Clause 107 - Lapse
Gambling Bill
10:00 am

Mr Bob Russell (Shadow Minister (Culture, Media & Sport), Culture, Media & Sport; Colchester, Liberal Democrat)

I beg to move amendment No. 243, in clause 107, page 49, line 20, at end insert

'provided that the provisions of section 181 shall apply where the licensee dies,'.

We all accept that mother nature will get us all eventually. Unfortunately under the Bill, if a licensee dies, business, as we understand, must cease until a new licensee can be appointed. That is recognised in clause 181, which provides for a period of a week after the death of a licensee, perhaps from a heart attack or a road crash, which could not be predetermined.

The amendment would ensure a grace period, because otherwise the business would cease as soon as the licensee died and an offence would be committed if the business continued to operate. We therefore suggest that provisions similar to those in clause 181 should apply. There are those who believe that one week, as set out in clause 181, is itself insufficient, but it is better than nothing. 

Mr Richard Page (South West Hertfordshire, Conservative)

I support the amendment, which in many ways interrelates with new clause 11, which we shall discuss in a moment. As the hon. Gentleman says, if mother nature or bad driving claim any of us who operate a gaming licence, the current licensing system seems to give the executors of one's estate a much more generous period to enable them to put affairs in order and enable the business to keep going. The Bill takes away the power to reinstate an operating licence but the premises licence continues. That is a little like saying that one can have a public house but one cannot sell beer, which rather negates the point of having a premises licence.

I draw to the Minister's attention to a fact that the Committee will have got to know during its consideration of the Bill: the gaming and gambling industry deals with vast sums of money. It is no exaggeration to say that billions of pounds are involved. Some American corporations have absolutely enormous resources. Therefore the pressure on small businesses will become heavier and heavier. It is the Committee's responsibility to try to give the small business man a fair break.

I shall not talk about the fact that small businesses are groaning under the weight of regulations and excessive taxation, or go through the list of impositions that the Government have placed on them, because you would rule me out of order, Mr. Gale. In resisting that, I will say that people may ask why small operators have not adjusted and changed their affairs to take account of that situation. The plain fact is that someone who wants to run a small business must have some form of independence of mind; they must be an individual. The ability and wish to conform may not necessarily be the strongest in such a person, but I will fight for that individualism and independence for as long as I can.

No doubt the trade associations, such as the Bingo Association, will be advising their members on how to put their various affairs in order so as to meet the requirements of the Bill as it stands. However, the Minister is a fair-minded and generous person; he has given way and listened to reason so often already this morning that I like to think that he will consider the issue again and say, ''We'll give the small business man a break. We'll allow the estate to have the operating licence for a little longer, so that the affairs can be put in order.'' That would enable businesses to keep going and keep employment in the area.

Mr Malcolm Moss (Shadow Minister, Home Affairs; North East Cambridgeshire, Conservative)

I seek your direction, Mr. Gale. I tabled new clause 11, which we shall discuss in a moment along with clause 107 stand part, but the debate going on now is in effect the same as the one that we will have on the new clause. That replicates clause 181, which relates to reinstatement of a premises licence. Amendment No. 243 simply replicates that clause too, although there is a small deviation in new clause 11, in that it would change the number of days from seven to 28. I feel as though I should be speaking to the new clause now, because the Minister could then wind up both debates in one speech.  

The Chairman indicated dissent.

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

We are discussing two different types of licence: a premises licence and an operating licence. Amendment No. 243 would provide that an operating licence did not lapse on the holder's death. It is well intentioned and the case for it has been put quite strongly. When the owner of a business dies, it is common for it to pass to the surviving partner, be that a husband or a wife. However, we are considering operating licences, and the amendment would give rise to consequences that mean that, regrettably, I cannot support it.

A valid operating licence is central to the world-class system of regulation that we want in the UK. The issuing of a licence will involve stringent checks on the suitability of the applicant operator to carry out the gambling activities for which they are seeking a licence. That is vital if we are to provide a well regulated industry that is free from crime. Clearly, if the operator of a gambling business dies, those stringent checks should take place afresh on the new proposed operator, even if they are the surviving partner.

We have said many times that we want to transfer all the good in the Gaming Act 1968 to a modern setting by establishing a commission that is much stronger than the existing Gaming Board. Hon. Members have said that there are problems, but that is not the case. To date, even under the 1968 Act, a gaming or betting licence cannot be transferred, and the hardship that hon. Members have said could arise if a partner dies has not, to our knowledge, arisen since 1968, because stringent checks are in place. We are transferring those checks from the 1968 Act to the gambling commission. We are talking about an operating licence, not a premises licence, which can be transferred. It is for those reasons and to preserve the integrity of the betting industry that I ask the hon. Member for Colchester (Bob Russell) to withdraw his amendment.

Mr Bob Russell (Shadow Minister (Culture, Media & Sport), Culture, Media & Sport; Colchester, Liberal Democrat)

Is the Minister saying that, if the licensee is involved in a fatal crash while driving to his business at lunchtime, that business will not be permitted to open? In another scenario the licensee is seriously injured in the accident and is put on a life support machine. Will the operating licence continue if he is technically alive but in no fit state to run his business?

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

Again, we have to look at the definitions. Are we talking about the corporate operator or about an individual? More than one person can be on the operating licence, in which case it would be possible to deal with a death. We are transferring the arrangements that operate under the 1968 Act into this Bill. Those will be carried out to a large extent by the gambling commission. There has been some debate about the possible watering down of provisions and the explosion in gambling and gaming, but that will not happen except under extremely controlled conditions. These licences are central to the integrity of the operation. We are doing no more than already exists in the 1968 Act, and I do not believe that that has placed an undue burden on small businesses.  

Mr Richard Page (South West Hertfordshire, Conservative)

I appreciate everything that the Minister has said. We all want to see integrity in the whole gaming industry. He is looking a little higher up the chain, however; I have in mind a small business which is just an owner-operator, on his own with no partner. He might be reluctant to bring someone else in and to add their name and enable them to operate the business. He may wish to sell it and have another operator come in. This measure will take away the time scale in which he can make the necessary change.

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

Hon. Members are putting hypothetical situations to the Committee. We are not dealing with hypothetical situations; we are operating in real conditions. The licensing structure, which will largely be operated by the gambling commission, is absolutely central to the integrity of the industry. The Bill will maintain a system that has operated for some decades, and to the best of my knowledge none of the situations that hon. Members have described has arisen. I believe that the integrity of the industry is more important than hon. Members' hypothetical examples.

Mr Bob Russell (Shadow Minister (Culture, Media & Sport), Culture, Media & Sport; Colchester, Liberal Democrat)

The Minister has already dismissed the amendment, despite the strong common-sense case that we put forward. Although there would probably be only a few instances during the lifetime of the legislation, without some provision and some period of grace in the unfortunate event of a sudden death a small family-owned business could cease trading. What happens to the licence if someone is seriously injured or otherwise mentally impaired but still living? The Minister did not respond to that realistic scenario. I invite him and his officials to take note of what has been said and to see whether some form of wording can be inserted. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr Roger Gale (North Thanet, Conservative)

With this it will be convenient to discuss the following:

New clause 11—Reinstatement of lapsed operating licences—

'(1) This section applies where an operating licence lapses under section 107(1).

(2) During the period of 28 days beginning with the date of the lapse of the operating licence a person may apply to the Commission for the licence to be reinstated with the applicant as the licensee.

(3) The provisions of this section shall apply in relation to an application for reinstatement as they apply in relation to an application for an operating licence—

(a) subject to provisions of this section,

(b) with any other necessary modifications.

(4) An application for reinstatement must (in addition to anything required by section 65 or 69) request that the reinstatement take effect upon the application being granted.

(5) The Commission shall grant an application for reinstatement unless it thinks it would be wrong to do so having regard to the matters in sections 66 and 67 (as applied by subsection 3 above).

(6) On the grant of an application for the reinstatement of an operating licence the Commission shall— 

(a) alter the licence so that the applicant for reinstatement becomes the licensee,

(b) specify in the licence that the reinstatement takes effect at the time when the application is granted, and

(c) make such other alteration of the licence as appears to it to be required (which may, in particular, include an alteration to reflect a decision of the Commission under section 73 as applied by subsection (3) above to make new or varied provisions for the attachment or exclusion of conditions).

(7) An application under this section for the reinstatement of an operating licence must (in addition to anything required by section 65) be accompanied by—

(a) the licence, or

(b) both—

(i) a statement explaining why it is not reasonably practicable to produce the licence, and

(ii) an application under section 100 for the issue of a copy of the licence.

(8) In the case of an application under section 100 made in accordance with subsection 7(b)(ii)—

(a) the application shall be made by the applicant for reinstatement, and

(b) a reference to the licence being lost, stolen or damaged shall be treated as a reference to the licence being unavailable to the applicant for reinstatement.

(9) Regulations under section 65, as they have effect in relation to applications for reinstatement by virtue of subsection (3), may require notice to be given to specified persons.

(10) Where an application is made under this section for the reinstatement of an operating licence, the licence shall have effect as if the applicant for reinstatement were the licensee during the period—

(a) beginning with the receipt of the application for reinstatement by the Commission, and

(b) ending with the determination of the application by the Commission.'.

Mr Malcolm Moss (Shadow Minister, Home Affairs; North East Cambridgeshire, Conservative)

Without repeating the arguments, I can tell the Committee that the debate that we just had is the same as the debate that we will have on new clause 11, because we have simply taken the reinstatement of a premises licence in clause 181 and applied it to the reinstatement of an operator's licence in new clause 11. All we have done is change the seven-day period in clause 181(2) to 28 days, which appears in subsection (2) of the new clause.

We recognise the need for the gambling commission to do proper checks on a new operator and to allow 28 days for that to happen, whereas a premises licence can be done much more quickly. However, it comes back to the same point. The Minister says that under existing legislation, there are no provisions to allow a gaming licence to continue. He is saying, therefore, that in a family-owned business where a husband and wife are bingo operators, but only one has the licence, that business would have to close if one of them were to die. I am puzzled, then, as to why the Bingo Association has said to us that it sees that as a problem with the Bill. There is no provision for an operator's licence to continue in some form or other, so that the business does not close on the death of the licence holder. That means that jobs would be lost, and the value of that business to an estate would be undermined because it would not be an ongoing business.

We are not going to press the matter, because we recognise the Minister's argument about the integrity of operators' licences, but it would help small bingo operators if there were some practical guidance from the Minister about how, when the Bill is implemented, they could face up to that eventuality of one of the partners dying and the business closing. The business's value would be seriously undermined, whether or not it could be resold in that interim period: it probably could not be. The new clause is an attempt at least to give some continuity so that arrangements can be made to ensure the survival of the business.

Mr Roger Gale (North Thanet, Conservative)

Before I call the Minister, I remind the hon. Gentleman that if at the end of the debate he wishes to submit new clause 11 to a vote, he will need to indicate that and it will be called at the appropriate point in the proceedings.

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

The new clause would overturn the provision in clause 97(2), which we have already debated, which provides that an operating licence

''may not be varied . . . so as to authorise anyone other than the person to whom it was issued''.

The reinstatement of a premises licence does not involve the same conditions as for the suitability of the operator running the premises, precisely because such checks have already been carried out in the granting of an operating licence. For that reason, I cannot agree with the hon. Gentleman that we should provide for the reinstatement of an operating licence in these circumstances. It seems right to us that a new operator should go through the same application procedure as any operator of a new gambling business. Before licences are issued there will be stringent checks on the suitability of the applicant for the gambling activities for which they seek a licence. That is vital if we are to provide a well regulated industry that is free from crime.

Mr Richard Page (South West Hertfordshire, Conservative)

Does the Minister accept that it is a little unfair of him to make out that we should have moved new clause 11 when the Committee was dealing with clause 97, because we are dictated to by the selection of amendments? I think that the Chairman would have objected if we had tried to move new clause 11 in the middle of our debates on clause 97.

I refer the Minister to clause 107(1), which clearly says:

''In the case of an operating licence issued to an individual, the licence shall lapse if—

(a) the licensee dies''.

It then goes on to deal with mental and physical incapacity. The plain fact is that as soon as the licensee dies, their business has to close its doors. Anybody knows that when one runs a business, continuity of supply to one's customers is vital. Restarting or relaunching at a later date makes life that much more difficult. This request for 28 days in which to get a new applicant in place, apply for a new licence, keep the business going and ensure that the estate is not unduly damaged is something that any Government should do to help small businesses.

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

I can only repeat that we are not doing anything different to that in the 1968 Act. I do not know whether the hon. Gentleman was listening, but I explained that if an individual wants reassurance that their business can pass to the wife or another family member, they can have two people on the operating licence. People do put two people on the operating licence. This debate is about semantics. We are discussing hypothetical cases, but nothing similar has happened in the past three decades. People have used common sense: if they want a further operator, they put someone else on the operating licence. That is not too difficult. If it does prove difficult, there should be good reason for that—that is what the Bill should protect against.

I reiterate that I will need a lot of persuading before I undermine the integrity and transparency of the industry, which has come about as a result of the 1968 Act. Broadly speaking, that is what we are trying to transfer into a modern setting through a strong gambling commission. Therefore, we will reproduce whatever we can from the 1968 Act in the Bill. The case for the new clause has not been made. All the evidence to date is that people are sensible and operate within the confines of the 1968 Act, and that that has operated satisfactorily.

Mr Malcolm Moss (Shadow Minister, Home Affairs; North East Cambridgeshire, Conservative)

I am grateful to the Minister for making every effort to justify his position. He has made some sensible arguments, which we accept. I must say that I am puzzled as to why the Bingo Association believes the arrangement to be a problem for its members; I   shall certainly seek its clarification. If the Minister is right in saying that there has never been a problem under the 1968 Act, he has a powerful argument.

I am trying to recollect whether we had a similar problem during debates on the Licensing Bill with how businesses could continue to operate when pub licence holders die. I believe that a solution was arrived at that might help us in this situation. Perhaps the Minister should have his officials look at that and consider whether something in parallel could usefully be used, because the solution in the 2003 Act enabled businesses to continue in the event of such things. However, under the provisions in question, the business might have to close down for a period.

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

Representations have been made to my officials. We are probably talking about two things: the operating licence and the premises licence. To help the hon. Gentleman, I understand that a problem with the seven-day period in the premises licence has been raised in—[Interruption.] I think we need to go back to Room 10; things seem to be falling apart. The period is seven days. We have chosen six months, but that is to do with the premises licence. The issue has been raised and it may be that some of the big operators have been asking about the premises licence rather than the operating licence. I am just trying to be helpful to the hon. Gentleman.

Mr Malcolm Moss (Shadow Minister, Home Affairs; North East Cambridgeshire, Conservative)

I am pretty sure that the Bingo Association knows the difference between an operating licence and a premises licence. In fact, its counsel wrote new clause 11 for our benefit. Those concerned are quite clear why they have asked us to table that new clause, speak to it and see what the Government's response would be. The Minister has made his position clear, but I would again ask him to look at how things are done under the 2003 Act. There may be a possibility in it that could be used.

Mr Roger Gale (North Thanet, Conservative)

I had better clarify whether the hon. Gentleman intends to move new clause 11 later.

Mr. Moss indicated dissent.

Mr Roger Gale (North Thanet, Conservative)

He does not. I would not have wanted him to miss the opportunity to do so, had he wanted it.

Question put and agreed to.

Clause 107 ordered to stand part of the Bill.

Clauses 108 to 111 ordered to stand part of the Bill.