Clause 224 - Use of Machine

Gambling Bill – in a Public Bill Committee at 3:45 pm on 7th December 2004.

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

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

Subsection (1) provides the option for the Secretary of State to

''make regulations controlling the circumstances in which a gaming machine is made available for use.''

In simple terms, there are different types of machine. Some are based on a random chance; in other words, the chance of winning on every game is the same, so the fact that a previous player happens to have had a big win on a particular machine will not alter the likelihood of a payout on the next game. That is one category of machine.

The other category is machines of a managed non-random nature, and amusement-with-prizes machines fall into that one. They allow the operator to determine the exact price value of payouts over a certain period, as opposed to merely setting the probability of payouts. If an AWP machine has paid out a large sum early on in a period, the money that it will pay out, and thus the probability of winning, is reduced.

There is a strong case for including some reference to the randomness of a particular machine in the clause. Perhaps the Minister will explain to the Committee why it was appropriate to omit it. It is not included in the regulations that the Secretary of State may bring to bear. I believe that the idea that gaming machines should be random was accepted in the Budd report, yet no reference to randomness appears in the clause.

The Secretary of State may make the regulations, but it is important that, before they are introduced, she should refer to empirical research on the impact of any strategy and the risk of unintended consequences, which may, of course, outweigh any intended benefits. The clause lacks any reference to the randomness of the machines about which the Secretary of State may

make regulations or to the fact that before regulations are made there ought to be reference to empirical research.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

Does my hon. Friend share my concern about the nature and intent of paragraph (e)? It refers to ''the display of information''. Does he have any views about why the Government might wish to include such a reference?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I have to be entirely honest with my hon. Friend and say that it had not crossed my mind that that was a problem. Obviously, he has seen more than I did. No doubt, when he has the opportunity to get to his feet, he will explain to us what he thinks on the matter. I had no problem with that paragraph; my hon. Friend needs to make his own points at the appropriate time.

Photo of Mr Nick Hawkins Mr Nick Hawkins Conservative, Surrey Heath

My point is slightly different from those made by my hon. Friend, although, of course, I agree with what he just said.

During the Committee proceedings, a number of us, including my hon. Friends the Members for North-East Cambridgeshire and for South-West Hertfordshire, have raised the large number of things in the Bill that are left to secondary legislation. My hon. Friend the Member for South-West Hertfordshire is particularly good at making the point that statutory instruments are nodded through, on a take-it-or-leave-it basis, without our having any ability to amend them. Any Government with a large majority can force such things through the House.

Is there any chance of the Minister telling us that he and his advisers will do their best to let Committee members—and all hon. Members—see the regulations relating to clauses 224 and 225, at least in draft, before Report and Third Reading, and before the Bill goes to another place? That would be helpful. It is particularly important that the regulations controlling the circumstances in which gaming machines are to be used are drafted. I say that for the sake of the successful manufacturing industry in this country, members of which I have met regularly during the past 12 or 13 years at BACTA conferences and the successful Amusement Trade Exhibition International show.

The industry should know what the regulations will look like before Report and Third Reading, and before the Bill goes to another place. If it becomes law and the regulations are causing problems for the hard-pressed manufacturing industry and the operators, we will not have the opportunity to debate the regulations—it will be too late. I earnestly plead with the Minister and those who advise him to show all hon. Members at least a rough draft of regulations relating to this part of the Bill, because that would be helpful. I hope that if the Minister cannot undertake to do that, he will write and say that he is prepared to show us, the Committee members, a rough draft.

This Bill has been so long in gestation that I cannot believe that there are not some people somewhere in the Department who have not prepared an early draft

of the regulations for the use and supply part of the Bill. When my party was in government, I worked in the predecessor to the DCMS, the Department of National Heritage, as a Parliamentary Private Secretary, so I have some understanding of how the Department used to work.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

Perhaps I can follow in my hon. Friend's footprints, because I have expressed concern about the regulations and the power that the Bill will put into the hands of the Secretary of State. As my hon. Friend said, clauses 224 and 225 are another example of such a power.

I shall not read a comprehensive list from the Bill. If I were filibustering, I could read all the clauses bit by bit, up to clause 224, where the Secretary of State has a ''may'' rather than a ''shall'' power.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. The Chair does not.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I know where the power lies in this Committee and I will not upset the Chairman, Mr. Pike.

Clause 4 is a ''may'' clause; clause 7 is a ''may or shall'' clause; then it goes a bit quiet until clauses 35, 36, 44, 52, 56, 74, 84, 88, 96 and 120.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

Not when I play bingo. ''May'' or ''shall'', or both, then appear in clauses 105, 116, 121, 125—I am nearly up to clause 224, Mr. Pike—147, 151, 157, 159, 163, 169, 186, 220, and so on.

Those of us who have been in the House for a number of years have seen all this before. I vividly remember that everybody voted for the legislation establishing the Child Support Agency because it is right that people own up to their responsibilities. When the regulations were introduced, it was a nightmare. Every one of us who was a Member of Parliament at the time had people flooding into our surgery because the regulations were trapping them in an unreal world.

I am desperately worried that we have reached clause 224—you will be delighted to hear that I shall not speak to clause 225, Mr. Pike—and we have found regulation after regulation after regulation. I do not know why we are even bothering to debate the Bill. Why does the Bill not simply say, ''The Secretary of State may, by regulation, determine what is going to happen''? Then we could all go home. The Minister might be pleased by that because he has taken a bit of a drubbing today.

The Minister should explain how the regulations are to be addressed by the House. Statutory instruments are an almost automatic process—they pass through as if they were going through a sausage machine—and there is no opportunity for amendment or debate. We have the same thing here. By agreeing to the clause, we are saying, ''Whoops! It is over to the Secretary of State to do it by regulation.'' There is no debate or

discussion; it is all down to the Secretary of State. That is not satisfactory and it is not democracy. If we are going to run our lives through secondary legislation, why do we not all go home and leave it to the civil servants? We could pass through all these ''mays'' and ''shalls'' in one-and-a-half-hour sittings and I could spend more time with my family.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

The Minister may say that.

I hope that the Minister will explain how the Government intend to deal with the matter. Will there be one statutory instrument, 50, or one per clause? How is it going to happen?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I am very disappointed by that contribution because the hon. Gentleman has missed the whole point of the Bill. If one wants to fix things in the Bill and have primary legislation like the 1968 Act, that is an option. However, I do not believe that it would go down very well with the industry, which has been asking for flexibility and a structure that can respond to innovation on one hand, and protection of the public on the other. If one wants to put everything to the House, which one can do—and the 1968 Act is a classic example of that—so be it. The hon. Gentleman has just argued forcefully for returning to the situation under the 1968 Act.

If we want flexibility, we have to delegate to the gambling commission, in the first instance. To ensure that that regulator has some responsibility to Parliament, we must ensure that its recommendations are considered by the Secretary of State. That is what the Bill is for. The alternative is to return to the situation under the 1968 Act and put everything in the power of the Secretary of State, without any regulation or flexibility. Every time there was change in the industry, the legislation would have to come back to the House.

We would be bypassed by the development of the electronic age in which we live; this place does not move at the speed of the electronic age. We would finish up with an industry that would move backwards. The Bill is intended to allow the industry to compete in this country and internationally. If the hon. Gentleman wants to tie the industry down, so be it. He can go back to the model of the 1968 Act, the case for which has been prosecuted in his contributions.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I thank the Minister, but he has not understood a single word I said. I am not asking for everything to be placed rigidly in the Bill. The use of regulation has become excessive, and it is all Secretary of State, Secretary of State, Secretary of State. The Minister may trust the Secretary of State now and for ever, but I am slightly sceptical. If the Bill included the words ''with reference to the commission'', ''following advice from the commission'' or ''with agreement by the commission'', that would be fine, but it does not.

Other clauses do have such wording; I shall give an example. I genuinely pulled one out at random. I am sure that there are much better examples. Clause 115 states:

''The holder of an operating licence shall comply with a request of the Commission'' to do this, that and the other. I do not see why the Secretary of State should push himself up to the front in this arrangement. Why should the gambling commission not do that? With respect, I would have a lot more faith and trust in the commission than in the Secretary of State. This Bill is a shambles. I would far rather the gambling commission ran our gambling than the Secretary of State.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport 4:00 pm, 7th December 2004

I shall not prolong this exchange. I can only say that that was not the reflection of the pre-legislative scrutiny Committee, on which the hon. Gentleman sat for a number of weeks. That Committee said that the legislation was good and that it wanted to reflect on it. We probably accepted 95 or 96 per cent. of its 100-odd recommendations. After that, people were saying that it was a good piece of legislation, and we have taken it forward. Some 90 per cent. of the Bill was still there, although we had to address the argument on casinos. There is a bit of a contradiction between what the hon. Gentleman says now and what was said during the pre-legislative scrutiny Committee's discussions.

We published a delegated powers memorandum in February 2004 that explained the intention on delegated powers. We will publish a new delegated powers memorandum as soon as possible, but at least we produced the broad policy, which I think the hon. Gentleman was asking for.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I wish to follow the theme of this debate. The Minister says that there has been proper consultation, mentions the scrutiny Committee and says that this flexible Bill allows the Secretary of State, the gambling commission or whoever to bring forward guidelines. If that is wholly true, why is it that no matter whom we talk to in the industry—the Bingo Association was mentioned in The Guardian but, as one would expect, we have also been talking to the ABB, the Casino Association, uncle Tom Cobleigh and all—none of them seems happy? If the Bill is so wonderful, why is there such disquiet? My hon. Friend the Member for South-West Hertfordshire put his finger on the reason: there is so much uncertainty. We accept that in large measure it is an enabling Bill and that it has to be flexible to keep pace with the rapid change of the industry. However, at the same time, assurances need to be given—otherwise everybody will be left hanging in the air. That is the point that my hon. Friend was making.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I shall give what I hope will be the definitive word on the issue. The duty to advise the Secretary of State is clearly laid down in clause 25. Clause 25(2)(b) states that such advice should be given

''on such other occasions as the Commission thinks appropriate.''

The clause is fairly wide on the issue of giving advice to the Secretary of State, and a judgment will be made on that. The industry will make that representation in its particular narrow area, and that is absolutely right. It usually wants more and others to have less; that is

part of life and one has to make a judgment on it. I say very clearly that the Bill has been broadly accepted by the pre-legislative scrutiny Committee. We broadly accepted that Committee's advice on the parts that it did not accept. Many said that it was a good piece of legislation and, although we are now into detailed scrutiny of the Bill, I do not believe that that has changed.

Clause 224 allows regulations to be made to control any and every aspect of how gaming machines will operate. That ranges from how players pay for the use of the machine to displaying information on and around the machine. We want to give flexibility to regulations so that the detailed aspects of machine use can be controlled. That is a key part of the protection in the Bill. For example, if it helped to prevent problem gambling, the regulations could require warnings to be displayed on screens and compulsory breaks in play; the hon. Member for Hertford and Stortford asked what would be displayed. Moreover, the regulations could control how smartcards and similar devices for electronically storing money could be used. The old method of inserting coins into a machine to make it work has long been overtaken by modern technology.

Players could also be protected against unfair games; some machines will be required to operate truly randomly. Alternatively, we could set minimum returns for players: set a minimum proportion of the stake paid into the machine that must be returned as prizes, as is now required by the Gaming Board. We will look to the gambling commission to advise the Government on the details of what controls are best to achieve the licensing objectives. I expect that the commission, in advising Ministers, will draw on the experience of other jurisdictions, expert research, evidence and, as it develops, experience in this country.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

I hesitate to stop the Minister in mid-flow, but I wonder whether he could allude to subsection 2(e), ''the display of information''. What kind of information do the Government intend to include?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

We intend to include, for example, stickers saying that no under-18s can play a certain machine, or literature about breaks in play. All sorts of information can be displayed, which will achieve the objectives that underpin the Bill and to which the hon. Gentleman referred. Information will advise players of dangers of not doing certain things and of what machines are legal for under-18s to play.

As I explained in earlier sittings, the regulations are at the top of the tree in terms of machine regulation. Neither the standards set by the commission on manufacture nor licence conditions can undermine those central regulations. As always, they provide us with the flexibility needed to regulate the industry.

Photo of Mr Nick Hawkins Mr Nick Hawkins Conservative, Surrey Heath

Unless I failed to spot it in what the Minister rapidly read out, I do not think that he answered my point about seeking a draft of the regulations. Reflecting on what my hon. Friend the Member for South-West Hertfordshire said, I suspect

that on Report hon. Members will want to reconsider clause 25 and whether the gambling commission or the Secretary of State should take the lead.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

The hon. Gentleman asked me to give a broad outline of the regulations. I have said that in February 2005 we will publish the delegated powers memorandum explaining our intentions. I am giving a commitment that we want to publish a new delegated powers memorandum as soon as possible. That will be to guide hon. Members on what we are doing on delegation. I cannot give any promises on individual regulations at this stage, but we will give guidance, as we already have done.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

The Minister has not answered my point about randomness and gaming machines. The Budd report stated that gaming machines should be random, and there is an acceptance that most machines in casinos should be random. Does he feel that that should be included in the Bill, or does he think it is already included, as I suppose it is, in the catch-all paragraph (f), which refers to

''any other matter relating to the manner in which a machine operates''?

What is the Government's view on randomness?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

The hon. Gentleman has answered his own question. Paragraph (f) allows us to require a machine to be random. The Government's position is that category A machines should be random and others need not be.

Question put and agreed to.

Clause 224 ordered to stand part of the Bill.