the total number of gaming machines provided, in place of the current limit of four machines per premises.

I have, however, concluded that this proposal would not provide sufficient certainty about the total number of B3 machines in individual AGC premises, or across the AGC estate as a whole. It could create the potential for larger machine sheds with significant concentrations
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of high stake, high prize gaming machines in easily accessible high street locations. I am concerned that this could have an adverse impact in terms of the licensing objectives.

I have also considered whether AGCs should benefit from the increased machine entitlement I am proposing for bingo clubs. However, I am not persuaded on the basis of the evidence that has been presented to me that the same exceptional and special circumstances apply. For instance, no evidence has been presented of closures on the scale of those experienced in the bingo industry. In AGCs, gaming machine play is not an ancillary activity, nor is there any clear evidence of unmet demand for such machines.

While I understand that this will come as a disappointment to AGCs, they will of course benefit from any increases to stake and prize levels of category C machines, which form the bulk of their machine offer.

International Sporting Relations

The Secretary of State for Culture, Media and Sport (Andy Burnham): I want to update the House today on the action Her Majesty’s Government are taking in relation to proposed bilateral tour of the Zimbabwean cricket team to England in 2009.

The Government have been monitoring the situation in Zimbabwe closely. I hope the House will appreciate that we have delayed intervening in this matter and allowed time for the situation to improve. However, the deteriorating situation around the failed and illegitimate elections in Zimbabwe, and the imminence of the International Cricket Council’s (ICC’s) annual conference in Dubai, means that the point of decision on this matter has now been reached. We have been in close discussions with the England and Wales Cricket Board (ECB) throughout recent months.

The Zimbabwean Government have ceased to observe the principle of the rule of law: it has terrorised its own citizens, including the ruthless and violent suppression of legitimate political opposition.

The UK Government will always work with the international community to uphold fundamental freedoms and human rights. Accordingly, the UK Government have responded with a measured approach which seeks to isolate Zimbabwe internationally and bring pressure to bear on supranational institutions such as the United Nations and the European Union to take yet firmer action against the despotic regime, while ensuring that its humanitarian life-saving mission to Zimbabwean citizens continues.

The Government are clear that direct intervention on a sporting matter should not be taken lightly and our position has been to intervene in this matter only as a last resort. The Government have previously called on the ICC to reconsider its rules to allow teams to forfeit tours to countries, such as Zimbabwe, where serious human rights abuses are occurring. Unfortunately the ICC has declined to do so.

However, with the ICC Conference due to take place in Dubai next week, the Government now have to make their position clear.

The Government strongly defend the autonomy of sports’ governing bodies. We also support the autonomous management of international sporting competitions
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by international sports federations and independent representation of British sporting interests on such federations by our national governing bodies. The serious human rights abuses occurring in Zimbabwe and the close ties of the Zimbabwe cricket team to the Mugabe regime present exceptional circumstances that justify exceptional measures. It would never be our wish to penalise domestic supporters, and nor would we wish to place players particularly in the uncomfortable position of having to take difficult individual judgments on these matters.

Therefore, it is with regret that Her Majesty’s Government have decided to make clear that they are prepared to prevent the bilateral tour in 2009 and will take all necessary steps to prevent players from Zimbabwe from participating in that tour.

I have today written to Giles Clarke, the Chairman of the ECB, instructing the ECB not to hold the bilateral tour with Zimbabwe. The Government welcome reports that the issue of Zimbabwe’s involvement in world cricket is on the agenda at the ICC annual conference which is taking place next week in Dubai. We hope that this letter will help ECB play a full part in these discussions, and lead to a positive outcome particularly in relation to the important event, ICC’s World Twenty20 tournament, due to be staged in England in 2009. A copy of this letter is attached to this statement.

We hope that there will not be a need to repeat this exceptional measure and we will continue to work with the international community to allow full sporting relations to be restored. The Government will continue to monitor closely the situation in Zimbabwe and remain prepared to reconsider their position should circumstances in Zimbabwe materially improve.

Letter to Giles Clarke, Chairman of the England and Wales Cricket Board:

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