Motion to Approve

Gambling Act 2005 (Gaming Machines in Bingo Premises) Order 2009 – in the House of Lords at 7:45 pm on 28 January 2009.

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Moved By Lord Davies of Oldham

That the draft order laid before the House on 24 November 2008 be approved.

Relevant document: 1st Report from the Joint Committee on Statutory Instruments.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 7:50, 28 January 2009

My Lords, in moving the Motion on the Gambling Act 2005 (Gaming Machines in Bingo Premises) Order 2009, I shall speak also to the Gambling Act 2005 (Variation of Monetary Limit) Order 2009.

The first order is intended to help to address the severe economic downturn in the bingo industry by increasing from four to eight the number of category B3 gaming machines that bingo halls can offer customers. Category B3 machines have a maximum stake of £1 and a maximum prize of £500. In June last year it was announced that the Government intended to make such an increase in response to a campaign by the Bingo Association, a campaign that also attracted the support of Parliament. Such widespread cross-party support was influential with the Government in making our decision.

The order is intended to help the bingo industry, which is facing difficult trading conditions. While the current economic climate is an issue for the gambling industry as a whole, there remains strong evidence that the situation in the bingo industry is particularly acute. A number of special circumstances apply to bingo halls. These include the fact that the industry's business model means that there is very high demand for these machines during relatively short periods of the day—that is, between the sessions of bingo play. Also, while gaming machine entitlements in casinos, betting shops and adult gaming centres were increased through the 2005 Act in return for the taking on of enhanced social responsibilities, bingo halls retained the same gaming machine entitlements as they had under the Gaming Act 1968.

Most important, however, is the role of bingo halls in local communities. They fulfil an important social function and provide a softer gambling environment, where the gaming machines offered remain ancillary to bingo. Of course there are risks attached to an increase in the number of these machines, not least with regard to their being seen to promote harder forms of gambling and problem gambling in general. That is not the case. These machines are already on bingo premises, while under the 2005 Act a comprehensive new system of regulation for gaming machines was established with consumer protection at its heart. The number one priority remains the protection of the public. That is why the Government rejected the Bingo Association's view that the number of B3 machines should be increased to 16; we felt that that went too far. We have agreed on eight, which is consistent with the precautionary approach that we take to gambling regulation.

It should also be borne in mind that all categories of gaming machines must comply with strict regulations and technical standards to ensure that vulnerable and problem gamblers are protected. Stringent controls on entry by under-18s to areas in bingo halls offering gaming machines are already in operation via the mandatory conditions attached to the premises licences. We can with confidence see this increase in machines without creating significant social problems.

On the question of lotteries, the House will be aware that society lotteries are lottery draws run by charities, sports and leisure clubs to raise money for good causes. Few societies currently reach the present limits relating to the maximum proceeds and prizes for individual draws; at the moment the proceed limit is set at £2 million and the prize limit at £200,000. However, the Lotteries Council and the Hospice Lotteries Association argued that these limits were holding them back from raising significantly higher sums for good causes, particularly by preventing a number of societies from coming together to promote a larger one-off annual draw—for example, a Christmas bumper draw—and these arguments were reflected in both Houses.

The Government have always been willing to consider representations made on behalf of charities and other bodies that benefit from society lotteries and, in response to those arguments, we announced last July that we intended to raise to £4 million the maximum proceeds for individual society lottery draws and that the top prize had also doubled to £400,000 for each draw. It should be made clear that the Government do not intend to raise the limit on maximum annual proceeds for society lotteries, which will remain at £10 million. The maximum £25,000 prize for society lotteries whose proceeds are below £250,000 will also remain unaltered. This level of increase, from £2 million to £4 million, is wholly consistent with the licensing objectives of the Act and achieves a satisfactory balance between providing a valuable boost to hospices and other bodies that raise funds from lottery draws and retaining the character of society lotteries. That view is supported by the Gambling Commission, which has advised that there is no evidence that an increase such as this would give rise to gambling concerns.

The Government also recognise the unique position of the National Lottery and its enormous contribution to the public good. I therefore assure the House that we have considered the impact that the proposed increase in proceeds may have on the National Lottery and believe that such an increase would not threaten income for the good causes. Society lotteries operate on a quite different scale from the National Lottery. Moreover, they target different markets. People generally play society lotteries to support a cause rather than to win a prize, whereas playing the National Lottery is about the possibility of winning a life-changing amount, with the good causes a secondary consideration. The Government remain of the view that the suggested increase to society lottery limits will not affect that difference. However, to ensure this, we will ask the National Lottery Commission to monitor the impact of the revised limit on the National Lottery and ask for a report to be made three years after implementation. I commend the orders to the House.

Photo of Lord Howard of Rising Lord Howard of Rising Shadow Minister, Culture, Media & Sport, Shadow Minister, Cabinet Office, Shadow Minister, Treasury

My Lords, I thank the Minister for introducing these orders. I declare an interest: the lottery for my local church, which I have to tell the House will not be approaching any limit at all, goes forward in my name.

According to the Henley report, bingo provides a social service and acts as a lightning conductor for gamblers, who without bingo might well drift into hard gambling, with its far greater percentage of problem gamblers. With over 100 bingo halls closing over the past two years, there is clearly a strong argument for assisting the industry by changing the restriction on the number of machines allowed. However scientific one pretends to be, it is anyone's guess what the right number of machines is. The Minister might consider keeping the number under review to ensure that the restrictions thought necessary to prevent problem gambling still allow the industry to function properly.

The other order before the House increases the ceiling from £2 million to £4 million for a society lottery—that is, a lottery run for the benefit of charities, sporting bodies and non-commercial activities. My first question is: why is there a limit? The Budd review called for the removal of a limit, and that was supported by the joint scrutiny committee in its report on the draft Gambling Bill. There is also a limit of £10 million on the amount that can be sold by any one society in a year.

The restrictions on the activities of those working for the good of others do not make a great deal of sense. The argument has been made that, if there were not these limits, there might be an adverse effect on the National Lottery. I have two points on this. First, as societies give 58p or 59p of every pound raised to charity, as against the National Lottery's 28p, the prize money that they offer could not compete with that offered by the National Lottery. If there was concern that, as the lotteries grew in size, societies would reduce the proportion of money received that they donated, the minimum amount that must be given under Section 99(2) of the Gambling Act 2005 could be amended from 20 per cent to a higher figure—say, 40 per cent. This would ensure that lotteries run by societies would retain their character, which is distinctive because, as the Minister said, the prime motivation is to benefit the cause rather than to win large sums of money.

Secondly, if societies continue to give so large a portion of what they receive to good causes, they should get the maximum help and encouragement. Good causes would be better off and there would be more opportunity for people spending money on lotteries to ensure that the money went directly to the beneficiary of their choice. If there is to be a limit, it is disappointing that it is not to be increased to the £5 million requested by the Lotteries Council. Perhaps, rather than complain, one should be grateful for the increase that the order gives.

Photo of Lord Addington Lord Addington Spokesperson for Defence, Spokesperson for Culture, Media and Sport , Deputy Chief Whip 8:00, 28 January 2009

My Lords, I shall not detain your Lordships' House long. Let me take the orders as they are presented to us. As bingo is currently suffering, one wonders whether having machines in the bingo halls is a straw for them to cling to or a lifeboat. As bingo halls are in structural trouble, I hope that when the Government consider any future increases they will also consider the fact that this is supposed to be a "soft" environment. However, I have no fundamental objection. As to the raising of the limit, the only thing that occurs to me is that the limit will presumably have to be increased over time, provided that there is no adverse effect on other bodies. Will we have an order every time, or would it not be sensible to have some system to look at this automatically? It might save a few rushed dinners in both Houses of Parliament if there were some way forward. I hope that the Government can provide us with some of the thinking behind these matters.

Photo of Lord Mancroft Lord Mancroft Conservative

My Lords, I have little to say about the first order, on bingo. I am not a great expert on bingo. However, I noticed that the Minister referred to the economic downturn. I do not think that that has any real consequence for the bingo industry. The downturn in the bingo industry has been a consequence of the enactment and slow implementation of the Gambling Act, which has frankly nearly destroyed it. That is why we have this order today, and my only comment is, "Too little, too late".

I want to talk about society lotteries. In doing so, I remind your Lordships that I have a personal interest in them. I have been a licensed operator of society lotteries since they started having professional operators in 1993-94. In fact, I moved the amendment to the then National Lottery Bill which allowed external lottery managers to start operating. I also then moved the first ever increase of monetary limits to lotteries, bearing in mind that lotteries have existed in this country since the Lotteries and Amusements Act 1976. So lotteries had their first increase in 1993-94, the second in 1998-99 and this is the third. That is three increases in 32 years; not a good record for Governments of either hue.

This increase was first lobbied for in 2000. It has taken eight years. It was lobbied for a great deal harder during the passage of the then Gambling Bill through this House. Your Lordships will remember that the Bill passed through Parliament in the wash-up period in April 2005, when after one day in Committee it went through its remaining stages within 25 minutes in your Lordships' House, following a statement made by the then Minister, the noble Lord, Lord McIntosh. He gave an undertaking to your Lordships that the monetary limits for society lotteries would be reviewed as soon as possible. That was in April 2005. This is how quickly the Government carry out their undertakings. In fact, the consultation process for this increase was completed by Christmas 2005, but I understand that, owing to the pressure of work at the Department for Culture, Media and Sport, there was no time to send it back.

My goodness, the noble Lord, Lord Addington, puts his finger on it sometimes, does he not? Why will we have to go through this every three years? We talked, debated and lobbied about the idea that there should be triennial reviews of stakes' and prizes' monetary limits in the Bill. The Government said that it was not necessary. The lottery people said, "You don't care about us; we will always be at the bottom of the heap". "Oh no you won't," said the Government, "We will look after you". Here we are, all these years later. We were right and the Government were wrong. This is a story of poor quality and shabby government.

The Government said in their document supporting this that they have virtually unanimous support. They have seven out of 10. Two of the three that did not support them are the National Lottery and its own private regulator, the National Lottery Commission; you would hardly expect it to support them. I do not know who the third was, but the reality is that this increase this evening has not got unanimous support. Everybody was told that either they took the £400,000 or they would not get anything. The noble Lord, Lord Addington, and my noble friend on the Front Bench are absolutely right. Sir Alan Budd's review of the gambling industry before we had the Gambling Act asked what was the purpose of limits—any limits at all—for society lotteries, and said that they should be removed.

The joint scrutiny committee on the draft Gambling Bill, on which I had the honour to serve in your Lordships' House along with Members of another place and other noble Lords, also recommended to the Government that all these limits should be removed. The Government finally agreed to remove the limit on stakes in the Bill, but have kept the monetary limits on pools and prizes. Like my noble friend on the Front Bench, I still do not know why it is.

When he winds up, it would be awfully helpful if the Minister could tell us what the policy objective of this order is. The policy objective of the Gambling Act is to prevent crime, ensure that all gambling is fair and to protect the young and vulnerable. The order has absolutely nothing to do with that at all. In fact, we can see, despite the fact that Ministers and officials have denied it for years, that this is about protecting the National Lottery. But protecting the National Lottery is not a policy objective of the Gambling Act. It has nothing to do with it all.

The Minister said in another place, when the order was passed through the Second Delegated Legislation Committee on 19 January, that the protection of the National Lottery must not threaten income for good causes. My noble friend on the Front Bench had it absolutely right. The reality is that, pound for pound, society lotteries give a great deal more to charity than the National Lottery. The biggest beneficiary of the National Lottery is not good causes but the Treasury. Let us be absolutely straight about this. No exchequer anywhere else in the world takes more money out of its state or national lottery than ours. It can do that if it likes, but not, I suggest, at the expense of charities. The charities that run society lotteries do so for the most vulnerable in our society. Those I have been involved in have raised many millions of pounds for many charities. Last year we had "Brainwave" for brain-injured children. That is more important than the Treasury's coffers in my view, and I think that of your Lordships' as well.

The Minister said that prizes had not been breached, as though that were a reason for not increasing them. Does that mean that if we all drove at 81 mph the Government would increase the speed limit? Not breaching them is not a reason for increasing them. That is a ludicrous idea.

I would therefore like the Minister to tell us why the limit is £400,000. Why not £600,000? Why not £550,000? What is the logic in that? It is completely illogical. Why, too, should it be 10 per cent of the pool? Why not 5 per cent? Why not 15 per cent? In fact, what has it to do with the Government at all? Why do the Government care what percentage it is? The answer is, they do not really know.

My final question on the subject of limits which I should like the Minister to answer is the following. Why does this order not abolish annual limits? The Minister in the other place and, indeed, the noble Lord, Lord Davies, when speaking earlier, made a good thing of the fact that the order does not abolish annual limits on the number of tickets to be sold. But what does the annual limit achieve? It makes no difference to the National Lottery how many tickets are sold. It makes no difference to anybody. It has nothing to do with gambling or protecting the vulnerable. It is merely the amount that the charities can raise. Why would any self-respecting Government in the world want to restrict the amount that a charity can raise? But that is what this does. It is an unnecessary regulation.

Before the noble Lord, Lord Davies, approaches his officials for an answer, I should tell noble Lords that since 1993 I have asked this question of every Minister and every official in the department. I have asked it of all the chairmen of the Gaming Board and of the Gambling Commission. None of them has the answer. The most constructive answer I received was from the present deputy chief executive of the Gambling Commission, who used to be the secretary of the Gaming Board, who said, "We're not really sure what it does. It got put in the 1976 Act by mistake, and there it sits". They know that. The annual limit should therefore be removed and the noble Lord, Lord Davies, should tell us what steps the Government will take to remove it. It simply is not good enough to have this shambles again and again.

Of course, this order will go through. I would not dream of praying against it because I have an interest, nor would I vote against it if any other noble Lord were to pray against it. However, it is a pretty shambolic order. It is not the fault of the noble Lord, Lord Davies, because it is not his department, and I do not blame him for a single second. Nor is this the fault of the officials because they have only been in the department for five minutes. The officials who wrote this document are long gone. But it is a shambles. It is an example of really poor government. The Government should apologise to the House for bringing such a shoddy piece of work before us at this late dinner hour.

Photo of Lord Steinberg Lord Steinberg Conservative

My Lords, I am sure noble Lords are aware that I used to be the executive chairman of Stanley Leisure plc and am currently the life president of Genting Stanley, the company which acquired Stanley Leisure plc. Therefore, I have considerable knowledge of the gambling industry. Bingo really is not gambling. I wish to declare that I hold no consultancies and never have.

The noble Lord, Lord Davies, will be aware of the Henley Centre's report of August 2007, which has been mentioned. The executive summary of that report states:

"The closure of Bingo clubs, especially those in the small, rural venues and deprived urban locations, has meant not only the loss of a pastime and form of entertainment but the disappearance of a unique social support network, relied upon especially by retired women. The demise of this pastime and network can have a detrimental impact upon the physical and mental wellbeing of patrons, particularly as there are often few other opportunities for this group to socialise. Bingo closures also appear to be both a manifestation and catalyst for a wider breakdown of local communities that could have a negative impact upon society".

What really concerns me is that the bingo business is declining rather more than many other industries because of taxation, the smoking ban, the reduced number of machines and now the bad economic situation. The noble Lord, Lord Davies, will be aware of the previous occasion that a cull of machines took place.

My noble friend Lord Mancroft was extremely critical of what the Government have said and done. I do not disassociate myself completely from those comments but I am dealing purely with bingo whereas he dealt principally with the change to the lottery.

As I say, all these things have happened and we now have a bad economic situation. The main plank of my argument concerns the Government's desire to permit only eight machines. I know that this is an order but I also know that the industry asked for 16 machines. Machines account for a large part of the income of all bingo clubs. They are played mainly during intervals when bingo is not being played. While machine play is ancillary to the main social pursuit of bingo, it is important. There is no real evidence of problem gambling in bingo. I should point out clearly that people say that bingo is the softest area of gambling. It is even less than that; it is a social experience for elderly and lonely people. Arguments that bingo is soft gaming are generally wide of the mark. I have never been personally involved in the bingo industry as such but I know that those who play bingo—this is mentioned in the Henley report—are generally older people of about my age. People enjoy a game of bingo not from a gambling aspect but for social reasons. My plea is as follows. I know that the order stipulates eight machines, but I ask the Government to reconsider it and change the figure to 16. I also ask them, please, to take into account the large number of clubs which have closed—I believe that more than 100 have done so—throwing several thousand workers out of their jobs, which is very bad at present, and depriving people, particularly those in small communities, of a place to meet.

The Henley Centre places great emphasis on the social aspect. In the present climate, that aspect is of maximum importance. I therefore urge the noble Lord to change the figure to 16 machines—if that cannot be done now, can it be done shortly?—as the industry has requested. That would help the industry at this very troubled time when job losses are occurring every day, as we read in the newspapers. All gambling activities are similarly affected, so will the noble Lord please soften the Government's approach, thereby saving jobs and keeping the bingo industry alive?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I am grateful to all noble Lords who have spoken in this short debate. Like them, I shall comment separately on the two orders. The noble Lord, Lord Howard, asked that we should at the very least keep under review the numbers that have been settled upon; that is, eight as regards bingo halls. His comments are supported strongly by the noble Lord, Lord Steinberg, with his great knowledge of the industry. I hear what the noble Lord says and agree with a great deal of what he says about the social role of bingo halls. As we all recognise, bingo is at the softest end of gambling. People play bingo as a social pursuit rather than with the specific intent of gambling, although that is obviously part of it. The industry has made the strongest representations that we should increase the relevant figure to 16. But the Government have wider considerations at stake. They have to be reassured that we are not unduly increasing levels of gambling. We have an obligation to the wider society. We have responded to pressure from the industry, and we have doubled the number. Putting it up to 16 would have been a stage too far, but I undertake that we will keep the figure under review.

The noble Lord, Lord Mancroft, berated the fact that these issues have to be done by order. That is so because that is the basis of the primary legislation that set up the position. I give the undertaking that the Government will keep the position under review. One or two extravagant claims have been made that the bingo industry is being destroyed. With 614 bingo halls in regular existence, that point can be exaggerated. I hear what noble Lords have said. The Government's judgment is that doubling the number of machines in each bingo hall that wishes to do so is about right. I listened to the representations.

On the wider representations with regard to the limits, it will be recognised that the Government have doubled the limits as far as the lotteries are concerned. The noble Lord, Lord Mancroft, berated the Government and their position. He is an in an excellent position to identify that the Gambling Act 2005 was scarcely the Gambling Act that the Government set out to produce. He will know all too well, as he said, that we got the legislation through in the wash-up, and it betrays some of the weaknesses of having been rushed, with the Government having to settle for what the Opposition put as priorities in those very limited days. I am sure that the noble Lord, Lord Mancroft, like I, has been in those negotiations when the Government have to get all their legislation through in the week before a general election, and he will know that the boot is on the other foot. Therefore, if the gambling legislation has weaknesses, he might look at the part played by his party—

Photo of Lord Mancroft Lord Mancroft Conservative

My Lords, I do not for a single moment let my own party off the hook. If the noble Lord had been in this House longer, he would know that I have given Ministers on both sides an equally hard time on this, and when we get back into power, very shortly, I shall give my noble friend Lord Howard, when he is sitting on that side of the House, just as much of a hard ride as I have given the noble Lord this evening.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

Yes, my Lords, but the noble Lord is not attended in the debate by large numbers of people making the case that he is making who do not have a declared interest like he does. If I am meant to respond to the widespread public position and the great concern about this; in this House are a very large number of noble Lords who have great associations with charities. Is this House packed with people saying, "This is the change we want for the benefit of charities, because the noble Lord, Lord Mancroft, with his special insight into the issue and through his special interest speaks on behalf of all of us"? I can only say that the noble Lord is a lonely voice. Therefore, he should not exaggerate his case too far. He should recognise that the Government work within limits.

I say to all noble Lords present that, of course, the Government could always be bid up with regard to these figures. Of course, the industry and the societies are going to make their case for more. It would be amazing if the Government ever produced a result that was beyond the demands that were placed on them. When did that ever happen? What always happens in these circumstances is that bids are made by interests, as they should be, because people genuinely believe in the work that they do—I pay tribute to the noble Lord, Lord Mancroft, and his contribution in those terms, but of course he is going to make a bid—and the Government have to balance those bids against wider considerations and the wider public interest. That is why we arrive at the figures that we do, and that is why I am moving the order.

Motion agreed.