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My final point on these machines concerns the levy, which I hope I will be forgiven for mentioning, because it is an important part of this matter. All of this is part of a progressive downwards pressure on the process of bookmaker profit being taken into account for the calculation of the levy—certainly in response to the Donovan Commission. The Government have let the toothpaste out of the tube regarding the whole area of bookmakers’ control of what goes on in betting shops and this has taken the bookmakers’ claim of an appropriate levy down from the £110 million mark to around £90 million. They have done so by upturning what, over the years, has been a traditional arrangement under which all betting, of whatever type, was included in the levy calculation, including foreign betting. All that is out of the present equation and I believe that, as they reactivate the levy, the Government should be looking to return the levy calculation to the original basis on which it was formed some 20 years ago. Those are important points to which the Government should return.

Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord, Lord James. I promised not to repeat my speech and I shall not do so. However, I hope that, in replying, the Minister will make it clear that the details of what was an agreement between the Association of British Bookmakers and the Government in 2004 will exist until 31 August this year and that, from 1 September, the Gambling Commission will control how fixed-odds betting terminals can operate. At that time, the Secretary of State made it clear that these terminals were on probation, and I hope that the Minister will make it clear in his reply that that is still the case.

Lord Clement-Jones: My Lords, from the discussion that we have just heard, it is clear that there is more history to this matter than I had thought. Looking back to the passage of the Bill and the discussions leading up to it, which the Minister will remember only too well, some of the most contentious issues involving many different interests across the industry were machine categories, prize money and so on. Speaking for these Benches, with one or two exceptions, to which I shall come, I think that the Government have taken a relatively cautious approach to these orders and, in the circumstances, have put forward a reasonably balanced set of proposals.

I can well understand the slight frustration of the noble Lord, Lord James, at the orders being taken piecemeal. The Minister in the other place confirmed that another 14 orders are due to be tabled in the next month, so no doubt we will be in for a treat when we return in October. In a sense, it is to be regretted that all the drafting did not take place at the same time, and the Section 240 regulations, in particular, should be seen in that context.

In contrast to the noble Lord, Lord James, and like the noble Lord, Lord McIntosh, I take some comfort from the assurances that have been given about the review of the operation of FOBTs by the Gambling

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Commission, which will take place in due course. As the noble Lord, Lord McIntosh, confirmed, the Gambling Commission should be the body that carries out that review, and it needs a period of time to see how FOBTs are operating. The whole purpose of that part of the Bill was to bring FOBTs within a proper form of regulation, and that is one of the beneficial aspects of what is now the Act.

I also particularly welcome what the regulations have to say about category D machines, which we debated during the Committee and Report stages of the Bill. We were firmly of the view that this kind of very limited type of machine should be available and we are pleased to see that the regulations enshrine that in a limited form. I know that this is somewhat controversial and that the BCA does not necessarily welcome it but we are pleased with the proposals on wholly automated gaming tables and the minimum number of players set by the Government.

However, there are some aspects of the regulations on which I should like to press the Minister for further and better particulars. The issue of the B3A machines is extraordinary. Clearly, there was a considerable amount of to-ing and fro-ing on the consultation, but including a special category for working men’s clubs and members-only social clubs is somewhat extraordinary. I heard the Minister say that the proceeds go to charity and so on, but are these machines really that much safer without the interval in private clubs? In fact, children are more likely to be in private clubs than they are to be in commercial premises, so I am not sure that his arguments stand up.

On a more general point, is there sufficient time to reconfigure the machines by 1 September? I understand that some 300,000 machines may have to be reconfigured, and I should be interested to hear the Minister’s comments on that. After all, especially if we are to hear from Brussels about the interval point only at the end of August, the industry will have rather a short time in which to adjust to these regulations.

The fact that the Section 240 regulations will not be available until a few weeks’ time, when the cost of labelling has been estimated at some £3 million, also seems to put the industry at a disadvantage. We do not have a compliance cost assessment for a future set of regulations, but I should be very interested to hear whether the Minister agrees that the labelling process will cost some £3 million.

I turn to the subject of the operating licence conditions. No doubt the Minister read the debate in the other place on the report of the delegated powers sub-committee, but he will be only too aware of the problems facing the bingo industry, including the problem of prize-gaming levels. It voluntarily accepted the smoking ban but that will create some economic problems. Can the Minister envisage any review mechanism to raise the prizes which are being set in these regulations?

The Minister in the other place stonewalled, as he had to, being a spokesman for culture, media and sport, but I hope that the Treasury will read these proceedings because one big issue for the bingo industry is VAT on participation fees. That puts it at a disadvantage compared with almost every other section of the industry. We on these Benches would be extremely grateful if the Minister could comment on that.

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With those exceptions, I think that the Government are putting forward a fair package of proposals.

Lord Howard of Rising: My Lords, the last time the Minister and I debated gambling orders, I urged the House to support Her Majesty’s Government’s position. The result was that, only for the third time since the War, an order was overturned in the House of Lords.

I do not suppose that the same thing will happen today, although, in view of the Government’s increasingly sensible gambling policy, the best thing would be for these orders to be withdrawn to give time for yet more common sense to be introduced. In the mean time, there are important things in the orders that need to be addressed, as my noble friend Lord James of Blackheath pointed out during a recent debate and as the noble Lords, Lord Clement-Jones and Lord McIntosh, pointed out this evening.

I also urge the Minister to listen to what my honourable friends Anne Milton and John Greenway said in another place. They condemned the curious situation of existing casino licence holders being allowed only 20 gaming machines but new licence holders, subject to the number of tables, being permitted to have 80. Over two years ago, the justification given for this by Her Majesty's Government was the need to proceed cautiously. No one would quibble with that wish—indeed, we would support it—but it seems odd that casinos that have been in existence for some time, have been regulated and not found wanting, should not be given the same allocation as new and unproven arrivals to the industry. Existing licence holders may, of course, apply for the new licences, but that would be coincidental. The situation is still anomalous.

Earlier today, a Statement in another place pointed out that in September the Gambling Commission will publish the outcome of its prevalence study. I hope the Minister will look at that and, if necessary, react promptly to its findings rather than wait for the 2009 review.

Lord Bilston: My Lords, the contribution of the noble Lord, Lord Clement-Jones, was quite selective about the needs of bingo halls, but he also raised questions about the needs of working men's clubs. It is not just about working men's clubs but also about Liberal clubs, Conservative clubs and all kinds of clubs that are private members’ clubs which will be helped by these regulations. I hope that the House recognises that over the past few years working men's clubs have suffered considerably, very often because of legislation passed here and in the other place, and which is now on the statute book. That has caused considerable difficulties for working men's clubs and other clubs. This is an attempt to help clubs to get through what is a very difficult trading period. Throughout the country, we have seen many clubs close because of the great difficulty, in today's competitive climate, of meeting the needs of their members.

I repeat that such clubs are private members' clubs and mention was made of children playing on the machines. In such clubs, children are well supervised and the clubs are well structured and well run. It is the responsibility of committee men and women in all such institutions to ensure that children do not take

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advantage of what happens in other areas; for example, in bingo halls where abuse does take place. I urge the House to support the regulations because we will be giving working men’s clubs a useful uplift at a time when they are in desperate need of the help that we can give them by passing these regulations.

8 pm

Lord Davies of Oldham: My Lords, perhaps the House will forgive me if I start at the end. I am grateful to my noble friend for putting forward a constructive perspective with regard to clubs. I am also grateful to him for reminding the House that we are talking about all private clubs—Conservative and Liberal clubs as well as working men’s clubs and miners’ clubs. He was right to emphasise that the lift given will affect all clubs; they will benefit from the new regulations.

I understand the point made by the noble Lord, Lord James. He would have preferred us to take all six instruments together. As the noble Lord, Lord Clement-Jones, hinted, we have many more regulations to put before the House to implement the very complex Gambling Act. These regulations are being prepared against the background of the Act coming into force on 1 September.

I have no doubt that the noble Lord, Lord James, will be able to draw a skein of consistent thought through all the instruments and would wish to debate them all. Their management is quite difficult, particularly as there are more likely to be divisions on instruments in another place rather than here. Consequently, putting so many together would raise very real problems. We have tried to group them together under the subject matters that they cover.

As the noble Lord exemplified last week, the issue of the gaming machines in bookmakers has a potential impact on the levy. I understand his point on that but we hope it will be limited. Those gaming machines are not quite as extensive in their impact as he suggested. I hope he will forgive me for not retracing the whole debate that we had last week on those three orders. I am not sure I would win many friends in the House if I did that.

The noble Lord, Lord James, emphasised one dimension, which is cartoon racing. We have no evidence at the moment that that is a problem, and I assure the House that the Gambling Commission has the powers to act if it becomes clear that it is one. Of course, the Government have set out to legislate as comprehensively and as accurately as possible. These instruments are designed precisely to tackle certain aspects and to give effect, in detail, to the legislation that we passed two years ago. However, it will also be appreciated that there may be areas that we have not covered with sufficient rigour.

The noble Lord, Lord James, was keen to emphasise that some developments in gambling show ingenuity that surpasses even legislators who try to conceive of problems. The only reassurance I can give him—it is a real reassurance—is that the Gambling Commission has the powers to act when it identifies an issue. It has been set up within the framework of an Act and it operates against an Act whose prime objective is the protection of vulnerable people—children—from

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gambling, but it is expected that there will be some abuses. Techniques and technologies will be developed that have not yet been identified. If they become an abuse, the Gambling Commission has the power to act and will not hesitate to do so. We have a broad framework of legislation and the right instruments to guarantee that, however ingenious and fertile the minds are of those who want to separate gamblers from their money, the Gambling Commission is in a position to respond to that positively.

The noble Lord, Lord James, also said that there is no control over the maximum stake on category B2 machines, but there is. There is a £100 limit and no scope to breach that limit. I hear what he says about the punter getting round that, as can those offering the machines as regards the frequency with which the bets are laid. We shall ensure, with other regulations, that a stake up to that maximum may be made only in tranches of up to £10. We have a regulation in mind that will control the amount a punter is likely to apply. The noble Lord will have a chance to look at the regulations when they come before the House in due course. I assure him that the Government have anticipated potential developments in this area and identified one or two to which we shall respond.

I can reassure my noble friend Lord McIntosh, who has had to leave the Chamber. I know it is the custom of the House not to reply to someone who is not present, but my noble friend had immense responsibility for the Gambling Act and he is an authority in this House. Therefore, when he raises questions I take them very seriously, even if he will only see the answers in Hansard tomorrow. I emphasise to him that the voluntary code certainly applies up to 31 August. From 1 September, the Gambling Act will be in place of the voluntary code so that we move into full legislative rigour at that time. He also asked whether fixed-odds betting terminals were on probation and whether there were issues with them. Certainly so; we are aware that they potentially present a real problem. If it becomes clear that there are abuses, we will not hesitate to act. The noble Lord, Lord James, has done the House a service. He is not the only one. During the passage of the Gambling Act we had discussions on these issues. Certain aspects of fixed-odds betting raise these problems, and he is quite right to emphasise them as he did last time we met on statutory instruments. I assure him that we expect the Gambling Commission to act if problems become acute.

The noble Lord, Lord Clement-Jones, lamented the delay in laying Section 240 regulations and the uncertainty for operators. The regulations are being finalised, following extensive consultation with the industry. The overwhelming majority of existing machines are not going to require a great deal of adaptation to be fully compliant with Section 240. It is possible to exaggerate the difficulty for the industry but, where some adaptation is necessary to comply with the regulations, we are building in lead times which the industry has on the whole accepted. We ought not to be too anxious about that.

The noble Lord also raised the question of the B3A machines, the special category for clubs. The whole point about the special category B3A is borne in mind

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in the contribution of my noble friend Lord Bilston, which mirrors representation we have received from across the country. We want to enable clubs legitimately to raise funds, while removing what were effectively unregulated gaming machines which could have prizes as large as £2,000. That gives rise to risk because, as has been freely acknowledged in the House this evening, such clubs have wide access for the public, including children, so it is right that we address those issues.

On the broader issue of the bingo industry, I recognise the representations. The noble Lord, Lord Clement-Jones, emphasised his anxieties. We have already allowed bingo clubs to play prize bingo without limit from 1 September. On the other limits, there will be review opportunities in due course, so I assure him that we will watch the position. Of course, the bingo industry has a substantial record and history of giving broad and innocent amusement to large numbers of our fellow citizens. As long as it is within bounds—again, there is a great deal of open access to bingo—and operates within the regulations that we have established, it will continue to be a benign form of entertainment.

Bingo halls are, of course, freed of some regulations. They are no longer required to operate as members’ clubs. We have doubled the maximum stake permitted in the jackpot gaming machines in bingo halls up to £1 from 1 August. We are allowing rollovers so that there is potential for higher prizes. Of course, the 24-hour rule has gone, so you can join a bingo club without having to wait for what people always assure me is an interminable 24 hours. We were always told that was an enormous deterrent because people only went to bingo halls on the expectation of instant gratification that very evening. That being so, we have remedied that grievance as identified.

The noble Lord, Lord Howard of Rising, gave his broad support, as did the noble Lord, Lord Clement-Jones, on the Liberal Democrat Front Bench. I am grateful for that. I bear in mind that the last time the noble Lord, Lord Howard, gave the Government his wholehearted support—on the regional casinos—we did not do so well. That story still runs, and I indicate to the House that there has been a statement on the question of regeneration other than regional casino-driven regeneration possibilities. We will debate that within a different framework.

I shall resist the noble Lord, Lord Howard, drawing me anywhere near Treasury matters. I have enough problems dealing with the Treasury when the issue is quite specific to that august institution. This evening, I am speaking on behalf of the DCMS, and sufficient unto the day is that particular burden thereof.

We have doubled the number of gaming machines to which existing casinos are entitled from 10 to 20. Existing operators will of course be free to apply for the new licences created by this Act. They have not been discriminated against, but feel the hot breath of competition from potential new casinos. A large number of existing casinos have fared tolerably well in recent years, and we have no reason to expect them to do anything but prosper within the strict regulations of the Act. I reiterate that the Act has the prime purposes of, first, creating an environment of regulation which we have not had since the 1960s—the Act was hopelessly

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out of date on new developments—and, secondly, to guarantee that gambling is carried out with proper regard to the protection of children and vulnerable adults, to keep gambling as an enjoyable pursuit which does not do social harm.

On Question, Motion agreed to.

Gambling Act 2005 (Lottery Machine Interval) Order 2007

8.17 pm

Lord Davies of Oldham: My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the draft order laid before the House on 11 June be approved. 20th Report from the Statutory Instruments Committee.—(Lord Davies of Oldham.)

On Question, Motion agreed to.

Categories of Gaming Machine Regulations 2007

Lord Davies of Oldham: My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the draft regulations laid before the House on 12 June be approved. 20th Report from the Statutory Instruments Committee.—(Lord Davies of Oldham.)

On Question, Motion agreed to.

Lord Evans of Temple Guiting: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 pm.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.18 to 8.30 pm.]

Local Government and Public Involvement in Health Bill

House again in Committee on Clause 106.

Baroness Scott of Needham Market moved Amendment No. 209ZA:

The noble Baroness said: The most entertaining moments of the Bill have been watching a succession of new chairmen attempt to negotiate the new chair.

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