Clause 263 - Application of sections 264 to 268

Gambling Bill – in a Public Bill Committee at 9:30 am on 14th December 2004.

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Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs 9:30 am, 14th December 2004

I beg to move amendment No. 368, in clause 263, page 117, line 9, leave out from beginning to 'and' in line 10 and insert 'which have a bar'.

Photo of Roger Gale Roger Gale Conservative, North Thanet

With this it will be convenient to discuss the following amendments:

No. 349, in clause 263, page 117, line 9, leave out paragraph (b).

No. 388, in clause 263, page 117, line 9, after 'alcohol', insert 'or food and alcohol'.

No. 389, in clause 263, page 117, line 9, after 'alcohol', insert 'and food'.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

The clause aims to grant permission for gaming machines to those premises that are currently authorised by the Gaming Act 1968 to have a full on-licence under the existing liquor licence. That licence is due to disappear on the coming into force of the Licensing Act 2003, which regulates the sale of alcohol and deals with regulated entertainment. It will be replaced by a single licence that covers the sale of alcohol and the provision of public entertainment. The Licensing Act sweeps away the old distinctions between on-licences and off-licences, part 4 licences for restaurants and the like.

Welcome as that is, it has created difficulties in the Bill because the old definitions can no longer be relied on. We are not sure that the Bill needs to reinvent the old definitions and the invention of an ''on-premises alcohol licence'' does not appear either necessary or accurate, as the Licensing Act sees no need to make such a distinction and an alcohol licence on those terms does not exist under that Act. By defining such permission as being confined to those premises licensed under the Licensing Act

''which are used primarily for the supply of alcohol for consumption on the premises'', we believe that many thousands of pubs would be excluded from offering category C machines, and we do not believe that that is the Government's intention. 

The Government have given the industry assurances on a number of occasions that they will preserve the existing right in the case of those who have category C machines with their alcohol licence. The explanatory notes to the legislation, however, state specifically that hotels and restaurants would not be given such a right. Hotel bars currently have the right to gaming machines when they have a full on-licence. Often such bars are open to the public and are in effect pubs. Some pubs, on the other hand, have a heavy food focus and might be regarded more as restaurants.

It might be thought somewhat strange that it would be only premises that have a heavy emphasis on drinking that would be permitted to operate gaming machines. The reason why gaming machines are allowed under those licences is that there is a licensing test for the licensee, who is qualified under the Licensing Act, and there is also a premises licence, which is regulated by the local authorities. Both those licences can be removed in case of a breach of the law or condition attached to the licence.

In effect, the Bill introduces a restriction on the provision of category C machines, for which there is no apparent justification. It would also exclude the application of grandfather rights to those pubs that are not primarily used for the consumption of alcohol. Were such a definition to persist and be applied retrospectively, many pubs would be forced to remove category C machines. The money earned from those machines would be permanently lost for many of those small businesses.

The Bill appears to create a conflict with the definition of licensed premises under the Licensing Act. That Act prohibits the entry of children under the age of 16 where the premises are used exclusively or primarily for the consumption of alcohol. The guidance to the Licensing Act, however, explains that such a limitation

''would not necessarily apply to many restaurants, hotels, cinemas and even many pubs where the main business activity is the consumption of both food and drink.''

Pubs could be forced into a situation whereby the only way to have gaming machines would be to ensure that the premises were used primarily for the consumption of alcohol. That would be a retrograde step, reversing the development over recent years of family-friendly environments and encouraging a return to the enclosed drinking parlours of the past.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

My hon. Friend is setting out an important point. Does he share my concern that the definition of ''primarily'' for the purposes of consuming alcohol will be difficult to enforce and could prove to be a bureaucratic nightmare for many of our local pubs?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

My hon. Friend makes a good point. We had that debate when the Licensing Bill was in Committee. It is clear that the vast majority of our pubs offer food and that that is an important income-generating ingredient. We argued about the problem of those under 18 years old gaining access to the drinking areas of pubs by going to the restaurant, and we arrived at a sensible outcome. This clause throws   that outcome into sharp question. We need clarification from the Government to ensure that this Bill does not act against the interests of an existing Act of Parliament.

The definition would also exclude many hotel bars, cinema and theatre bars, and bowling alleys and similar venues that have full on-licences under the Licensing Act 1964. All those venues hold permits for category C machines, and we have been presented with no argument for their exclusion. The simple amendment would narrow the definition to those premises that serve alcoholic drinks through the use of a bar. It would not exclude existing pubs and bars or hotel bars, but it would retain the restriction that restaurants without a bar would not be entitled to gaming machines.

The Minister and the Government may argue that it would be easy for a restaurant to set up a bar and thereby qualify for category C gaming machines, but the danger of that happening is quite remote. We would argue that many restaurants are primarily for food, that the ambience of such places is not conducive in the main to having gaming machines and that when a bar and a restaurant are combined, very few gaming machines are present.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

I entirely agree with the comments made by the hon. Member for North-East Cambridgeshire (Mr. Moss). I could have regaled the Committee with much of the same commentary, since we obviously have a similar briefing. I could have amplified my comments by referring to those of the all-party leisure group on the matter, and to the equally trenchant comments of the hon. Member for Burton (Mrs. Dean), who made a similar argument to that of the hon. Member for North-East Cambridgeshire. I also could have referred to some commentary from Punch Taverns. All those individuals and organisations are deeply concerned by the language in this legislation.

The point of my rising is, first, to state that I agree with the hon. Gentleman, and secondly, to ask the Minister whether he would address the issue of grandfather rights either in response to this group of amendments or shortly thereafter, as there is an opportunity when we come to some amendments to a later clause. The Minister will be well aware that were he to go down the route that is proposed in the Bill, many pubs that raise their income predominantly through the sale of food and other services would suddenly not be entitled to the machines that they now have. That would be in marked contradiction to the Government's original thinking on the Bill. I refer particularly to a note by the Department on transitional arrangements for grandfather rights. Does the Minister wish to intervene on me for the benefit of the Committee to say whether it is his intention to address the issue now or later? If he is to do so later, I will draw my remarks to a close.

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

The hon. Gentleman has raised this issue on a number of occasions. I can confirm that a policy   statement that confirmed grandfather rights for pubs was published in February 2004 by my Department. It reads:

''Premises licensed for the consumption of alcohol under the Licensing Act 2003 should be entitled to continue to operate as many Category C or D gaming machines as are already authorised under those licences . . . If they wish to apply for more then they may do so''.

We will come to the point about grandfather rights later on.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

There are two ways of interpreting what the Minister just said. If he is assuring me that we will discuss the issue of grandfather rights in more detail later, I am more than happy to draw to a close my remarks on the amendment that stands in my name and on others in the group. I merely say, as I began, that I entirely support the comments made by the hon. Member for North-East Cambridgeshire.

Photo of Eric Illsley Eric Illsley Labour, Barnsley Central

I want to say a few words on the amendments in my name, which are designed to achieve exactly the same thing as those to which the hon. Member for North-East Cambridgeshire spoke.

There is concern in the licensing industry at the prospect of a different definition for premises serving alcohol under the Bill from that in the Licensing Act. There is a concern that certain pub premises that generate a lot of income from serving food could be excluded from the terms of the Bill. So, I ask my right hon. Friend the Minister to reconsider the definitions of licensed premises in order to clear up some of that confusion, and to give assurances to the licensing trade that pubs that serve food will not have to revert simply to selling alcohol to come under the provisions of the Bill.

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

I support what has been said by all hon. Members who have spoken and, of course, in particular what was said by my hon. Friend the Member for North-East Cambridgeshire.

On the subject of the need for decisions on places that serve food to be made in the legislation as it approaches its final form, the Government need to take seriously one other issue: the supply of machines by unauthorised, rogue operators. The Minister and those who advise him may well be aware that that issue has been raised by a number of legitimate operators in the most recent edition of the British Amusement Catering Trades Association magazine, Coin Slot International, to which the hon. Member for Bath (Mr. Foster) has referred.

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

I agree with the hon. Gentleman that it is a great magazine.

I have worked with BACTA on a voluntary basis for many years and I always take seriously what is said by the legitimate part of the business of supplying amusement machines, particularly when it points out that there are difficulties with rogue operators. In addition to the points raised by the British Beer and Pub Association, by other people and by hon.   Members this morning, I want the Minister to address briefly the care with which the Bill will deal with rogue suppliers, particularly in the pub trade.

There is a letter in the latest edition of Coin Slot International about amusement-with-prizes machines. It says that many legitimate operators have been forced to remove their machines because they cannot compete with rogue operators. The letter writer, Mr. Berg from Vendomat, talks about rogue operators who do not pay customs and excise duty, income tax, VAT or trading standards and Gaming Board licence fees. It is clear that there is a thriving trade in the improper supply of machines, and there is a worry among BACTA members that responsible traders will be driven out of business. There is a legitimate concern about pubs and hotels and even taxi firms, fish and chip shops, kebab shops and other places that serve food. I hope that the Government are considering the matter and that the Minister will be able to touch on it.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire 9:45 am, 14th December 2004

I, too, endorse the remarks of my hon. Friend the Member for North-East Cambridgeshire. I wish to emphasise one small point, and I hope that the Minister will accept our arguments.

Pubs are commercial operations. If they do not make a profit, the game is over. I am concerned that pub operators who want gaming machines will install them to the detriment of the positive, family-friendly atmosphere that has been built up through various changes over the years. Allowing gaming machines only in public houses that are primarily for the consumption of alcohol may drive us back to the enclosed drinking parlours of the past. I certainly would not want that. The family atmosphere that has been created over the years is a positive step forward and should be encouraged.

On the amendments of the hon. Member for Barnsley, Central (Mr. Illsley), I am with him all the way. If he wants to put them to a vote, I shall support him, and I would like him to know that before he makes any decisions.

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

The point about the use of the word ''primarily'' has obviously excited the mob, and that is right.

We included the test of primary use to rule out the proliferation of gaming machines in every licensed restaurant. I believe that everyone agrees with the need to do that. As matters stand, however, people could probably drive a horse and cart through the provision, if they so wished, and I accept that we may have gone a little too far and created problems for premises that are more on the pub or bar side of the line, even though they may do more business selling products other than alcohol. We are trying to get the balance right, and we do take on board the considerable number of comments that have been made, including those from the trade itself. 

Amendment No. 368 is on the right lines, but I cannot advise the Committee to accept it. It reflects useful discussions that the Department has been having with the pub trade, but it needs further consideration to ensure that we have a clear and practicable test. I can assure the Committee that the Government intend to table further amendments to enable gastro-pubs and family-friendly establishments, including hotel bars, to continue to offer category C gaming machines.

I will not be defending clause 263 as it is drafted; the Government will table amendments to reflect the view of the Committee.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

I may have momentarily misheard the Minister, but I think that he referred to gastro-pubs. It is early in the morning, so this may be an indelicate subject, but will he clarify what he means by ''gastro-pubs''?

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

I go to a gastro-pub with my grandchildren. About 10 or 15 years ago, we would probably never have taken young children into a pub. My family can now go into Derbyshire—my wife is teetotal, by the way—and take my two grandchildren into a nice pub, which is what I would call a gastro-pub.

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

I know that people in Colchester have a little difficulty in grasping such northern terms. The term refers to the cuisine that is available in what the hon. Gentleman would have traditionally called a pub. They are now called gastro-pubs—that is a saying from Yorkshire. I would describe the menus that are provided in gastro-pubs, but that would be taking matters a little too far.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

The hon. Member for Hertford and Stortford (Mr. Prisk) and I were discussing whether we heard the Minister correctly, and the Committee is grateful for confirmation that we did. However, he was asked to define a gastro-pub, and has done it solely by reference to the institution that he visits—very admirably—with his grandchildren and his wife. If that is to be the model definition for all time, perhaps he would be good enough to give us a few more details about that establishment.

Photo of Eric Illsley Eric Illsley Labour, Barnsley Central

This is an interesting debate. I refer the Minister to an article that appeared in The Guardian Review magazine a few months ago, which was devoted entirely to gastro-pubs throughout the country. It gave examples from my region, from London and elsewhere. The best definition of ''gastro-pub'' that I can provide is a pub that provides food of such quality that people will attend merely for the quality of the cuisine, rather than because it is a place where they can drink alcohol. Examples from my neck of the woods would be The Kaye Arms and The Three Acres, both of which featured earlier on.  

Photo of Roger Gale Roger Gale Conservative, North Thanet

Order. Before we ramble around the hostelries of northern England and their menus, it might be helpful if I were to make it plain that although I am quite prepared to permit such a fascinating discussion, I shall not be minded to permit a stand part debate.

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

With that advice, and a dark look from the Whips, I shall get back to the script.

Amendment No. 349 would return to the clause to the form that it took when the draft Bill was published and would mean that any premises licensed for supplying alcohol for immediate consumption would be entitled to install two category C gaming machines and to offer bingo with low stakes and low prizes. As a result of comments on the draft Bill we decided that it would not be satisfactory to leave the clause in that form because it would extend machine entitlements far beyond the pubs and bars which now have them. It would have meant, for example, that a restaurant with a licence to supply alcohol became entitled to install gaming machines. There is no justification for any such large increase in what the Budd report called ''ambient gambling''.

However, in introducing paragraph (b), which the amendment would remove, we somewhat overshot the mark. Our intention was to make sure that pubs, bars and certain other licensed premises, such as ten-pin bowling alleys, were able to keep their current entitlement to install gaming machines, but that restaurants and other licensed premises did not acquire new entitlements. We acknowledge, however, that the test in paragraph (b) has caused concern to the legitimate pub trade, because some premises which are indisputably pubs may no longer satisfy the primary purpose requirement in the paragraph.

We have, therefore, undertaken to consider amending the paragraph to address those concerns. It would not be right simply to delete it. It would not be consistent with the policy of taking category D machines out of takeaways, such as fish and chip shops, to confer new rights to install category C machines on restaurants which had a licence and also provided takeaways.

I hope that, in light of that explanation and those assurances, the hon. Member for North-East Cambridgeshire will withdraw his amendment.

Amendments Nos. 388 and 389 have the same general purpose as the amendments already discussed, and I hope that my hon. Friend the Member for Barnsley, Central will also accept the assurances that I have offered to the Committee.

The hon. Member for Bath (Mr. Foster) spoke of the threat of illegal gaming machines. That threat has led us to grant the gambling commission robust powers of regulation, including the power to initiate prosecutions. Those are new powers, which show that we take the threat of illegal machines very seriously. On the question of grandfather rights, we will use the powers in schedule 15 to ensure that all premises that are authorised to provide gaming machines will be permitted to provide the same number of gaming machines under the new regime. If they want more, they will have to apply for them. 

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

When the Minister says that premises will be entitled to have the same number of machines as before, is he referring to their entitlement—that is, two? If they already have four, will they be able to keep the four without having to apply for two more?

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

Absolutely. There is no minimum threshold at the moment. We are introducing a minimum threshold in the Bill. The grandfather right applies to the status quo before the Bill is enacted. If premises already have four machines, they can keep four.

With that explanation of grandfather rights, illegal gaming machines and the amendments, I hope that the hon. Member for North-East Cambridgeshire will withdraw his amendment.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

We are grateful to the Minister for his comments and assurances, but he has not answered our question and explained why the wording of our amendment is inadequate. He dismissed the amendment and said that the Government will return with their own amendments, but he did not say when, and it would be helpful to know that. If my proposed wording is so unacceptable, why was the Minister unable to say what wording the Government would find acceptable? I would like him to give a stronger assurance on the spirit of my amendment and the logic of my argument, which is to make it crystal clear that pubs that serve food as well as drinks will not be penalised in any way, shape or form by admitting children to premises where category C gaming machines are being played.

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

I can give that assurance. We have not yet suggested a wording because we have been discussing the matter with the trade. We are accused if we do not discuss concerns with the trade and we are accused if we do. As I said, we have been having those discussions. Our debate has showed that the interpretation of the word ''primarily'' is important in this context and we want to get that right. I admit that we may have gone too far in paragraph (b). We want to make sure that the wording is right for the intention as well as for the action, and we want to ensure that some takeaways that have a bar do not gain an entitlement to have category C machines. There are matters that need further exploration, and we will reflect on the wording when we have discussed those with the trade. I have given a clear assurance to the hon. Gentleman that the description of the pub that he talked about will not be ruled out of having category C machines. Our intention is to maintain that entitlement, and we have no intention of affecting that.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I am grateful for the Minister's clarification and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 263 ordered to stand part of the Bill.