Examination of Witnesses (Questions 140-159)
PETER DEAN
CBE, TOM KAVANAGH
CBE, GERALDINE MENEAUD-LISSENBURG
AND ELLIOT
GRANT
18 DECEMBER 2003
Q140 Mr Meale: The only thing I would
like to say to you, Mr Dean, is that if you get any of the sport
or leisure industries paraphernalia and you read that, you will
see that there are many pages devoted to nothing else but recruitment
and I advise you very strongly that if you are to be successful
you need to start that process now, which is only a very short
period of time before the Bill may come into being.
Mr Dean: That is helpful advice
which we will certainly note.
Q141 Chairman: Returning to Lord Brookes'
point, paragraph 326 of the policy statement which accompanied
the Bill makes it absolutely clear that the Government's intention
is that the Commission will seek to recover through licence fees
the full cost of the operation and administration costs.
Mr Dean: Yes.
Q142 Chairman: I appreciate that it is
early days but has any work been done yet on what this will mean
for licence fees? Is the existing industry likely to face a substantial
increase in licence fee costs?
Mr Dean: I think the existing
industry is probably expecting some increase in costs. No, we
have not gone so far as to seek to predict what the allocation
would be, but clearly the Commission is going to be larger, it
is going to be more expensive than the Board, and therefore more
fees will need to be recouped. On the other hand, the industry
from which they are going to be recouped is going to be substantially
larger.
Mr Kavanagh: Can I add a point
there because there is quite an important difference that we are
looking for in the new legislation? The current Act only allows
us to set one fee for each of the various certificates that we
issue, so we can only have one fee for a bingo company or a machine
supplier regardless of their size. We are looking in the new Bill
for flexibility which will allow us to charge differential fees
according to the size of the operation, so it may well be that
particularly some smaller company will benefit in that respect
in the new legislation.
Q143 Chairman: Going back to when you
think you might get Royal Assent, presumably you would expect
to consult with the industry before that date over what this fee
structure would be?
Mr Dean: Certainly.
Q144 Baroness Golding: How long do you
estimate it will take to consult on and then issue the Commission's
statement of policy for licensing and regulation, the series of
codes of practice and the guidance to local authorities?
Mr Dean: I cannot give you a precise
answer to that question because we have not turned our minds to
the mechanics of it. What I can say is that it is our intention
to get on with this early next year as soon as we possibly can.
How long it will take will depend to a degree on the consultative
process. All these regulatory documents to which you refer will
require consultation and they will be consulted on. There is also
the technical problem that the documents themselves can only formally
be validated once the Commission formally comes into existence.
I do not see that as a practical problem because I see the process
of consultation going on in a sense on a hypothetical basis so
that the industry and the other interested parties are not surprised
by anything that is in it and that the eventual validation by
the Commission itself will be more or a less a formality later
on. I see this work as starting next year and substantively being
completed well in advance of the legislation coming into effect.
Q145 Baroness Golding: Have you any fears
that any of these things are going to lead to you becoming bogged
down in negotiation and limiting the timescale that you have?
Mr Dean: Again, without wishing
to appear too sanguine about it, I do not see this as a fundamental
difficulty. There are a number of codes already in existence which
the Board has been engaged in in one capacity or another. Some
of them have been issued by the Board; some of them have been
issued by the industry, and we have consulted on them. Therefore,
the notion of codes is not one which is strange to the industry
and quite a lot of the content of the new codes, so far as they
affect the practicality of the work in the industry, will take
advantage of the work that has already been done in the existing
codes. There are areas which have not been covered to such an
extent, particularly those relating to social responsibility,
problem gambling, and those will require care and attention and
they will take time. No, I do not envisage this as bogging us
down.
Q146 Baroness Golding: The guidance to
local authorities is going to be very important with regard to
the shape of it. I wondered if that was going to be a priority.
Mr Dean: It is certainly something
which is very much in our minds. There is a sort of precedent
at the moment because currently the Board gives quite extensive
guidance to magistrates, which is issued annually. I am not for
a moment saying that one can simply read across from that the
sort of advice for local authorities, which will be very different,
but it is an area which is not wholly unfamiliar to us. We are
in touch with the local authorities' association where we are
planning regular meetings with them, again starting in the new
year. They are also keenly interested in this area and we shall
be giving it priority.
Q147 Dr Pugh: You are currently discussing
the transition timetable with the DCMS. What is your ideal case
scenario and why?
Mr Dean: Again, the assumption
that we are making is that Royal Assent is given in the summer
of 2005. Between now and then therefore we need to get on with
the fairly massive work to do with transition that has been touched
on, that is to say, the planning, change management, project management,
recruitment and so on. The Commission will not, as we see it,
be up and running on the day of Royal Assent. The DCMS have issued
a discussion paper which envisages a staggered timetable starting
with the Royal Assent and, assuming that that is in, say, June
2005, the Commission would then be formally launched in September
2005. It would then invite licence applications under the new
Act from, I think, January 2006 The Act would come fully into
effect some time after that, probably in about September 2006,
so there would be a staggered programme which would not as it
were just end with Royal Assent.
Q148 Dr Pugh: You are very comfortable
with that timetable?
Mr Dean: Well, it is a challenging
timetable, but it is one which is entirely workable.
Q149 Dr Pugh: Meanwhile, do you think
there should be a moratorium on applications and the issuing of
licences to prevent new developments evading the proposed minimum
size rules?
Mr Dean: We have had no evidence
up to now of anybody making applications to the Gaming Board for
certificates of consent, as they are called, for small casinos.
On the contrary, the applications that have come to us, so far
at least, in anticipation of the new legislation have been for
large casinos or at the very least medium sized casinos. We have
no evidence at all that there is a stampede. There certainly has
not been a stampede and we know of no threatened stampede of companies
seeking to get under the chicken wire for small casinos.
Q150 Dr Pugh: So the answer to the question
is no?
Mr Dean: The answer to the question
is no.
Mr Kavanagh: It does need to be
borne in mind that casino applications at present can only be
made in the existing permitted areas and they are already fairly
well served with fairly small casinos.
Q151 Dr Pugh: Have you seen any other
changes in licence applications which are attributable to the
forthcoming regulations?
Mr Dean: Yes, applications have
come in from quite a number of companies which wish to take advantage
of the more relaxed regime which will apply to casinos and large
casinos in particular.
Q152 Dr Pugh: Any particular genre or
type or what?
Mr Dean: We have had two or three
from the United States who are major players in their respective
jurisdictions, but not exclusively. There have been some British
applicants as well.
Q153 Lord Brooke of Sutton Mandeville:
I am sorry to take the witness back to Baroness Golding's questions,
but the issue of local authorities came into that exchange. During
the licensing proceedings or the Licensing Bill there was real
imprecision about the Government's intentions of reimbursing local
authorities for their licensing role and that is now causing very
considerable angst in terms of reality. If the local authorities
were inadequately able to discharge their responsibilities under
the Act because resources were not available to them, what implications
would that have for you?
Mr Dean: I find that very difficult
to answer. All we can do is ensure that that unfortunate situation
does not occur by liaising with the local authorities' association
which we are planning anyway, and by the process of guidance which
will be issued to them. If the local authorities simply were not
able to play their part under the new legislation for lack of
resources, that would clearly be an unsatisfactory state of affairs.
Q154 Lord Brooke of Sutton Mandeville:
I should say that the Local Authorities' Association played a
more than adequate part in the transactions on the Licensing Bill.
The outcome does not appear to have been wholly satisfactory.
Mr Dean: As I say, I am hoping
that by a process of close liaison with the local authorities
we do appreciate that this is a new area for them and they show
every sign of wishing to be heard and wishing to be ready for
what requires to be done when it requires to be done. I suppose
to some extent one can hope that, to the extent that the Licensing
Bill has been an unfortunate precedent, lessons may be learnt
from that.
Chairman: I am sure that the planning
issue which involves the local authorities will come up shortly
when we talk about casinos and one or two other things. Can we
move on now to the area of social responsibility?
Q155 Lord Falkland: What is your overall
view of the licensing objectives which appear to us to be (as
they should be probably) onerous and complex? We realise that
the Gaming Board at present has no powers in relation to problem
gambling. How do you assess the challenges in balancing the licensing
objectives with the obligation that you will have to permit gambling?
Further to that, what tools will the Commission have to ensure
that operators themselves minimise the social problems (of which
we are all aware) that their businesses may create?
Mr Dean: On the first question,
we thoroughly endorse the licensing objectives. They do in fact
correspond quite closely to what we as a Board have long promulgated
as being more or less universally accepted for the purposes of
gambling regulation in developed countries around the world, so
we have no difficulties with that. Furthermore, we regard it as
highly desirable that they should be spelt out in Clause 1 of
the Bill. It seems to me very desirable. So far as the relatively
new area of problem gambling is concerned, whilst you are quite
right in saying that the Board does not have a statutory remit
in relation to problem gambling at present, that does not mean
to say that we take no interest in the matter. We long have. We
were early sponsors of GamCare and Tom Kavanagh is one of the
trustees of the Gambling Industry Charitable Trust and Geraldine
Lissenburg sits on its research panel. So it is an area in which
we do take considerable interest now even though we have no formal
statutory obligation to do so. The new obligations will be the
subject of codes and the codes will be referred to as necessary
in the licences which operators get and so there will be effective
sanctions to ensure that they are enforced and that proper canons
of social responsibility are observed. This is a problem which
confronts regulators around the world and there are plenty of
precedents upon which one can draw to devise the norms which should
apply in this way.
Q156 Lord Falkland: Thank you very much
for that. The Committee notes that your Secretary, Mr Kavanagh,
is a trustee of the Gambling Industry Charitable Trust. Would
it be fair to ask him now to respond to the criticism which has
appeared from some quarters that the Trust lacks independence
and that perhaps there might be a separate body created charged
with allocating funds which go to the Trust?
Mr Kavanagh: I will do my best.
In terms of independence the Trust is taking major steps to improve
that. They have just appointed a new Chairman completely independent
of the gambling industry and now that he has been appointed they
are going to appoint more independent trustees, such as myself,
so that they will then be in the majority of the total number
of trustees. They are moving very significantly in the way of
independence. What has also been discussed, and no doubt when
you see the Trust they will be able to give you more detail, is
that within the Trust we are moving to a situation where it will
be the independent panel which will look at bids for resources,
if you like, judge them and make recommendations to the whole
Trust as to what should be accepted and what the amounts should
be. Even within the Trust, therefore, there is a move to separate
the activities of the independent trustees from the industry-based
ones, so it is making a large move in the direction of independence.
It is not planned at the moment to have two separate bodies.
Q157 Lord Mancroft: Bearing in mind the
new objectives you are going to have in the area of social responsibility
and problem gambling, would it not be helpful for you to have
a benchmark at the time the Bill is given Royal Assent to monitor
problem gambling? Various people have suggested a new Prevalence
Study should be established or some other form of research. Would
it not be helpful to have that benchmark at that time so that
you can monitor things going forward?
Mr Dean: I am not sure that there
is sufficient evidence of change since the 1999 Prevalence Study
was done to justify a new Prevalence Study as it were immediately
at the start of the Act. I am not suggesting that the industry
has stood still but I do not know that there has been radical
change such as to invalidate that. I do not think it is necessary
and we certainly would not want to see anything which held up
the progress of the Bill.
Q158 Lord Mancroft: Would you have plans
to put in place some body to monitor this as time goes by?
Mr Dean: Oh yes, there will certainly
be a series of studies to test what is happening over time.
Q159 Chairman: I am asking my Clerk to
look up the reference, but I do recall on Tuesday asking the minister,
Lord McIntosh, about this issue. He made it quite clear that he
wants to see a Prevalence Study. Lord Mancroft asked him if he
had any plans to conduct a further Prevalence Study, as he has
just asked you, and Lord McIntosh said: "The first step that
we would do is conduct a simpler study of the prevalence of different
forms of gambling closer to the date of implementation of the
Act than that which we published in June 2000 . . .", so
I think that is something that is going to be added to your workload.
Mr Dean: It sounds as though I
am in trouble with the minister. Clearly, we will do whatever
is required. I perhaps need to discuss this with the minister
anyway and we might have a view on it. What I would not want to
see is resources diverted from what your Committee has identified
as being a challenging task unless it is absolutely necessary.
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