Mr Don Foster (Shadow Secretary of State for Culture, Media & Sport, Culture, Media & Sport; Bath, Liberal Democrat)

I beg to move amendment No. 240, in clause 97, page 45, line 20, at end insert

', unless the operating licence is transferred pursuant to subsection (7) below'. 

Mr Roger Gale (North Thanet, Conservative)

With this, it will be convenient to take amendment No. 239, in clause 97, page 45, line 43, at end add—

'(7) The Commission shall make a statement regarding the circumstances under which an operating licence may be transferred.'.

Mr Don Foster (Shadow Secretary of State for Culture, Media & Sport, Culture, Media & Sport; Bath, Liberal Democrat)

I am grateful, Mr. Gale, and I am sure that you will find this debate particularly scintillating and fascinating, because it refers to changes in licence agreements. The explanatory notes are, as ever, inordinately helpful. They tell us:

''Holders of operating licences may, for their own commercial reasons, wish to vary the gambling facilities that they provide, whether that is to cease carrying out an activity, or to start a new activity. Equally, they may wish to vary an individual condition that has been attached to their licence. In such circumstances, the holder of an operating licence will need to apply to the Commission to vary the terms of the licence.''

That is what the clause is all about. However, interestingly, the explanatory notes go on to state:

''An application for variation cannot be used to transfer an operating licence to another person. Operating licences are non-transferable.''

That is where the amendments come in.

It is clear that an operating licence cannot currently be transferred and that provision should be made to effect such a transfer, if deemed necessary. A company that holds an operating licence could undergo corporate restructuring, which would require it to hold its assets with an operational function in one corporate identity. Equally, a company may wish to reorganise its structure for the purposes of consolidation or disposal, so that the entity holding an operating licence would wish to transfer the licence to another related or associated company within the corporate group.

Such flexibility is certainly not unusual, and it is usually contemplated in corporate contracts and corporate finance. It would be unreasonable not to permit such a transfer if the commission was satisfied that the transferee was an appropriate holder of the licence. Clauses 95 and 96 provide for a change of control of the holder of an operating licence, and the amendment is consistent with the approach set out in the provisions on change of control.

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

Clause 95 already deals with corporate control. Transfer is different from corporate control, so the amendment does not address the issue.

Operating licences are central to the new system of regulation and will involve stringent checks on the suitability of the operator to carry out the gambling activities for which they seek a licence. The commission will have to satisfy itself as to the integrity of the applicant or relevant persons, and their competence and financial circumstances. All that must take place before the licence is issued, which is vital if we are to provide a well-regulated industry that is free from crime. If the operator of a gambling business changes, stringent checks should clearly take place afresh on the new proposed operator. For those reasons, I cannot agree that we should provide for circumstances in which an operating licence can be transferred. It seems right that any operator should go through the same application procedure as any   operator of a new gambling business. I reiterate that corporate control is dealt with in clause 95, and clause 97 is about licensing.

Mr Don Foster (Shadow Secretary of State for Culture, Media & Sport, Culture, Media & Sport; Bath, Liberal Democrat)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 97 ordered to stand part of the Bill.

Clauses 98 to 103 ordered to stand part of the Bill.