I have known the Minister for many years—''since 'e were a lad''. When I was head of research at the Amalgamated Union of Engineering Workers, he was a young shop steward who had just joined the national committee of the union. Let me show how old I am: I knew the Minister's father for many years before I had the pleasure of knowing his son.
I will not use the Minister's precise Sheffield words at the end of this morning's sitting, but he more or less suggested that I did not know what the Bill was all about, which was rather unfair, as I was on the scrutiny Committee. He said that amendments on numbers and locations could be considered later in the Bill. I would therefore appreciate his telling us into which clauses they could be incorporated.
The obvious thing for the Minister to do would be to withdraw clause 7 and produce a new clause that is more specific. Given that there was no specification as to numbers when the Bill came into Committee, I do not see where numbers could be specified in the clause, but I am sure that the Minister's officials can come up with something. We would appreciate an indication of his thinking, especially on a new clause.
In the original Bill, there was no cap on the number of casinos; we were told that there would be between 20 and 40 super-casinos, regional resorts, destinations or whatever they are called; the names seem to be interchangeable. The number eight came up and lots of questions were asked about why that number had been chosen.
Resuming my position as the former head of research of the AUEW, I did some research at lunchtime; indeed, I may have discovered where eight came from: officials and Ministers have taken the scientific approach, because, as we all know, eight is the atomic number of oxygen; it is the second magic number in physics; it is considered a lucky number in Chinese because it sounds like the word ''prosper''—pnew, I believe is the right pronunciation. Eight babies delivered in one birth are called octuplets; the first surviving set of eight babies, the Louis-Chukwu octuplets, were born in 1998, so when the new clause is drafted, perhaps it will be called the Louis-Chukwu clause.
If the Minister's officials took a religious approach, in Buddhism, the eightfold path is the way to spiritual progress—
As the Minister has not given us an explanation, those of us who have been thinking about the matter are trying to find out and perhaps to help him, because there must be a reason why eight was chosen. Perhaps it was because it is not safe to be said by wizards on Discworld, which would be a scary reason. Finally, eight is the symbol of infinity, which looks like a fallen eight figure, which must be what it is all about, because infinity is the time that the Minister can take to repent of the Bill and regret the proposals.
The Government have responded to pressures and to opposition to their original proposals, but much of that opposition has bordered on the hysterical. Of course, we have a right, and a duty, as Members of Parliament, to protect the vulnerable, but much of the sentiment expressed on the Floor of the House, in the newspapers and now in the Committee has been sanctimonious and patronising. It is as if those whom we represent are too feeble minded and easily led into temptation, while we politicians are men and women of steely resolve who are disciplined and impervious to temptation.
How many problem gamblers is the hon. Gentleman aware of? Is it more than eight?
Yes, of course it is. But we heard that if the original proposals went through the range was thought to be additional 200,000 to 300,000. Those figures have been plucked out of the air, rather like the figure eight that the Minister came up with for regional casinos. Of course we must acknowledge that there could be a problem. I come back to the point that we seem to be working on the assumption that those whom we represent are too feeble to resist the temptation of going to a casino, while we of course can resist it all the time.
Would the hon. Gentleman agree that one of the reasons why the then Labour Government introduced the Gaming Act 1968 was to deal with those in society who had been tempted beyond their bank balance?
That probably has more to do with the criminality that was attached to gambling at the time. That is usually why licensing regimes are put into effect. I remember having this discussion about betting before 1961. People bet in the pub. I was too young to go into pubs but the hon. Gentleman probably had a bet over his pint. There was clearly a lot of criminal activity and illegality attached to it. So we regularised it, as was right and proper.
Perhaps I am in a minority of one in this Committee, but I have heard general agreement that a capped figure should be used. It has ranged from four from the Opposition to one from someone else. As soon as we have done that everyone starts saying that they want a casino and asking whether their area qualifies for a regional casino. People start putting in their bids. That is what the Minister will have to contend with when we decide how that eight, or whatever magic figure it is, will be allocated.
It is probably a mistake to interrupt my hon. Friend in full flow but those of us who are worried about having a large number of casinos cannot understand how we can have casinos all over the place and still use them to get real, persistent, long-term regeneration in particular localities. How would adopting my hon. Friend's free-market philosophy accord with those regeneration targets?
My hon. Friend does me less than justice. This is not a free market approach. We do not know yet, but we assume that central Government or one of their agencies will determine how decisions will be taken. I thought that local authorities should have the power and the right to resolve and to decide how many casinos they want or whether they want any at all.
The idea that we will have giant casinos on every street corner as if there were space for that to happen is nonsense. It will not work like that. I argue not for a free-market approach but for a systematic approach, based on how the casino industry sees the market, but subject to the local authority's decision on how it is to be done. I have a long background in local authorities and I believe that that is the route we should have chosen.
My hon. Friend repeats an argument that I keep hearing: they should be resort casinos, because it is not possible to have regional casinos. We cannot have casinos on every high street if we are to avoid ambient gambling. I accept that we would not have them on every high street. But my hon. Friend sits in a privileged position. Whatever else we say, we will have one in Blackpool. There seems to be a consensual movement about there being one there. Good luck to my hon. Friend. She is a very good Member and represents her constituents well, but are there no high streets in Blackpool? I assume that the resort casino there will be on a high street. What about ambient gambling among the Blackpool citizenry? Will they, like we steely politicians, be able to resist? If so, why do they all go around wearing ''Kiss me quick'' hats?
It is not the residents.
It may not be, but my hon. Friend need not worry, his secret is safe with me. It is surprising what goes on at Labour party conferences.
Order. We do not really want to know.
Perhaps you do not, Mr. Pike. Sorry, I was tempted yet again.
As a result of the Government saying that there would be no central capping, which is what we were told before, local authorities and operators are way down the road with their plans. A lot of plans have been made and a lot of time, effort and money have been invested in bringing them forward.
My right hon. Friend the Minister has a well developed proposal in Sheffield, and I shall be looking very carefully to see whether—after Blackpool—Sheffield gets a casino. I know from personal experience that he is very well equipped to look after the interests of his constituency, so we, particularly in West Ham, shall be watching very closely to see whether Sheffield gets a casino.
I have the privilege to represent—in part—West Ham United football club. We have all received the letter from Coventry football club. Casinos are planned for Arsenal's new Emirates stadium, for Glasgow Rangers and, with backing from the Football Association, for Wembley. Perhaps Burnley football club, which needs as much help as it can possibly get, if I am not treading too much on your sensitivities, Mr. Pike, should have one.
There has been a broad welcome—[Interruption.] I can assure the hon. Member for Bath (Mr. Foster) that although I have mentioned only some, many of the 92 professional clubs have been considering the proposals and discussing with potential operators and their local authorities the possibility of having a casino. It is very important to football clubs, many of which—unlike my own Chelsea, which has the advantage of Russian roubles—are struggling to make ends meet.
My hon. Friend mentioned the application by Coventry. I carry no responsibility for Coventry, but it seems that its £4 billion redevelopment project, which will include a new football ground and leisure facilities, is based on the idea that it will have a casino. It could well be that a number of developments have predicated their projects and funding on the basis that they will be able to have a regional casino. It appears that that now will not be the case, but many of the developments are a long way down the track. Incidentally, one of the project leaders for the Coventry application is a former Burnley footballer, Paul Fletcher. Would my hon. Friend care to comment on that?
Indeed he was, and therefore, as Mr. Fletcher is working hard to try to get the Coventry casino and, who knows, perhaps the Burnley casino as well, I am sure that you will be sympathetic, Mr. Pike, to the arguments that I am putting forward.
My hon. Friend is correct: planning has been going on for some considerable time. That is because the Government said time after time until very recently—like, today—that there would be no cap on the number
of casinos, and obviously it is prudent to plan ahead. I know that—caveat emptor—one must wait and see what the Bill looks like when it becomes an Act, but the Government now have a responsibility to answer some of the problems identified by my hon. Friend that will undoubtedly arise because of the Minister's recent announcement.
The Committee broadly welcomed the cap, and then the bidding started. There are five potential and existing bids in London and that leaves only three for the rest of the country. One can see the problems that the Government and Members will get themselves into when we have to contemplate how the bids will be allocated. As I said, my constituency of West Ham and the West Ham football club, together with Las Vegas Sands, have progressed some way down the road on plans for a major development in Green street in the east end. We definitely need the regeneration. London should qualify as a regional destination area; it must do, by definition. The east end should get one of the casinos on the grounds of redevelopment potential.
I assure those hon. Members who do not know Green street that there will be little ambient gambling there because it is in one of the strongest Muslim communities in the whole of London, if not the country. I trust that not many of them will be wandering in to bet—assuming that we get one of the casinos. Will the Minister tell me whether London qualifies as an area appropriate for a regional resort destination casino? It would have to be on a high street in London, unless we decide to develop casinos on the Thames, which is an idea I advanced 12 years ago.
I agreed with the hon. Member for Bromsgrove (Miss Kirkbride) when she suggested that auctioning might be a suitable process. I said that 12 years ago. I thought it one of the ways in which the proposed Greater London authority, which I included in my Bill along with a directly elected mayor, could raise funds. Providing that applicants have gone through the necessary screening process, I see no reason why the licence to print money—it will be such now that there will only be eight of these casinos—should not be auctioned off.
If there is to be a cap on the number of regional casinos, what will happen to the large casinos? Will capping have a knock-on effect? There may be a proliferation of large casinos because we have limited the number of regional ones.
I am sorry to have gone on at some length, but that merely illustrates how many questions there are to which we need answers. I hope that my distinguished successor as Sports Minister—a great man whose family I revere and adore—will be able to answer those questions. I fear that the Government, by trying to please everyone, will end up pleasing no one and a dreadful mess will ensue. That is why I return to the point that eight is infinity on its side—the Minister will have an awfully long time to rue his mistakes.
I congratulate the hon. Member for Eltham (Clive Efford) on his measured speech this morning, which was more in keeping with the traditional values of the Labour party and with the spirit of the 1968 Act.
As the Minister is now in listening mode, will he tell me whether eight is a rigid figure, or whether, as the debate continues, the Government will be minded to increase the number, or to decrease it? The listening over the weekend, which must have involved 10 Downing street, was of such persuasive power that the Prime Minister felt that the open sesame approach was not the right way to progress. The Methodist tendency, to which I am signed up, took the view that there must be better ways to regenerate run-down areas of the country than gambling.
If more discussions take place between the Prime Minister and those who are concerned about gambling, is it possible that the figure of eight may be reduced? In the deliberations that have taken place so far, not just during the weekend but in the run-up to it and subsequently, has any estimation been made of the likely number of additional so-called problem gamblers that will be created? The evidence suggests that that figure may be in the region of 300,000, based on the existing betting culture in the United Kingdom. If more casinos—mega-casinos at that—are to be created, one can only assume that some consideration was given to the likelihood that that number may increase.
Can the Minister confirm that the number of high-value category A slot machines that would be established in the eight casinos would match the total number of high-payout slot machines that currently exist in the 130 or so casinos? Eight mega-casinos multiplied by 1,250 slot machines would match the number of slot machines that currently exist in 130 casinos. Can he confirm that comparison?
I would not dream of suggesting that the Minister has personal knowledge of this matter, but he will be aware that in Las Vegas—we are told that Blackpool wants to become the Las Vegas of the United Kingdom—not just casinos, but other extra-curricular activities are rife. I wondered whether consideration had been given to the prospect of other services and facilities riding in on the back of the casino culture. That is a serious point. We are talking about creating a Las Vegas-type culture in eight places in the United Kingdom. The Minister, his officials and those who have drawn up the Bill must be aware that there is more to Las Vegas than casinos.
I want to begin by saying how much I agreed with what the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) said this morning. As she is aware, I was in at the early stages of Blackpool's process of planning for casinos, when we were still just calling them resort casinos. She has had the opportunity to see the later developments. As a current Member for one of the Blackpool constituencies and a former Member respectively, she and I are arguing the same case. I
referred earlier to the helpful briefing that I received yesterday from the chief executive of Blackpool council and one of his senior officers.
We now have an opportunity to consider the matter again. The Government's sudden U-turn has left us effectively with a blank page, on which the Committee and the House as a whole will, I hope, have a chance to write. We have an opportunity to look again not only at what is needed for the regeneration of our run-down resorts, but at how the money that may be raised in those resorts by casinos will benefit local people. I hope that the hon. Lady agrees that one of the crucial things will be the mechanism by which part of the profits from any casino in a run-down resort will get to local people.
I have always been a strong supporter of the concept of hypothecation. I have been concerned that the Treasury's allowing a complete free-for-all in order to try to maximise the tax-take for the Chancellor of the Exchequer might prevent the regenerative effect and might prevent the run-down resorts that desperately need regeneration from getting casinos at all. If places as near to Blackpool as Liverpool, Manchester, or even Preston were to be allowed, under the Government's original plans, to have destination casinos, it might be difficult for potential casino operators to foresee a way of making money in a place such as Blackpool.
I am pleased that this last-minute change of heart by the Government may, although sadly there is no guarantee, return us to the original concept of resort casinos. When we hear the Minister this afternoon, and when we consider the Government's amendments in due course, I will be looking for some guarantee that the resorts will be given particularly favourable treatment and for some indication that that is where casinos will be particularly welcomed. I am also looking for the required mechanism to ensure that part of the profits that are raised by casino operators is hypothecated to benefit local people.
I want to refer briefly to what Blackpool council has sent me, and no doubt other members of the Committee. I also want to refer to some of the briefings that we have received from people representing British businesses. My other concern has been the danger, under the Government's original plans, that British people and companies might lose out in a free-for-all. I am hoping that the Government's last-minute change of mind will enable us to ensure that the maximum opportunities are provided for established British companies in the leisure and entertainment area. I see the hon. Member for Blackpool, North and Fleetwood nodding in response to my comment.
The hon. Gentleman will recall that this morning I emphasised the fact that Blackpool's master plan has been developed with local businesses in the town, so that they feel part of it and sign up to it. Two bids have been made for casinos in Blackpool. One is from Leisure Parcs, which is a local concern, and the other is from the Hilton Group, which has an hotel in Blackpool.
Of course, I welcome that intervention and agree with the hon. Lady. She knows that I have worked with the people who run Leisure Parcs for many years, since the early 1990s when the plan was first brought forward. At that stage, it was the early days of people thinking about reforming the gaming laws, but I could see that it might benefit regeneration. I have always supported that concept.
I turn to the briefing material that I have been given and with which I entirely agree. If there is only a handful of leisure destination locations, particularly in the run-down resort, casino investment will bring regeneration benefits rather than just development benefits. Although I am broadly on the side of the argument in this Committee that favours some liberalisation of our gaming laws, I do not go as far as the hon. Member for West Ham (Mr. Banks) did in his speech, but I understand some of his arguments and, as usual, he entertained the Committee. There should be a cautious approach, so that future decisions are based on the result of research and experience. Tourist resorts are desperately in need of regeneration. It is difficult to envisage any other way in which they will be regenerated, whereas there are other ways of regenerating inner-town and inner-city places inland. Blackpool council and others have argued for destination gambling that is a break from the routine of urban life.
There has been substantial local support and, crucially, all-party local political support in Blackpool for as long as I and, I am sure, the hon. Member for Blackpool, North and Fleetwood can remember, but that is not the case in many other parts of the country. That support has been part and parcel of Blackpool's ability to come forward with its plans. If there is casino-led regeneration in our run-down resorts, there will be an opportunity to re-establish what Blackpool used to have: an all-year-round tourism economy. Blackpool and other run-down resorts will have the opportunity to kick start an economic transformation that could have a huge impact on such resorts.
The figures that I have been given by Blackpool council show that casino-led regeneration will provide a net addition of 26,700 jobs: 9,000 in Blackpool's travel-to-work area, 10,000 in Lancashire and 7,700 in the rest of the north-west. It could bring in £2.2 billion of capital investment. There is no way that that sort of capital investment will come to our run-down resorts from any other route. If 7 million additional visitors a year are attracted, not just by gambling but by other entertainment that the new plans will bring in, there will be an opportunity to bring the glory days back to British resorts. I hope that the Government will use the fact that they have now decided to introduce a limit on numbers as a way of ensuring that resorts such as Blackpool have those opportunities.
What the British Casino Association and the Casino Operators Association have said about the Bill is relevant in the light of the Government's U-turn. One recommendation from the British Casino Association was already conceded on Second Reading when the Secretary of State made the first major concession in response to the pressure that the Government were
under. That was the welcome introduction of the separate planning use class. Now that the Government are rewriting the legislation in such a major way, they have an opportunity to consider other recommendations from the British Casino Association, in particular those relating to membership being required at all casinos. The association points out that for many years it has operated within a club membership regime. Having been the shadow Minister dealing with a lot of the proceeds of crime legislation, I am concerned that we do not allow changes in the legislation on gaming to open loopholes through which organised crime and money laundering can take place.
Under a membership regime, the identity of people playing in casinos can be verified and there is some deterrent to an impulse gambler becoming a person with a problem gambling addiction. Individuals must make a decision before entering a gambling facility or casino, either at the seaside or inland. The retention of a membership requirement, which would be an effective replacement for the old and outmoded so-called 24-hour rule, would allow free access to the restaurants, bars and other leisure amenities, and is, in the association's view, a tried and tested method of ensuring that casinos are safe and secure. It would undoubtedly reduce the dangers of an increase in gambling addiction.
The British Casino Association has had a good record in dealing with its social responsibility obligations since the Gaming Act 1968 changed the law, largely in response to previous problems with crime. Therefore, its proposals to modernise gambling laws rather than allow a complete deregulation and free-for-all should be taken seriously. The same is true of the Casino Operators Association of the UK. It is concerned to draw attention to the Government's own regulatory impact assessment of the Bill in September, which said:
''There is a risk that increasing the opportunities to establish casinos could increase the risk of illegal gambling, criminal infiltration and money laundering into casinos.''
In that regard, I want to draw attention to a matter that the Minister probably will not be able to respond to today, but that I hope he and his officials will discuss with their counterparts in the Home Office. On a visit I made to a casino with a cross-party group, which was arranged by the British Casino Association, we were introduced to the senior management people responsible for security. They operated properly within the law and met their obligations under the new money laundering regulations to report all transactions and keep records. The problem, which I hope that the Minister will take seriously, was that they never got feedback from the police or the authorities to which they provided information. They found it frustrating that the new laws against money laundering, the object of which they entirely agreed with, were forcing on them onerous obligations to report, with which they were happy to comply, yet they never got feedback about whether any of that information was used.
It would be an enormous encouragement to those who diligently carry out the onerous restrictions that this Parliament places on them to deter money laundering, if every six months or year they received a report saying, ''Yes, we were able to use some of that information, it was helpful to us.'' They do not need details of exactly which prosecutions it may have helped. Sometimes it behoves all of us in Parliament to think of the effects on legitimate businesses of carrying out those onerous obligations. It would be helpful if the prosecution authorities and those dealing with money laundering were able from time to time to report back and say to the casinos, even under the current law, ''Yes, we find all this information helpful. Yes, from time to time, it has been useful to us and has enabled us to catch criminals.'' I hope that the Minister and his officials will take that seriously.
We have had some reference already in this Committee to the rather peculiar position in relation to European law in which the Government find themselves after their U-turn. I am looking at cuttings from the Financial Times from the end of last month, headlined ''Cap on casino numbers could fall foul of European competition law''. It quotes briefings from No. 10 Downing street, saying:
''Downing Street yesterday played down speculation that the Government was planning to introduce a statutory cap on the number of big city-centre casinos that could be opened when new gambling laws were passed—and with good reason. Not only could a cap fall foul of European Union competition laws, Whitehall officials said it would in itself be a distortion and arbitrary.''
I suspect, without casting aspersions on any individual, that all the briefing that took place overnight, which caused all the information to be on our radio and television programmes this morning, was actually based on briefings from people in No. 10 Downing street, who have now changed their minds. They may have changed their minds about the number of leisure destination casinos, but they certainly have not dealt with the detail of how the Government are going to get this through, in the light of EU competition law.
I am one of those who believe that EU laws have far too great an impact on this country already, but if, by their sudden U-turn, the Government have got themselves into a totally new mess over EU competition law, that is yet a further example of how this Bill was rushed, and of how right we on these Benches were to say that there should have been a clear week between Second Reading and the start of Committee. If that had happened, we would probably have been able to deal with clause 7 in its proper place in the Bill, the Government would have had time to reflect and make the changes, and we would have had a complete replacement new clause containing the new numbers limitation. The Government have only themselves to blame for their problems. I hope that we shall have the opportunity in Committee to consider in detail their new proposals to deal with issues such as EU competition law.
While the Government are rewriting the whole aspect of casinos, the poor licensed trade is being placed under terrible pressure, as it is being told that it
will have to ban smoking from any pub that serves food. That is the main headline today, and I am sure that the Government announced their U-turn today, partly in the hope that it would get buried by all the reporting of the new anti-smoking laws that they are planning to introduce. I completely oppose those laws; the Government are obviously determined to have a nanny state, which I fundamentally oppose. However, having said that, the licensed trade is also concerned about the Bill. One particular chain of licensees pointed out to me:
''On reading the Bill we are unable, in its current form, to find anything positive for the pub sector and have major concerns about the consequences if it becomes law . . . We believe this Bill will give an unfair advantage to the casino sector over and above the rest of the leisure industry.''
The chain is very worried that the majority of independent lessees in pubs within its licensed estate will be significantly damaged.
I do not know whether my hon. Friend was able to listen to the exchanges with the Secretary of State for Health after his statement on the White Paper on public health. I understand that he confirmed that casinos would not be subject to the ban on smoking, although some pubs will be and some will not.
My hon. Friend makes the point absolutely. That is yet another example of what the licensed trade will be complaining about. It is going to be discriminated against, unless there are changes when the Government rewrite this part of the Bill. My personal solution to the problem to which she refers is to scrap the ridiculous proposal to tell people where they can or cannot smoke. I hope that the Government will think better of it, or better still, that we can soon defeat this appalling nanny-state Government and throw out all their plans. However, that is a debate for another day and another occasion.
Undoubtedly, any reconsideration of the Government's plans for casinos should take into account the serious concerns expressed by the licensed trade. I hope that the Government will take the opportunity to address the points made, particularly those concerning regeneration, hypothecation and the licensed trade. We now have a new opportunity; the Government say they are listening and I hope they will take all those points on board. I am still very suspicious that the dead hand of the Treasury will still try to maximise the tax take and the poor old pubs will lose out yet again.
We look forward to the Minister's lengthy response to the many relevant questions that have been raised.
I come to the legislation not liking American-style casinos or the idea of them coming to the United Kingdom. However, I am just enough of a libertarian—to please the hon. Member for West Ham—to recognise that just because I do not like something does not mean that I ban it. That could lead us on to the subject of smoking, foxhunting and all sorts of things that we could be called to order over. Although I think such gambling deeply unattractive, I accept that it is appropriate that we have one of those establishments somewhere in the UK. To that end, I would be more than happy to please the hon. Member for Blackpool, North and Fleetwood by saying she should have it.
We should have a pilot scheme in Blackpool that we can thoroughly assess. Blackpool would hugely benefit from that because, as has been mentioned by the hon. Member for West Ham, such casinos are a licence to print money because people enjoy gambling. Some people will lose their shirts, and others will just not go to the pub, but spend money in the casino instead. There will all sorts of displacement effects, and perhaps even an increase in the spend on entertainment in general, but nevertheless a proportion of the income of the new casinos will come from people who, having lost their shirts, want to chase their losses by gambling all that they own. That is an unattractive side to such casinos, but I accept that people should be allowed—in some respects—to do what they want.
The best way forward for the Government would have been to allow one pilot scheme to take place somewhere in the country. In fairness to Blackpool, it has been making the running. There is clearly a job to be done to reinvigorate the resort, give it extra revenue and make it an area that responds to the expectations of the 21st century in the services and facilities that it provides. American-style gambling is one way of doing that.
I do not know why people keep repeating the idea that we are going to import Las Vegas lock, stock and barrel to this country as if we are incapable of producing our own model. However, if there were to be just one such casino, and it were to be in Blackpool, who on earth is going to put enormous investment into it on a pilot basis, when, at the end of the pilot period, it might be closed down?
The hon. Gentleman makes a relevant point. However, I do not necessarily envisage it closing down, but as a pilot to examine whether we would want to expand the process into other areas. I accept his argument that we should make such gaming available somewhere in the UK. I do not like it, and I do not want to do it myself, but it should be available for those who do in order that they do not have to fly to Las Vegas or elsewhere. Although I talk about a pilot scheme, I do so insofar as we are deciding whether to extend it elsewhere. Blackpool would have a resort destination casino and keep it in perpetuity.
My hon. Friend the Member for West Ham makes an interesting point when he talks about one casino because Blackpool's master plan talks about two. There is the question of what sort of mass we need in order to have genuine regeneration. We have got tied up discussing the number of casinos instead of the number of locations. The locations we want to regenerate may need more than one casino. I would welcome the hon. Lady's comments on that point.
I entirely agree with the hon. Lady that the argument has been hijacked by a discussion about the number of casinos. She is right: the plan that I envisage would make Blackpool a resort complex for casino gambling, which might mean two casinos, but they would be confined to one place, and therefore the ambient gambling that the hon. Lady mentioned would also be kept to one place. I accept that it might become a moral hazard for her constituents, but they would have decided what they want. My hon. Friend the Member for Surrey Heath (Mr. Hawkins) rightly said that if there is an all-party view on the matter, and what is proposed is popular, it is for local people to decide. That is the right and proper way to proceed; we could see the effect of the new regime and Blackpool would gain immensely from it. In that respect, the most good could be achieved by the measure.
I am sorry that I disagree so strongly with the hon. Member for West Ham. On a private matter I wonder whether he would like a casino in Symi; we sometimes find ourselves on that delicious Greek island at the same time. It would be a shame if there were one of these establishments in that environment.
The hon. Gentleman does not give due credence to the very different kind of gaming being tested in the proposed schemes. There are ample opportunities for gambling in the UK; some lucky people win millions of pounds on the lottery—
I never have.
The same goes for me. Similarly, there are betting shops and bingo halls; there is a multitude of different forms of gambling, most of which are pretty benign and do not cause a problem. It is not true that there is a restrictive regime in the United Kingdom; there is massive scope for gambling. The new technologies, which the Bill rightly seeks to improve in terms of financial robustness and certainty, will increase those opportunities. People can now gamble on the net, which may be more enjoyable for them than traditional forms.
What is objectionable about the American-style casino gaming is the multitude of machines—up to 1,250 in one large room—all of which have been psychologically designed to entice people to carry on pulling the lever and playing. The designers of the machines are very clever; they are designed to pay out up to a certain amount. People on other machines hear the chink, chink, chink of money being paid out; they look at their own machine and see that they have three
lemons on the screen and need only one more to win. Just one more go and the multi-million pound jackpot might be theirs—
Quite. As the hon. Gentleman said, most people get a raspberry, not the four lemons that mean the million-pound jackpot.
Australia has created a problem for itself. The biggest proponents for changing the law, apart from the casino industry, were the pawn shops, because people will pawn anything to get their hands on some money to chase their losses, to make it up to their wives because they have lost all their savings or because they believe that the jackpot is within their grasp. [Interruption.]
Order. There is too much background noise. Let us listen to the hon. Lady.
Thank you, Mr. Pike. As hon. Members have said, many questions have to be answered. Where will these casinos be sited? Will they be allowed in the cities? Will they be allowed in London? Will we get the regeneration benefits that they may offer by ensuring that they are sited in areas where tourism could be given the greatest boost?
My hon. Friend the Member for Surrey Heath was making a pitch for having regional casinos in our seaside areas, which are struggling at the moment to produce a tourism product on which people want to spend a lot of money. If we are to have so many casinos we should consider making them destination casinos in seaside towns, giving those areas a welcome tarting-up on the proceeds. That seems much better than having them in our inner cities.
As my hon. Friend pointed out, other opportunities for investment exist in the inner cities, not least in the retail sector. Sheffield and other cities throughout the United Kingdom have had lots of money spent on them because as major population centres they have a captive demand for other activities, and do not have to include casino gambling. I hope that the Minister will listen to that argument, which has been pressed on him quite strongly by several members of the Committee.
I want to end on a note that I have heard throughout the day since the Government came up with this magical figure of eight casinos. We all wonder why eight. Why not seven, six, five, four, three, two or one? Why not nine, 10, 11 or 12? Obviously it was given careful consideration. I am sure that the Minister and members of the Committee would be interested to hear the view that it was the Office of the Deputy Prime Minister that was keen on the idea that there should be eight regional casinos. Furthermore, the Deputy Prime Minister wanted eight casinos because he is strongly in favour of the millennium dome being one of the sites that gets the go-ahead. I would be grateful if the Minister could comment on whether that is the case. Clearly if London is to get only one casino, there are areas, such as West Ham or Wembley, that have a stronger claim than the dome on the regeneration
benefits of a casino. It might not be possible to have two casinos in London if the number of casinos permitted by the Bill were any lower.
If the ODPM has strongly pressed for eight casinos for the reasons that I have just outlined, the taxpayer would have quite an interest in that. Kerzner International has contracted with the present owners of the dome for a £210 million casino to be installed on the site, subject to it being allowed under the Bill. If the site is economically successful, English Partnerships will get back some £33 million that it has spent on maintaining the dome since it fell out of active use. There is an ongoing contract for the dome, not just to release funds to English Partnerships, but to the lottery.
The hon. Lady will be aware that on Second Reading the Government made it quite clear that one of the triple locks on the introduction of one of these casinos was consultation with local people. Neither my constituents nor anyone else in the borough of Greenwich has been consulted about a casino at the dome. I should apprise her of that fact before she goes too far along that road.
I am grateful. I listened to the hon. Gentleman making precisely the same point earlier. If I were him, I would be unhappy about the proposals as well. Nevertheless, I am merely reflecting on why a number of people believe that the figure of eight was put in the Bill by the Government because that was what the Deputy Prime Minister wanted. He seemed to have a particular interest in a development at the dome, and therefore needed a sufficiently high figure to give the dome the go-ahead, subject to the consent of the hon. Gentleman's constituents.
In that regard, I remind the Committee of the benefit that might flow to the taxpayer—or at least to English Partnerships—if such a contract were given the go-ahead. When the Minister sums up, perhaps he will comment on whether the figure of eight that has been set today has any bearing on the likely development of the dome as a casino resort.
My hon. Friend has raised a fascinating possibility that, having lost the first gamble on the dome, the Deputy Prime Minister is now about to embark on a second bet. Anyone who throws good money after bad knows what happens in the gambling industry. That will be a fascinating ongoing problem.
I find myself something of a chameleon on the matter, because the right side of my political principles says, ''Let's have as many of these big casinos as possible, and let's have them paying as much gambling tax, as much local business rates and as much section 106 regeneration money as possible.'' However, the left side of me, my softer side, says, ''Of course people have got to be protected, particularly children and the vulnerable.'' It is that tension that the Committee must deal with. If there is any conflict between the two, of course the protection of children and the vulnerable must be paramount.
It is no wonder that so much controversy has been caused by clause 7, because it is pretty wide. It starts with a definition of a casino and one of casino games of chance. It goes on to say:
''For the purposes of this section it is immaterial—
(a) whether an arrangement is provided on one set of premises or on more than one''.
We can envisage a huge complex, as was outlined this morning by my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale). It goes on to say that it is immaterial
''(b) whether an arrangement is provided wholly or partly by means of remote communication'',
so there could be one or more premises with a remote form of gambling, such as the internet, all over the country. Subsection (5) defines a regional casino, a large casino and a small casino, and subsection (6) gives a lot of detail on the number and density of gaming tables and everything else that one can think of about gaming tables. Subsection (7) contains further definitions.
As the clause is so wide, we are right to question the Minister very stringently about what amendments he is going to table. All we have heard this morning and this afternoon is that there will be some sort of limit, but that prompts a host of questions. The Minister will have to give us a pretty comprehensive reply, not only for the benefit of this Committee. Further confusion and muddle will reign between now and Report, which will be some weeks, if not months, hence, and that will cause further chaos and uncertainty. I hope that the Minister will be able to clarify the situation this afternoon.
In particular, I am worried that by imposing a limit we will be getting the worst of all worlds. We shall not quite have controlled the huge casinos, but we will not have liberated the situation either. I want to know what will happen when licences have been granted for the eight casinos, and we find that there is some aspect of those licences that we do not like—that vulnerable people are not being protected, or a particular area is being affected in one way or another. I have read the Bill, but I ask how that matter is to be dealt with, without being unfair to the applicants who will, by then, have invested possibly many hundreds of millions of pounds. What will happen if they find suddenly at the end of the licence trial period—we do not know how long that will be; it might be three or five years—that a whole raft of the licence conditions has been altered? What would happen if the Secretary of State wanted to revoke the licence altogether? Would compensation have to be paid?
How will the Secretary of State allocate the eight areas? There has been a lot of controversy. We could be talking about the dome or Blackpool—it is going to be difficult to decide where the casinos should go. The Secretary of State will have to give some indication of where they will go. Will she try to ensure that each region gets one? Will the capital have more than one? There are a huge number of unanswered questions.
The Bill does not deal adequately with what clause 23 refers to as
''protecting children and other vulnerable persons from being harmed''.
A code will be issued, but nowhere will it be mandatory. Although it is in the commission's remit that a code has to be issued, there does not have to be a report to the Secretary of State on how it is operating. We have the beginnings of the worst of all worlds because the super-casinos will not be distributed evenly throughout the country, the vulnerable will not be protected, and we will not see how the casinos work.
The Minister has a lot of questions to answer this afternoon. I hope that he will be able to answer them, because, as my hon. Friends have said, this business has been going on for many years. It has been examined in huge detail. The Joint Committee came up with some sensible recommendations. I cannot imagine why on earth the Minister and his colleagues have not accepted those recommendations in full. Three quarters of the controversy would have been avoided if those safeguards had been followed. Perhaps the Minister could tell us in some detail why they were not. I look forward to his explanation with great anticipation and interest, but I am not totally convinced that he will answer all the questions.
We have had a good and focused debate on what has turned out to be a phantom clause. Before I make a few points, I want to ask the Minister in his response to clarify to the Committee just how he proposes to proceed beyond clause 7. I thought that the suggestion from the hon. Member for West Ham had great merit: to negative the clause and then table a new clause 7 at some future date. Conservative Members would want that new clause to be moved in Committee and not left until Report. Obviously, we would co-operate in finding time for that. This is such a critical clause that we really ought to be given plenty of time in Committee to debate it. Regardless of whether the solution offered by the hon. Gentleman is the accepted way forward, it would be helpful for the Committee to know precisely how the Minister intends to proceed.
There is no question but that this is an unprecedented volte-face by a Government who are introducing a major piece of legislation. I do not have the hon. Gentleman's 23 years of experience, but I have plenty of my own and I have never come across anything like it at this point in a debate in a Committee on a major piece of legislation. The irony is that the Bill has already been the subject of detailed scrutiny by the Joint Committee, and before that we had the Budd report. This issue has been around for an incredibly long time and has been looked at and scrutinised by all sorts of people. That process has involved all the industries in question in a helpful and constructive way—hitherto. Then, of course, the thing started to unravel.
There was consensus all the way down the line until the Government's response to the second report. Things began to unravel possibly because the Minister
did not have his eye on the ball and had other things on his plate, such as the Olympic bid. That Government response threw into the waste basket the scrutiny Committee's key recommendations, certainly on the casino aspect of the legislation.
We agree with most of the Bill, with a tinkering here and there. There is acceptance that 80 to 90 per cent. of it is necessary and would create a modern piece of legislation needed to tackle issues facing us, especially betting exchanges and internet gambling. The Government have a choice. They could drop casinos from the Bill now and get on with the rest of it, in which case they stand a reasonable chance of getting the legislation through the House of Lords in time for what we all believe to be a general election in May. If not, they face the real risk of losing the Bill because of the issue about casinos, which should have been addressed earlier.
The Government should have seen the warning signs and listened more carefully to the Select Committee on Culture, Media and Sport, because it presented the Government with key indicators that needed to be addressed. I do not know why the Government did not address them. Perhaps the process was hijacked by a couple of special advisers in No. 10 and the DCMS. I will not name them, but we know what happens when special advisers to this Government get their teeth into things. They may have cobbled together the provisions on casinos during a flight to Las Vegas or wherever, but those provisions have totally unravelled.
The Government may have thought—as I would have in their shoes—that a huge pot of regeneration money and planning gain would be available for Labour heartland inner-city areas. What did the Labour party do? It sent out a circular saying, ''Vote for this boys and girls, because this is regeneration money for our heartlands—the city centres.'' That was without doubt an ingredient in their thinking.
The Select Committee gave clear steers for the way forward. First, it advised a cautious approach. Secondly, it advised clarity in the definition of regional casinos. It has already been said in this debate that these casinos were originally referred to as resort casinos. Most people would have understood what that meant. Regional casinos are a completely different ball game, and we need a strict definition.
As the Select Committee pointed out, companies were getting into discussions with local authorities and looking for sites and land. They were talking to West Ham football club and every other rugby league and football club in the land, and trying to find sites that they could move on quickly. The Committee said clearly, both in its report and, I suspect, directly to the Minister, that if the Government did not get a move on to sort out the situation, the regeneration benefits would be lost. In other words, under the regional casino definition, all sorts of areas that did not really benefit or measure up to regeneration would get casinos.
The Committee's report also asked for national planning guidance. It took evidence, listened to people who knew about such things and put the findings in its
report. We now understand from the Minister's comments this morning that there will be a national framework. He needs to put flesh on those bones and tell us what he means by that. Does he mean a framework of planning guidance or a framework for central Government to decide where the eight regional casinos will go?
The Committee attempted to limit the number of so-called regional casinos by saying, ''Do not call them regional, that's confusing. Let's focus on what we really believe them to be about.'' It proposed the name ''leisure destination casinos'', which was mentioned earlier by my hon. Friend the Member for Surrey Heath. The Committee saw that such casinos should be defined in such a way as to limit the number throughout the country.
The Committee also sought to limit the number of large casinos by recommending floor areas of up to 7,500 sq m. I am not sure whether the Government have accepted that, but it was certainly an attempt to set an investment threshold, so that only the very big players would be prepared to invest the sort of money talked about in this debate—£100 million, £150 million and £200 million have been mentioned on many occasions in deliberations with my hon. Friend the Member for Maldon and East Chelmsford. No one will make that sort of investment unless their business plan makes sense. It requires not only the right location and the tapping of huge populations but the ability to stock casinos with up to 1,250 category A machines.
The Committee also strongly recommended an even-handed approach to the new investment in the so-called regional casinos and the investment that has already gone into the 131 to 134 existing casinos—we do not really know their number. However, the Government have denied the existing casinos access to category A machines. The Committee clearly said that if the Government wanted to create a level playing field and give British industry at least a reasonable chance to compete, existing casinos would also need access to category A machines.
Does the hon. Gentleman share my considerable surprise at the Minister's rather brief statement this morning, in which no reference was made to category A machines? Does he hope, like me, that when the Minister replies we will have a clear statement about the intentions of Government amendments on category A machine provisions?
The hon. Gentleman makes a telling point which, before he intercepted me, as has been his want, I was about to make. It is vital to take a holistic view of casinos. This issue is not just about placing—I was going to say dumping, but that is rather inappropriate—on this country a large number of mega-casinos that we have not had before; we have not even had category A machines before. This Committee recognises that these provisions represent a quantum leap, but casinos must be considered as a whole, taking
into account who has access to category A machines, how access is controlled and whether membership and identity should be an ingredient of that control.
We share the view of the hon. Member for Bath and others that there should be some form of identity in the system. Incoming investors do not like the word ''membership'', but we were told by a potential investor who runs casinos in other parts of the world that category A machines are operated not by cash but by card, and that before the casino supplies a card one must sign in, providing one's name, address, presumably one's bank details and so on. As the card is used in each machine, the casino can tell who the problem gamblers are and who is winning and losing.
Given that that model already exists in big casinos in some parts of the world, I do not understand all the fuss about membership. If that is how casinos run their business, we could quite easily adopt that model. British industry has said that from day one, and it wants to continue with some form of membership and identification. We know the arguments about money laundering, but this issue goes further than that. We want to ensure that the right people enter our casinos and that if there are problems with problem gamblers, those problems are identified at an early stage and dealt with.
Sitting suspended for a Division in the House.
There is still quite a lot of misunderstanding about category A machines. Perhaps the Minister can clarify the situation. On Second Reading, my hon. Friend the Member for Maldon and East Chelmsford said that 40 regional casinos were being postulated, and with 1,250 machines per casino there would be 50,000 new category A machines in the system. The Secretary of State intervened, saying that that was not so and:
''It is absolutely essential that this debate is conducted on the basis of fact, not fantasy, myth and mistaken beliefs.''
The key sentence in her reply is:
''The expectation is that about 10 per cent. of machines in regional casinos will be category A machines that do not have a specified stake or prize.''—[Official Report, 1 November 2004; Vol. 426, c. 45.]
The Secretary of State was contemplating that only 10 per cent. of all the machines would have unlimited payouts. The rest would, presumably, pay out fixed prizes and there would be small-stake betting at the other end of the scale. If that were so, there would be far fewer category A machines, even if the eight proposed regional casinos included the maximum number of 1,250. If we are talking about only 10 per cent. of machines—supposedly the dangerous ones—giving unlimited payouts, I cannot get my head around why the Government think that it is such a sin for the existing casinos to have a few of those machines if they
are capable of being programmed to pay out different prizes. In any event, if that is not the Government's thinking, there is a case for the limits on category B machines to be lifted higher, so that the large and small casinos that will have machines can provide some basic competition.
As we might as well ask anybody on the Committee what is going on, perhaps the hon. Gentleman could help by telling me what the thinking is behind category A machines being located only in the regional casinos. Why should not such machines be placed in Crockfords, or smaller casinos? I do not understand. Perhaps he would like to venture an idea.
I am glad that the hon. Gentleman posed that question, because we have asked the same thing and received no answers hitherto—and neither has the scrutiny Committee. The Government have decided that only the new regional casinos will have the category A machines. They try to sell the idea on the basis of protecting vulnerable people and children. That is the official line. First, however, as children will not be allowed into the big casinos, they will probably never see a category A machine. Secondly, how can the Government argue that they are protecting the vulnerable, if, before today's decision was taken, there might have been 20 to 40 regional casinos, with some 50,000 category A machines available in large city centres? It is nonsense to say that that sits well with the argument that the measure is about protection. That is partly why the Government's case has imploded—the various principles involved do not marry up.
We would say, ''Yes, limit the number of machines and the access to them.'' It is total nonsense to say to people in Crockfords, who are playing for high stakes at blackjack and roulette, ''Here is a machine into which you can put a maximum stake of £1.'' I do not understand where the Government are coming from.
There is an important matter in relation to the decision to have eight regional casinos. If we are not careful, investment may go into the large casinos and, to use the buzzword, there may be a proliferation at that level. At the moment, such casinos have a maximum of 150 machines and only need to have one gaming table. They are at a much lower level. The West Ham football clubs of this world, the rugby league clubs and the rest may develop smaller casinos with a few gaming tables and a few machines. There is nothing wrong with that, but they will not be regional casinos—the mega-casinos. If there were an uplift on category B machines, it would probably assist such casinos in making a business case.
In the holistic approach, however, the Government need to be careful, in restricting the number of regional casinos—we do not know how they are going to do that yet—not to let investment proliferate at a lower level. If that happens, there will be high street casinos in most of our towns and city centres.
The key question is about regeneration. There must be transparency in selecting the eight casinos. Everything must be transparent, and the process and the outcome must be beyond reproach. We must be careful about planning gain. A company offering more
cash and facilities to a city or local authority than another should not necessarily be the measure to use in choosing one bid above the others. As the hon. Member for Blackpool, North and Fleetwood said, regeneration is about more than planning gain or section 106 agreements. It is about lifting the total economic environment around a development. It is about jobs, the built environment, creating new civic centres and so on, rather than just achieving planning gain for a road here or a swimming pool there.
The Government would do well to use a transparent measure of regeneration to encourage local authorities to become involved. I take the point that the hon. Member for West Ham made. In any event, no one will invest £100 million or £200 million unless they have the local authority onside before they make a bid. There will be discourse between the local authorities and the big companies that are interested. That will be established at the local level, as there would be opposition if something got the go-ahead otherwise. Part of the process will be bottom-up.
The idea that my hon. Friend the Member for Bromsgrove proposed is ideal. There should be bidding. People should make their bids for regeneration areas and the eight top bids should get the nod. The process would be transparent, so those whose bids were not accepted could not argue that they were overlooked or that their bids fell foul of whatever criteria were used.
The Government have decided that they can justify eight, although several Members, including my hon. Friend the Member for Surrey Heath, have mentioned European legislation, and there are already challenges to the Government's thinking. No doubt the Government have got that avenue blocked, otherwise the clause would never see the light of day. If eight has been chosen, we should be reasonably confident that that figure will not be challenged, particularly if there are transparent regeneration definitions for the bidding process.
It was interesting to listen to my hon. Friend the Member for Bromsgrove. I have also heard the story of why the figure is eight. The Deputy Prime Minister wants one at the dome and, if there is to be regeneration, eight will mean that the dome will come in at number six or seven, which gives a safety margin. That is why the Government have come up with the magic figure of eight.
We were challenged to say why we chose four. If there is to be a pilot scheme, there should be a reasonable and small number. One could argue that eight goes beyond a pilot scheme. It will be necessary to give contracts and licenses to businesses that are spending huge amounts of money. Those licenses must be given for a long period, such as 20 or 30 years. A business must have a business plan for such a long period, in order to get its pay-back period right. Businesses will not do that unless everything stacks up.
Order. I ask the hon. Gentleman not to go too far down that line. I have to think about the progress that we are making on the Bill. We have had a good debate on the clause. I recognise its importance, and the importance of what has happened today, but let us keep to the issues before us.
It shows the hon. Gentleman's age when he talks about Herbie; I must have been about 10 when that film came out. He was probably about 30, but I will not go down that road.
I have nearly come to the end of my remarks. The Government must demonstrate the principles behind their decision on the number eight. We cannot leave this Committee today still in the dark as to why that number was chosen. There must be some guiding principles that make sense, and that can be measured and are transparent. Otherwise, stories saying that the decision is a stitch-up of some kind will continue to proliferate. Perhaps there are eight big players in this equation with the cash ready, and the Government are thinking, ''Fine, we've got some people onside.'' Who knows? Perhaps the Minister will enlighten the Committee as to the real reason behind the number.
If eight super-casinos go ahead, the scheme will be a bit bigger than the pilot that we envisaged. It may mean that those eight become a monopoly in year five and beyond. If no more companies come in, we will have given eight companies a monopoly on regional casinos. The subject has to be thought through. Our number of four was small enough to be a pilot scheme and big enough to attract the investment to make it worth while. The reason for the choice of eight is critical to the Government's credibility and to the rest of the Bill.
My hon. Friend raises an important point about transition. He mentioned that we would not see the full effects of the licence for 30 years, but I assume that the Minister will tell us this afternoon that the Government will evaluate the effect of the licences in one, two or three years. What does my hon. Friend envisage in terms of transition?
The period that we had in mind for reporting back was three years. The Bill does not come into effect until 2007, so we are looking at 2010 before any report can be made to Parliament on the pilot schemes. It will take some time to look at that report, so we are looking at decisions from 2011 or 2012 onwards. The eight chosen in the pilot schemes will have to be given long-term licences and planning permissions, otherwise the companies will not come forward with investment and the idea of a pilot scheme will not even get off the ground. It is important to get the balance right.
There may still be a conflict of interest between the Office of the Deputy Prime Minister and the Department for Culture, Media and Sport. We welcome the Government's change of heart on the D2 classification, because that will prevent proliferation, as bingo halls and other leisure centres switch to being casinos. If we can block that avenue off in terms of planning, that will help.
On the time scale, it does not seem to me to be a problem if the investors who want to go down the route of regional casinos have to wait until 2010 or 2012 for the big decision to be made. After all, if the scheme will not work, it is better for them to be aware of that a few years before than to make a rash investment on day one. The investors to whom we have talked are all saying that they need a minimum of 1,250 category A machines in their establishments to make them work. I do not know enough about the matter to know whether that is right. Certainly, the profit margin on 1,250 machines is a heck of a lot more than for only several hundred. The Government have not indicated whether they will alter that, so a holistic approach—considering all those elements within the whole casino framework—is vital if we are to get a sensible and acceptable way forward.
It seems a long time since I made my speech this morning, but this has genuinely been a good debate, aside from some of the adjectives that have been used. The substance of the debate has been good and informative, and it has, broadly speaking, demonstrated the Committee's real concerns. To a large extent, it reflects what the Second Reading debate told the Government, which was that we had to revisit the issue of protection, in particular.
I remind the Committee that the licensing objectives of the Bill are
''to prevent gambling from being a source of crime and disorder'',
from being associated with crime and disorder and from being used to support crime;
''to ensure that gambling is conducted in a fair and open way'';
and, most important of the three—although they all carry equal weight—
''to protect children and other vulnerable persons from being harmed or exploited by gambling.''
The hon. Member for Cotswold (Mr. Clifton-Brown) said, as did several other hon. Members, that he has two sides, but he is on his left side, which is the side he fell on, and he wants to ensure that vulnerable people and children are protected. That is why the Government took the decision that they did. Although we believed that the triple lock on the regional casinos would have sufficed, and we expected an incremental growth, not an explosion, in the number of casinos, neither the House nor the general public believed that to be the case, so we reconsidered the matter and asked how we could reassure people about their very genuine concern.
The protection of the vulnerable through public policy is at the centre of the decision to impose a cap on the number of casinos. That does not cut across competition policy, so the advice that we are given is that it will not cause the European Union concern. A by-product of the decision to limit the number of casinos to eight is the move to regeneration.
It would be relatively easy and clear to measure whether vulnerable people and children were being affected, but it would be less easy and clear to measure a general deterioration in the
social fabric of an area in which one of these large casinos was sited. Will the Minister say something about that?
I am trying to follow the logic of why the proposal for eight casinos protects the vulnerable.
If my hon. Friend will let me finish.
The Minister was about to make a point about regeneration. I want him to expand that point, because if the logic is that we need to limit the number of casinos in order to limit vulnerability, obviously the best way to protect the vulnerable would be to have no casinos at all. I do not see how a limit of eight equals protecting the vulnerable.
If my hon. Friend will give me time to finish, I will expand on that point. I have been on my feet for all of three minutes, and I have a five-hour debate to respond to. I know that he gets excited about this issue, but if he will just bear with me, I will try to explain the rationale for the figure eight, where we are coming from and what we are doing in the Bill to achieve what I am sure he will agree is a very laudable aim: protecting vulnerable people.
A question was asked about the location of the casinos. We believe that it is important to gain widespread experience of protection and regeneration from around the country. Against that background we asked how we could gain that experience. We should be careful about using terms such as ''pilot scheme'', because, as I told the hon. Member for North-East Cambridgeshire (Mr. Moss), many people think of pilot schemes as being for a definite period and being about licensing as well as gaining experience.
We believe that we have to gain that experience if we are to respond to the House, and that experience cannot be gained in one place. The Government are discussing how many regional casinos are necessary to have a reasonable sample so that we can consider how to protect the vulnerable and achieve regeneration.
A point that has not been made today relates to the parameters of operation and intervention. I return to the nature of the gambling commission. At the moment, we have the Gaming Board, which really deals with where casinos are sited. Those parameters are determined largely by detailed regulation. We are taking the whole ethos of the 1968 Act and writing it into a new framework in the Bill, in which Parliament sets the parameters but the detailed operation can be undertaken by the gambling commission, which will be able to intervene where risk is evident or has been proven, in a way that the Gaming Board could never do.
I found the discussions that we had when I returned from Australia very interesting. We are watching carefully the development of the gambling commission, which is probably the most important measure in the Bill because it will enable us to intervene, as no other institution in the world can do, in the gambling industry. That is why it is important to understand the architecture of the Bill.
If any of the eight casinos which could be created were thought to be working in a way that was not desirable, the Secretary of State could intervene in certain circumstances, and the gambling commission would definitely intervene if it believed that the industry was going beyond the Bill's terms of reference. It is important that the Bill allows for intervention without the need to return to Parliament and introduce a statutory instrument. The commission will have the power to intervene; we will expect it to do so and ensure that the industry complies with its terms of reference.
The figure of eight arose from a discussion about how many areas would be needed, about the need to consider how to protect the vulnerable and about how to get the regional development agencies to take account of the number of casinos. I asked during my statement this morning how we can acquire enough experience to obtain a genuine view of what is happening with regional casinos. Against that background, we will ensure that if the eight go beyond what we believe the Bill entitles them to do, the gambling commission will be able to move in, either alone or with the Secretary of State. We have built that into the Bill to satisfy the demands made by the House on Second Reading and those that have emerged in MPs' postbags and communication with my Department. We believe that we have got the balance about right. That is why there will be eight casinos and it is why protection is the aim of public policy, with the framework including a strong gambling commission. Secondary to that aim is regeneration.
That is the background to our arriving at the number. It was nothing to do with the dome and such issues. The discussion was about how to respond to the real concerns expressed in the House on Second Reading and in MPs' postbags. That is a responsible thing to do.
Will the Minister clarify precisely whether we are discussing eight casinos or eight geographic areas?
May I come to that?
The decision involved many Departments and was discussed throughout Whitehall. Our approach was to cap the number of regional casinos, and a series of consequences flow from that. That is why it is timely that this is the last sitting of the Committee until after the Queen's Speech, which gives us two weeks to draft amendments. The Conservative Front-Bench spokesman, the hon. Member for North-East Cambridgeshire, said that he wants to deal with as many issues as possible in Committee, and it is also my desire to ensure that the Bill returns to the House on Report as complete as possible. We will instruct counsel to draw up amendments, and I hope to have them when the Committee sits again in two weeks. There will be a whole series of amendments and our decision will throw up many questions, but we will return to the Committee in two weeks with some of the answers.
I shall try now to answer some of the specific questions. On amending the Bill after clause 7, I can say that there will be opportunities to make amendments on a number of points about which hon. Members have expressed concerns.
On the European Union, we believe that our approach of using public policy to protect the vulnerable is legitimate and does not conflict with European law.
It is all very well for the Minister to assert that, but in my earlier submission I read out comments in the Financial Times which were taken from a briefing by No. 10 Downing street. When the Government were adopting the previous policy of having no cap on the number of regional casinos, Downing street told leading broadsheet journalists that there was an EU prohibition on a cap. It is simply not good enough for the Minister to dismiss that with an assertion. I hope that after our two-week break the Minister will give us much more detail on precisely why counsel advised him and his Department that what was previously thought by the Prime Minister's spokesman to be a bar is no longer the case.
We take counsel's advice if necessary. It depends how the question is put. If the question is about an arbitrary cap, the answer is that there could be a conflict. However, if public policy is at the forefront, and we are operating the cap specifically with a view to proving or disproving any harm to the public in what we are doing, that does not, I am advised, conflict with European law. If the question asked by the Financial Times was about an arbitrary cap of whatever number, as it probably was, then the answer is that there could be a conflict. It is the question one asks that is important. I am being very specific in what I say; I was very specific in what I said this morning in my statement to the Committee and therefore to the House: our prime objective is to use public policy to protect the vulnerable. That is what we are testing; that is what the House asked us to test. It is one of the three main planks of the Bill, and one of its objectives.
Before the Minister moves on to other matters, I want to pick up the excellent question posed by the hon. Member for Colchester (Bob Russell). I was left feeling, first, that the Minister did not know the answer and, secondly, that the definition may be not eight casinos but eight regions, with two or three casinos in each. Blackpool's plans involve two, although I was told three yesterday. I will not argue about that. The matter is important to the Committee and to the general public, who have picked up on the fact that the number is not necessarily eight; it could possibly be more.
It is eight casinos; I want to make that clear. The hon. Member for Colchester asked about location rather than a specific number, and we will come back to the matter of how those locations will be determined. That will also be part of the Government
statement, which will marry the licensing and planning. We will return to the Committee on that matter, too.
I want to deal with some other points that have been raised. First, on the increase in problem gambling forecast by the Henley Centre and NERA, I point out that the authors of those reports accept that their research did not take into account today's conditions, and that could be misleading, as the Bill and the gambling commission will have an effect on problem gamblers. The commission will have powers that go way beyond those of the Gaming Board.
If we were to do what the hon. Member for Surrey Heath wants, putting British companies in a privileged position and trying to stop investment coming from abroad—American takeovers and so on—that would be protectionist, and it would clearly conflict with European law. There is no reason why British companies such as Ladbrokes, which is very active on the Blackpool scene, and Hilton Hotels, should not be involved.
One reason for the backlash, which was picked up by the Daily Mail and others, was the way that some of the companies coming to invest in this country, or considering inward investment, handled their publicity. Three applications are mentioned in my local newspaper in Sheffield, The Star. One of them is at Meadowhall, one is at the Don Valley stadium and one is at Sheffield United football club—which is the centre of the universe and the Mecca of football. I hope that the hon. Member for West Ham, a seasoned Chelsea supporter, appreciates that.
My mum is 88, and I take her to church every Sunday. She is a very strong Methodist. I was the first person to bring an alcoholic drink into the house; I was 21. As I have been involved in licensing and gambling legislation recently, I tend to get earache when I take her to church.
Anybody reading the local and regional press would have thought that we were going to be swamped with casinos in Sheffield, and that we were producing about 10,000 jobs every night—every time somewhere is said to be getting a casino it is claimed that another 10,000 jobs will be created. However, just about every football club and seaside resort has a casino. There was a reaction to the fear that we were to be swamped, which Members starting experiencing in their postbags; I certainly did. People started asking, ''Hang on, is there no control over this?'' To a large extent, that is why we are having this discussion today.
As I said in my statement, we are looking at the possibility of those eight being the first phase, but there are also all the conditions I laid down this morning, in which the House will, after
thoroughly examining protection and regeneration issues, determine whether there should be any more. This could well be the first of a number of phases of development, but that will be controlled by the House against the background of an evaluation of the eight.
I also give an assurance that if any of the eight start going beyond what the Bill intends, the gambling commission will have the powers to arrest that pretty quickly. There will not be the need, as with alcohol now, to keep coming back to Parliament to get powers to take action.
I hope that the entire Committee will want to join me in wishing the Minister's mother a happy birthday. On 1 November she was 87, and today she is 88, so she must have had a recent birthday, and I pass on my best wishes.
The Minister has given some very helpful information to my hon. Friends the Members for Southport (Dr. Pugh) and for Colchester, but he has not answered the question that they were asking. Is it intended that the eight casinos in the pilot phase will be in eight different locations, or is there the potential for more than one of them to be in the same location?
I would expect that when the amendments were before the Committee the eight different scenarios would be tested. [Hon. Members: ''Ah.''] Well, we will clarify that. If one looks at having three casinos in one area, that will not reveal much about how vulnerable people are, except that they would all be vulnerable.
The second area to be addressed is what type of regeneration will be got from a casino. The Government have discussed the following question: ''If we are going to have eight casinos, how do we satisfy the concerns of both the House and the public?''
I have set out to the Committee our belief that this number of pilots, or whatever one wants to call them, will allow us to return to the House in several years and give an informed view on what has happened. I qualify that by adding that if we believe, during that period, that those eight casinos have started going beyond what Parliament and the people want, the gambling commission will be able to use its powers, which the Gaming Board does not have, to address that. We have provided protection, and we have ensured that there will be informed development to provide a basis for sensible decisions, which will provide the House and the public with the assurance and security for which they have asked.
We accepted pretty much all that the scrutiny Committee said. The one matter on which we did not agree concerned increasing the number of category A machines in large casinos or increasing the prizes and stakes on category B machines. We thought that that went against everything that the scrutiny Committee had broadly advocated, which was to bring in more controls rather than fewer. We saw it as proliferation and rejected it, and we stand by that.
Looking at the real world, I reiterate the Secretary of State's point about category A machines in regional casinos, which was that, throughout the world, the use of those high-rolling machines is at about 10 per cent.
In the UK there is no evidence that the full current entitlement to the use of £2,000 prize machines in casinos is being taken up. On the contrary, the vast majority are small-stake, small-payout machines. We believe that that would apply to regional casinos too. The 10 per cent. that my right hon. Friend mentioned would result, I am told, in 976 high-rolling machines, but it is the principle that is important: casinos are not currently saturated with machines with £2,000 payouts, and the 10 per cent. rate of usage is, I understand it, the norm around the world.
It is important to keep category A machines in the regional casinos for reasons of public policy. We do not believe that it would be right to allow proliferation. That would be contrary to all that was said in the House.
Since I seem to be developing a reputation for pre-empting what is about to be said, I may be doing the same to the Minister, but will he comment on the percentage of category A machines in regional casinos in the eight pilot projects? He will know, as he just mentioned, that the Secretary of State said on Second Reading that she anticipates that they are likely to be about 10 per cent. of the total number of machines. However, since the Government have accepted that it is inappropriate to rely on market forces to determine the number of super-casinos, they presumably believe, too, that it is inappropriate to rely on market forces to determine the percentage of category A machines in those super-casinos, and intend to impose some sort of limit. Will he tell us that limit?
As the Bill states, there is no limit. If casinos wanted to install 1,250 category A machines, they could do so.
Then that is the limit, surely.
Exactly. However, in reality there is nowhere in the world where casinos do that—not even here, and not even with the £2,000 payout machines as opposed to the unlimited payout machines. Market forces will determine the spread of the machines within casinos. That will be part of the development taking place in casinos which will be monitored and reported to the House as part of the continuing evaluation.
My hon. Friend the Member for West Ham mentioned people who have decided, rightly or wrongly, to make decisions about whether they will get a licence or, in some cases, planning permission, when the gambling commission is set up. That is a business decision for them. If those people want to apply for planning permission for a casino at West Ham football club, or anywhere else, they have every right to do so, but assessing the likelihood of their being granted it or a licence is a business decision. If they believe that they can position themselves in the marketplace better than their competitors, fine. It costs money, but it is up to them to decide. It is not for the Government to stop them. As for any of the locations to which my hon. Friend referred, it is up to the individual company to decide.
The decision is of course trumped by the number and location. The fact that there is general agreement on a resort casino in an area does not mean that plans can go ahead. The Minister has said that there will be eight, and we now suppose that there will be one in each region.
My hon. Friend knows that, when a proposal is going through Parliament, it can be changed. The provision under discussion has been changed for good reasons. The Government have listened to parliamentarians and the general public, and responded to what was said. Hon. Members, including Labour Members, expressed great concerns on Second Reading.
Of course, the Government tend to fine-tune Bills in Committee; it is part of the process. Well, the Bill has been more than fine-tuned. It is pretty dramatic to hear that there will be no cap, but then to hear that there will only be eight casinos. We can hardly blame the operators and local authorities for thinking that they stood a reasonable chance of establishing a regional casino, on the assumption that the Government were speaking the truth when they told them that there was to be no cap. Now they have been told that the number is eight. It is not just a matter of caveat emptor, of saying that they must wait until the Bill has been passed and that if they make a decision, well, tough luck.
Business is pretty tough luck anyway, sometimes. I have read my hon. Friend's profile. It says that like many on the Labour Benches, he has made a long journey from the far left. In defending the business community to the degree that he is doing now, he shows us that is some truth in that profile. I did not believe it at first, but I do now. If business operators believed that they had all the information at their fingertips, and well-paid advisers told them, ''Go ahead and spend your money; invest it in planning permission'', that is fine by me, but it is not the Government's responsibility. We are passing a Bill, not just for business, but for the whole population, which is why we are discussing the response to our debate on Second Reading.
The problem with starting the process with a planning application is that the private sector will determine where the casinos are placed. Everyone who has spoken today has said that they want that decision made as part of a regional or local development strategy. Surely, that must predetermine the location of casinos. Such matters cannot be left purely to market forces. That is the point of limiting the numbers.
Intervening in the marketplace cannot be done purely on the back of planning or licensing. The matter is part of the ongoing discussion, which is why we shall return in Committee with a Government statement that will involve the ODPM as well as the DCMS and the role of the gambling commission. The decision must be made, but it must be made in an informed way against the criteria that I have outlined clearly today.
I have sympathy with the hon. Member for West Ham. The Minister and the Secretary of State will be faced with furious protests from all the huge companies that were led up the garden path by the Government. Those protests will be directed not only at the Minister's Department, but at 10 Downing street. Although I hold no brief for the companies—I am just worried about losing the regeneration effect—I agree with the hon. Member for West Ham. There will be real anger about the amount of money paid out on the basis of a false prospectus given to companies—some overseas, some British—by 10 Downing street and the DCMS. Some very angry people will have spent a lot of money on a completely false basis.
I will not run down that road, other than to say that the matter did not rest on a false basis. We never promised that there would be an opening of the market. People made their decisions based on what they believed to be the case at the time. If people are angry, that is unfortunate, but had we not moved into the situation that we are in now, they would have been even more angry because there would have been no casinos. That is the reality. We are now in Committee after reflecting on what was said on Second Reading, and I hope that we can return to the consensus that we had before and move forward.
The point raised about the dome is as far as possible from the truth. The dome sale has been based on its being used not as a casino, but for leisure activities. If the owners of the dome want to apply for a casino licence, that is entirely up to them.
On the question of the British casino industry wanting to protect its interests, I point out that, after the 1968 Act, it is probably one of the tightest monopolies operating in this country. Those inside a monopoly will always argue that they do not want change, because they are nice and comfortable. I can understand that because it is human nature. That is why, to some extent, companies argued that they wanted category A machines in their establishments as well as wanting to raise the highest stake of category B machines to £10,000. Our decisions are right—they move policy forward—and so was our rejection of the report of the pre-legislative scrutiny Committee.
We have tabled a relevant amendment to a later part of the Bill, but I do not want to stray down that road at this juncture. Category A machines may be allowed into small and large casinos as a percentage of the total machines that they can have under the ratio of gaming tables to machines. If that figure is 20 per cent., there would be six category A machines in small casinos, and 15 in large casinos, compared with the 10,000 that will be allowed in the eight big casinos. Where is the protection angle in that?
We are saying that we are controlling category A machines within one type of establishment. That will be evaluated over a period that will be fixed for a number of years, but the gambling commission
can come back to us. We will evaluate that, and if no harm is being done, there are no reasons not to have incremental expansion.
Returning to my visit to Australia, one thing that was said clearly to all of us was, ''Do not allow things to run away, because it is very difficult to bring them back. You should move forward incrementally.'' If the Australians could have their time again, they would not do what they did. The casino situation was pressurised. The pokie machines were released to sports clubs and there was an absolute free-for-all. They regret many of the steps that they took during liberalisation. It has not done the industry any good, and it definitely has not done the social fabric of Australia any good. Indeed, in one state, 70 per cent. of its income comes from gambling, which is unhealthy. The visit made a deep impression on me. One thing that I have said throughout my involvement with the Bill is that I am not against liberalisation, but it must be incremental and it must include the safeguards that we are building in.
I return to what I said this morning. The figure of eight sites has been decided on the basis that we need a spread of location to be able to measure how vulnerable people will be. We will come back to the House with the results, and it will be for both Houses of Parliament to decide whether we move forward. We believe that we have the balance about right, and we believe in the evaluation process. We will return to the Committee in two weeks—I hope—with the amendments that will give effect to what I have said today. We will then be able to have a full debate in the Committee and return to normal on Report and Third Reading.
If the Minister is about to wind up, I hope that he will touch on the issues of identification on entry and of proliferation of large and small casinos before he finishes.
I take the right hon. Gentleman back to a point that he just made about the need for incremental development and appropriate safeguards. In respect of category A machines, I understood him to say that there would be a fixed period for the pilot. I hope that he will reflect on that, because on Second Reading the Secretary of State said the following in respect of category A machines:
''If there is any evidence that they are causing harm, it will be for the gambling commission to reduce the stake and the prize.''—[Official Report, 1 November 2004; Vol. 426, c. 45.]
Will the Minister assure me that if the gambling commission found evidence during the pilot period that they were causing harm, it would be able to reduce the stake and prize immediately without waiting for the full period of the pilot phase, however long that might be? The Minister has indicated that it might take five years.
The Secretary of State has the power to make reductions at any time. That would be an instruction to the gambling commission. [Interruption.] The power is there, and I shall write to hon. Members to lay out exactly what the procedure is, and we shall put that on the record. The Secretary of
State will act on advice from the commission, but I shall write to the hon. Gentleman to ensure that the point is clear, and we shall put it on the record.
On a point of order, Mr. Pike. I wonder whether I could seek your advice. You will be aware from your co-Chairman that this morning we were debating an issue in respect of the assurance that the Minister had given the Committee that
''there will be no public statements or announcements before I come to Committee.''—[Official Report, Standing Committee B, 11 November 2004; c. 89-90.]
You will be aware that there was much concern in Committee this morning about newspaper, radio and television reports that a large number of members of the media were aware of what the Minister was going to say before he came to Committee.
We received an assurance from the Minister this morning, which I accept entirely, that the Secretary of State did not refer to the specific figure of eight when she spoke to the parliamentary Labour party. However, I suspect that that rather clouded our judgment this morning, because it does not alter the fact that the Secretary of State clearly made an announcement about a number of the issues related to what the Minister has told us today. I would be grateful for your advice, Mr. Pike, on whether it would be appropriate to ask the Minister to provide the Committee with a brief summary of the comments made by the Secretary of State to the PLP, and to seek absolute assurances from the Minister that no representative of the Government gave any briefing to the media regarding the number of casinos.
Further to that point of order, Mr. Pike. I say to the hon. Member for Bath that I believe that Parliament should be the first to know, and I genuinely mean that. I can give him clear assurances. I said that no statement would be made in public, to the media or anyone else. It is because there is concern—as there is in Committee and as there was on Second Reading—that the Secretary of State gave an explanation, without mentioning numbers, to reassure members of the parliamentary Labour party about the way we were moving. She also said that I would make a statement here, which I did this morning. The meeting was private; I said clearly that there would be
no public statements made. How the figures got into this morning's press reports, I do not know. As I said this morning, how discussions I had with the hon. Gentleman and the hon. Member for Maldon and East Chelmsford got into the press, I do not know.
Mr. Foster rose—
Order. I am not prepared to allow a debate on that. We must move on. I have to think of where we have to get to in our consideration. The points have been made and quite clearly we will be returning to those issues after the Queen's Speech later this month.Clause 21 Duty to promote the licensing objectives