Examination of Witnesses (Questions 1-19)
16 DECEMBER 2003
LORD MCINTOSH
OF HARINGEY,
MR CHRIS
BONE, MS
ELIZABETH HAMBLEY
AND MR
GREIG CHALMERS
Chairman: I am sorry we had a fire drill
this morning but I do thank everybody for their patience and for
so speedily returning to the Committee room. Can I welcome Lord
McIntosh, Parliamentary Under-Secretary of State for Media and
Heritage at the Department of Culture, Media and Sport, and the
officials he has brought with him who have already been helpful
to the Committee in our informal sessions, Greig Chalmers, who
is the Bill team manager at the DCMS, Chris Bone, Head of the
Casino, Bingo and Lotteries team and Elizabeth Hambley who is
the Legal Adviser at the DCMS. This is a public evidence session
and a transcript will be produced and placed on the internet.
In the unlikely event of a division the Committee will suspend
for ten minutes and the public gallery will be cleared. I think
it is extremely unlikely there will be any division before around
12.30 when we hope to end. Information for witnesses and a note
of members' interests which we will declare in a moment are available.
Can I make a general point at the start of our proceedings, that
this Committee is not tasked with producing a White Paper on Gambling
but our focus is on the draft Bill and on the extent to which
we think at the end of the process the draft Bill achieves the
Government's policy objectives and where those objectives are
taking us. Can I also remind witnesses to speak up as these rooms
do not have particularly good acoustics. This being the first
public session of the Committee, we are anxious to ensure that
everyone is fully aware of the experience and interests that some
of us have which I think very largely dictated why some of us
were asked to serve on this Committee, because of our experience
in gambling policy. So I will ask colleagues very briefly just
to make a public declaration at this first meeting only. If I
can begin, I was the Shadow Minister for Gambling for five of
the past six years, while much of this policy development was
taking place. I have two consultancies which indirectly impinge
on the Bill. I am a consultant to a public relations company,
College Hill, one of whose clients is the Tote. I also advise
the Institute of Sales Promotion, some of whose members are interested
in clarification on the law of price competitions. Along with
many other members of the All-Party Racing Committee, as a former
chairman I have the use of a Race Course Association badge and
I have received hospitality at various race courses at various
times over the years, and they are all declared.
Lord Faulkner of Worcester: I am a former
adviser to Littlewoods Leisure and a trustee of the Foundation
for Sport and the Arts.
Viscount Falkland: I have no formal interest
to declare except that I have an interest in owning a horse which
is temporarily out of training but hopefully will come back soon
after injury. Over the years I have developed quite a wide acquaintance
with people professionally involved in the racing industry and
also have a limited number of people who I know quite well as
bookmakers and also in the world of spread betting.
Lord Walpole: I am Robin Walpole, a Cross
Bench Peer, therefore I am the only independent person here. I
have no financial interests in any of the things we are involved
in.
Lord Mancroft: I am Benjamin Mancroft,
a Conservative Peer, I am chairman and shareholder in a company
which is licensed as an external lottery manager. I also chair
three charities which promote their own lotteries under the 1976
Act. I am a director of a company which provides content for mobile
telephones, quite a lot of which will be used in gaming products
but not in the UK market. I am also a member of the Lotteries
Council. As far as I can remember that is all I have to declare.
Mr Page: My name is Richard Page, I have
been involved with horses and race horses for quite a number of
years. I have two less than successful race horses at the moment.
I have a couple of bookmaking accounts. I am joint chairman of
the All-Party Racing Committee. I go to a number of race courses
and I receive hospitality from a number of the organisations that
go to the race courses. I also am in possession of the Race Course
Association's badge which enables me to get access to race courses.
Lord Brooke of Sutton Mandeville: My
name is Peter Brooke, Conservative Peer, and a small shareholder
in London Clubs International and I have a telephone account with
Ladbrokes. At the intangible level I was Secretary of State when,
with my junior minister, I took the National Lotteries Etc Bill
through the House of Commons. My former constituency employed
about 5,000 people in gambling in one way or another.
Tony Wright: I am Tony Wright, Member
of Parliament for Great Yarmouth, a seaside resort. I also have
an interest in a horse with four other colleagues. They tell me
I have one of the legs but there are only four so I do not know
what that means I have! That is my only interest and also I am
a member of two local casinos in my constituency.
Jeff Ennis: Jeff Ennis, Labour Member
of Parliament for Barnsley East and Mexborough. I am the only
joint chair of the All-Party Racing and Bloodstock Group. I am
also in receipt of an RCA badge and I have received hospitality
from various sources at various race courses in that capacity.
I, like Tony Wright, have one of the legs of this horse.
Chairman: Which I have to declare is
trained in my constituency!
Baroness Golding: I am Baroness Golding,
Labour Member of the House of Lords. I too have a badge from the
Race Course Association and I attend quite a number of races and
am treasurer of the All Party Racing Group.
Lord Wade of Chorlton: I am Oulton Wade,
Conservative Peer. I am a minority shareholder in Arena Leisure
and Sportec, and my son-in-law has a consultancy in which some
of the companies he advises are in the gambling industry.
Mr Meale: I am Alan Meale, Labour Member
of Parliament for Mansfield in Nottinghamshire. I also have to
declare an interest, I am employed as an adviser for a small fee
to a financial PR company which is not engaged in politically
lobbying at all but one of the clients is the Tote. I am also
a part owner in the same race horse as my two colleagues, which
we were strongly advised had the breeding but unfortunately so
far not the pace. I also am in receipt of an RCA badge for visits
to race courses whenever the opportunity arises, which has not
been for a very long time recently. Could I also declare today
that I am chair of a registered charity which is connected with
a football league club which sometimes gets small amounts of money
out of the pools revenue from the Football League.
Dr Pugh: I am John Pugh, Liberal Democrat
Member for the seaside town of Southport. I think I have no declarable
interests.
Lord Donoughue of Ashton: I am Bernard
Donoughue, a Labour Peer, chairman of the Starting Price Executive,
chairman of the British Horseracing Board Commission on Stable
Staff, secretary of the All-Party Racing Group, ex-president of
Gamcare. I am part owner of the same great race horse with Lord
Falkland, currently resting, and beneficiary of much hospitality
and a badge, and a small shareholder in Stanley Leisure.
Q1 Chairman: I am grateful to colleagues.
I hope that is helpful. I think it does indicate we do have some
experience in these matters. The only concluding remark I would
make is that the race horse trained in my constituency owned by
some of my colleagues is called Theatre Bell should you wish to
study the horse's racing. If we can now move on, we have a lot
of ground to cover in the next two hours. I have already had a
brief word with Lord McIntosh and my colleagues and we will try
and keep our questions brief and tight and similarly the answers
so we can cover all the ground. Just as a general point, I can
confirm that this is only the start of what is going to be about
three months of taking oral evidence, so there is plenty of opportunity
for further clarification or further comment. We do not have to
necessarily conclude all the answers today but we will go over
much of the ground on which we will be concentrating; those parts
of the Bill which we think deserve greatest attention. Can I begin
by asking you, Minister, about the work of the Gambling Commission
and also local authorities. For the Commission to work efficiently
and carry out its many transitional responsibilities effectively,
it will require considerably more resources and additional expertise,
compared to the Gaming Board. What are you and the Gaming Board
doing now to plan this process?
Lord McIntosh of Haringey: Chairman,
you are seeing Peter Dean of the Gaming Board on Thursday, so
he can give you more detailed answers, but in summary we are working
closely with the Gaming Board to work for the establishment of
the Gambling Commission. We have given them extra money for that
purpose, half a million pounds, and we have together with the
Gaming Board employed the services of a consultancy, PKF, who
have produced two reports for them and for us about the planning
of the transition, one on the tasks and likely costs of the Commission
and the structure and the second, which followed on the previous
work, on the implementation process. You mentioned local authorities
in your preamble, of course we are in regular discussion with
the local authority associations.
Q2 Chairman: It is accepted that the
Gambling Commission's remit is going to be considerably wider
than that of the Gaming Board?
Lord McIntosh of Haringey: I accept
the premise of your question, which is that the Gambling Commission
will both have a wider range of responsibility and greater powers.
Q3 Chairman: You therefore accept that
its efficiency in regulating and expanding the gambling industry
will be very dependent on it having the resources to put those
powers into practice?
Lord McIntosh of Haringey: That
is why we have allocated the extra expenditure and we will be
allocating the necessary expenditure for the Gambling Commission
when it actually takes over its responsibilities.
Q4 Chairman: When the Financial Services
Authority and also when Ofcom were established, shadow authorities
were established first. Why did the Government not think fit to
establish a shadow commission?
Lord McIntosh of Haringey: It
is a very different case. The Financial Services Authority was
composed of a very wide variety of existing regulators, some of
them statutory and some of them non-statutory, none of whom had
formally worked together in the past. Ofcom was composed of seven
different statutory regulators, both from telecommunications and
from broadcasting, from radio and from television, and again although
they had worked together they were different organisations which
had to come together. The Gambling Commission is being formed
from the Gaming Board and we expect that the chairman and members
of the Gaming Board will be part of the Gambling Commission, and
we have beefed up the membership of the Gaming Board by appointing
three new commissioners specifically for that purpose. So it is
a single body turning into a larger and more powerful new body.
Q5 Chairman: Is it therefore expected
that the Gaming Board in this greater position of strength you
refer to will want to work with the industry as the legislative
process goes forward in order to prepare the industry as well
as the new Commission for the new regulatory framework?
Lord McIntosh of Haringey: Yes.
I already said it is working with local authorities. I could and
should have added it is working also closely with the gambling
industry as it works towards its new powers and responsibilities,
and that will no doubt be confirmed to you by your witnesses from
the gambling industry.
Q6 Lord Faulkner of Worcester: I have
two questions about regulation also, Minister. First, can I ask
why it is that it is proposed that the Gambling Commission should
cover all forms of gambling bar two? Why is it not also covering
the National Lottery and spread betting?
Lord McIntosh of Haringey: As
far as the National Lottery is concerned, we addressed that issue
in the 2002 Lottery consultation and the answer is very simple,
the National Lottery has as its prime responsibility the protection
of the users of the National Lottery, those who bet in the National
Lottery, but subject to that to maximise the payments to good
causes. In other words, the Government has an interest in the
outcome of the National Lottery. For the Gambling Commission we
do not have any such interest, we are holding the ring, and we
think it would be unfortunate and indeed could well be resented
by the industry if we had a single Gambling Commission in one
part of whose responsibilities we had a financial interest and
in the other part we did not have a financial interest.
Q7 Lord Faulkner of Worcester: Can you
confirm you agree with the view of Baroness Blackstone expressed
in the House of Lords that the National Lottery is part of the
country's gambling industry?
Lord McIntosh of Haringey: Yes,
indeed, but I think that is a textual point rather than a point
which relates to the existence of a National Lottery Commission
and a Gambling Commission, where I think, as I say, the gambling
industries—and I will always use the plural—would
find it odd to find themselves regulated by a body part of whose
other responsibilities included maximising returns for good causes
rather than the strict regulation of gambling. There would be
a potential conflict of interest there.
Q8 Lord Faulkner of Worcester: I will
ask you to go back to spread betting in a minute but perhaps I
can ask my second question. I do not feel you have identified
the conflict of interest within the National Lottery Commission
itself, in that it has a duty to protect the public as you very
rightly say but it has also got a duty to maximise the revenue
of the Lottery. How can they do these two jobs and there not be
conflict?
Lord McIntosh of Haringey: Because
they are not parallel jobs, because the primary responsibility
of the National Lottery Commission is to ensure that the Lottery
is run properly and that players' interests are protected, and
only subject to that to maximise returns to good causes. Between
the primary and the subordinate objectives, there cannot be a
conflict of interest.
Q9 Lord Faulkner of Worcester: Can you
go back to spread betting?
Lord McIntosh of Haringey: Spread
betting is regulated by the Financial Services Authority. As far
as we know it works. Our view is, if it ain't broke don't fix
it. If there were to be any evidence at any later stage that spread
betting ought to be regulated by the Gambling Commission rather
than by the Financial Services Authority, we have powers in the
Bill which would enable us to do that.
Q10 Lord Wade of Chorlton: May I ask
what thought you have given to the way in which premises' licensing
and planning permission interact, particularly with reference
to appeals procedures?
Lord McIntosh of Haringey: An
awful lot of thought, because it is a very difficult and complicated
subject. I think you can take an analogy from the Licensing Bill,
although the Licensing Bill was by no means perfect in its parliamentary
processes. Basically, we are proposing, as in the Licensing Bill,
that local authorities should license gambling premises rather
than licensing magistrates, and that is the same as alcohol and
entertainment licensing. In some cases but not all cases there
will also be a need for planning permission. For example, if there
is a new building or major alterations to an existing building,
or if there is a change of use class then there will be a need
for planning permission. It might be thought that this was putting
applicants through dual jeopardy, in other words they would have
to go through one planning process and one licensing process.
We have provided for that by saying that somebody who wishes to
open gambling premises and who will need planning permission may
obtain from the licensing authority a provisional statement that
if and when they get planning permission they will get a gambling
licence. So they can do that first, they are not wasting time
getting planning permission which they would need in any case,
and they have not lost anything as a result. I think the two things
fit together quite well.
Q11 Lord Wade of Chorlton: Our concern
is that, by using the planning system, people objecting to a development
of a gambling site may use those to delay the process, as they
can under normal planning procedures, which might be acceptable
to the Gambling Commission and acceptable by the local authority.
Lord McIntosh of Haringey: The
right of appeal is different. The right of appeal on the grounds
of planning permission is very limited, in fact it is virtually
limited to judicial review. A gambling licence is we recognise
potentially a contentious issue, and in those cases, in parallel
with alcohol and entertainment licences, we do think local people
ought to have a wider right to object than that which is provided
by judicial review. So there is only one hurdle to overcome but
it is a hurdle which is proportionate to the potential degree
of public concern.
Q12 Chairman: You do obviously from your
answers appreciate the concern that if there were to be, for the
sake of argument, a major proposal for a casino resort in one
of our seaside towns supported by a Regional Development Agency
with generally planning consent effectively granted by that process,
the fact the public could then appeal against the granting of
the licence could be an impediment to progress and might give
the public a false impression that they could stop this when in
reality they probably cannot.
Lord McIntosh of Haringey: You
are asking now about resort casinos and we have made it clear
that we think that the identification of preferred locations for
resort casinos should be the responsibility of regional planning
bodies rather than local authorities themselves, and they will
have to make such arrangements as they think fit to consult the
local authorities in their area. So resort casinos are a little
bit on one side.
Q13 Chairman: We will come back to them,
but the point I am trying to make is that it is the bigger developments
which are likely to generate a greater public hostility.
Lord McIntosh of Haringey: Or
public support.
Q14 Chairman: That is also true.
Lord McIntosh of Haringey: If
you have consultation and you mean it, you must be prepared for
hostility and/or support.
Chairman: Can we turn now to issues relating
to the social implications of the Bill. Lord Mancroft.
Q15 Lord Mancroft: Minister, could you
tell us what estimates the Department has made about the potential
impacts the proposals in the Bill are going to have on problem
gambling? I should declare an interest as chairman of a charity
which provides care in that sector. Could you tell us what the
Department has done to look at that?
Lord McIntosh of Haringey: Again,
we have taken this enormously seriously, and that is why of course
amongst the three objectives of the Gambling Commission the other
two are the elimination of crime, the exclusion of crime and fair
play for those participating in gambling, but the third one, and
it runs through everything that the Gambling Commission has to
do, is the protection of children and vulnerable adults. I think
we supplied you a note on this subject which I hope is helpful.
Basically we acknowledge there is a risk, that the greater availability
of gambling, which will certainly be part one of the effects of
the Bill, involves a risk that the amount of gambling and therefore
the amount of problem gambling will increase. But having said
that we have taken the view that in what I call destination gambling—in
other words where you have to make a positive decision to go into
a location where gambling takes place, rather than casual gambling
which is thrust at you at the street corner—there is likely
to be less increase in problem gambling than there is from casual
gambling. I am confirmed in that view by a visit we made to the
United States the week before last in which the Problem Gambling
Councils in Washington and the Gambling Regulatory Boards in Nevada
and New Jersey confirmed to us that was the case. Within the scope
of a bill which is fundamentally a deregulatory bill, we will
take whatever steps are necessary to minimise problem gambling
and any increase in problem gambling.
Q16 Chairman: Just a point of information.
You said you had prepared a note on this, we have not received
any specific note on this issue, but we are aware of the argument
in the Policy Document. Is there anything additional to what is
in the Policy Document?
Mr Chalmers: I think what the
Minister was referring to was Chapter 6 of the Policy Document.
Chairman: Yes, we have that. Okay.
Q17 Lord Mancroft: Can I ask you if you
have any plans to conduct a further Prevalence Study before the
Bill is given Royal Assent so we can have some form of benchmark
coming forward?
Lord McIntosh of Haringey: I think
that would be very valuable. 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, which was based on field
work in 1999. So I acknowledge that could be out of date. We will
establish whether it is out date and if it is shown to be out
of date then we will have to consider whether to conduct a full
Prevalence Study which involves not only identifying potential
problem gamblers but screening them with psychometric testing
which is a rather expensive process.
Q18 Viscount Falkland: Can I ask about
the term "problem gambling" which presents a problem
for many people and to us as well I think. Most people have an
idea of what it means but is it not the case that problem gambling
like problem drinking is an insidious thing? Statistics on problem
gambling probably refer to people who have a recognisable and
possibly treatable gambling addiction. Problem gambling, I am
sure you would agree, embraces a lot of people who do not necessarily
form part of the statistics. If I could just give the example
of a young man, recently married who has a low income who gets
involved in dog racing, it becomes a habit and he starts to deceive
his family as to the extent of it on a limited income. That is
just an example but it is quite widely spread, as you know, amongst
people who gamble, it may be only temporary but nevertheless it
is problem gambling and it spreads across a wide social area.
If that generally meets with your approval as an assessment of
it, in what way does the Bill address this problem of this definition
and introduce a proper observation and detection of this kind
of insidious gambling which is not necessarily addictive in the
case that alcohol might be to an addictive drinker rather than
a heavy social drinker? How do you propose to meet these and possibly
to provide a better definition?
Lord McIntosh of Haringey: I think
you will find that people disagree very much about the definition
of problem gambling. I think you will find your own special advisers
disagree with each other about the definition of problem gambling.
Q19 Chairman: Indeed they do!
Lord McIntosh of Haringey: I went
to a casino a couple of months ago, a high-rolling casino in London,
where in my presence a man was losing £1½ million and
his wife was sitting beside him. I would not define that as problem
gambling, he could clearly afford it. But your example of a young
married couple and somebody who loses £5 or £10 could
be a problem gambler. A lot of people say it is addictive and
you can distinguish, you can have even physical tests let alone
psychometric tests, which identify those who are prone to problem
gambling. I think my answer to you must be that I do not want
to get very much involved in definitions. The safeguards which
we are proposing include licence conditions for all operators
about the protection of the vulnerable, codes of practice spelling
out how those conditions are to be fulfilled, issues like speed
of play and information to players about expenditure, staff training,
publicity about help lines and so on, unlimited fines for non-compliance,
limits on numbers and payouts of machines outside casinos—I
think this is enormously important—and so on. So I think
we are taking steps which would cover all forms of problem gambling,
whether it is addictive or not addictive.
| 
