The Committee was very boisterous this morning in your absence, Mr. Gale, and I hope that you will keep it in good order this afternoon.
I would like to conclude my earlier comments, because the Government have come forward with the most extraordinary changes to a piece of legislation that, although long in gestation, has changed on an almost daily basis in Committee. Many Members made very good points that will need answering. Given that there have been such changes, I ask the Minister to think again, because there is a clearer way forward. Now that the Government have admitted that the dreadful problem of problem gambling may be unleashed as a result of the new regional casinos and the impact that they might have on other casinos—a problem that they had not previously accepted—it is time to think again and put together a Bill that is much more modest in its changes to our gaming laws, creating one or two Las Vegas-style casinos.
We could see what impact such casinos would have. If we find that they are popular and make a great contribution to the local community, but we would not want them to proliferate and find that there was a real reason why the Americans have destination rather than regional casinos, we may want to stick to just one or perhaps two areas in the UK where that kind of gaming is available. That would be a much more reassuring way forward, because some of the eight, 16 or 24 casinos will be in city centres. That is not the right place for such activity.
If the Minister were to go forward along the lines that I have suggested, all the other problems raised by members of the Committee would be much more straightforward to answer. There would be no planning process problems nor any potential litigation. The intentions behind the measure could be much more clearly stated in the Bill, it would be much easier for the casinos to understand what they were bidding for and those local authorities that wished to have a destination resort could put their hands up and say, ''OK, come and have a look at me.'' When all the casinos had put in their bids, the Government or the new quango that they want to introduce could decide who offers the best deal for the local community and the wider interests of the UK.
That seems to be a much simpler way forward. It would reassure many hon. Members who are still nervous about what is being unleashed by this Bill, and it would dig the Minister out of the hole that he continues to find himself in. On that note, I leave it for others to make further points.
On a point of order, Mr. Gale. You are an experienced Chairman, and no doubt you have come across this unusual circumstance many times before. However, for me, this is the first time in 28 years in Committee that we have gone into the quasi limbo-land that is constituted by this debate on a Government statement. My point of order is directed at the Government Whip. He has moved that further consideration be adjourned, but do we know when we are going to come back? Are we going to come back this afternoon? What about the Committee members who are not present? Will they be notified about when we come back? It really is a most peculiar and unsatisfactory state of affairs.
I started out as an enthusiast for the Bill because I thought that liberalisation of the archaic gambling laws in this country was long overdue and because of the welcome provisions on tightening protection for children and on internet gambling. As a former chairman of development, I could also see the benefits that the new casinos could have in that regard. In my past life, the entertainment industry played a key role in regenerating areas of the city in which I was a councillor. That was important.
We heard an interesting speech this morning from the hon. Member for Bromsgrove (Miss Kirkbride), the tail end of which was this afternoon. She referred to the Bill as a dog's dinner. I agree that that is what we are now getting. I have a lot of time and respect for the Minister, whom I have known for many years, but he is being asked to put something through the Committee and the House that will not get through in its current form. I cannot understand why that should be so.
On many of the issues, apart from that of casinos, there is a degree of agreement on both sides of the House. The issue that rightly concerned hon. Members was that of regional casinos, and I would have left it to the existing planning rules to sort that issue out. A cap was brought in at eight, which went a long way towards alleviating fears among both Government and Opposition Members. I accepted that as a possible way forward.
I cannot understand why a cap has now been brought in for large and small casinos. Where has the pressure for that come from? During lunch, I tried to get to the bottom of the issue. I understand that the special adviser from the Department, who knows a lot more than mere politicians, argued that there was internal pressure from the parliamentary Labour party, which was concerned about the issue. I know that such individuals are far more in tune with what goes on in the PLP than I am as a member of it, but I did a straw poll at lunchtime. I sought out six parliamentary colleagues who were opposed to the Bill on Second Reading and asked them whether they were concerned about large and small casinos. Not one of them was concerned about them. They were quite happy with the limit of eight regional casinos. I asked whether they were aware that the new limit had been put forward this morning, and they were not.
I ask, again, where the sudden concern has arisen from, because the PLP is not concerned about large and small casinos. I also ask why the limit was set at eight. The same question could be asked about regional casinos.
Before my hon. Friend moves on to that question, I suggest to him that there are two reasons to be concerned about the proliferation of large and small casinos. First, I have had representation from amusement arcades, and people who run other gaming facilities in seaside towns. They see the proliferation of small and large casinos as having a real impact on their viability even though the family entertainment centres take children and casinos will not. Nevertheless, those establishments believe that the number of adults who come in will be affected.
Secondly, there is the issue of those amusement centres that are considering becoming casinos. Again, they will be lost. There is real concern that proliferation of small and large casinos would have an impact on amusement arcades in seaside towns, as well as impacting on the clientele of regional centres if there is an adjoining large casino in the nearby town.
I am grateful for that intervention, but I know that my hon. Friend supports the Bill and I am not sure that the Government Whips are concerned about her not voting for it. However, I cannot accept her point because towns such as Blackpool already have the necessary planning powers to stop development. Why have an artificial cap as we have here?
I keep asking, ''Why eight?''. I am told that it is convenient to have eight regional casinos. One could argue that we do not want 10 because that might put more pressure on getting regional casinos going. That is absolute nonsense and when the Bill returns to the Floor of the House, it will re-open a debate that I thought we had put to bed. If there is one thing I cannot stand, it is political ineptness, and this situation is a good example of it. It is unfortunate that we are getting a reputation for increasing ineptness.
I am listening with great interest to the hon. Gentleman's helpful contribution to the debate. He asked why there are eight. If one adds the three eights together, they make 24. The Prime Minister made a statement saying that there would be between 20 and 40 new casinos. Does he think that has anything to do with the number chosen?
I think that the hon. Gentleman is giving credit to my right hon. Friend the Prime Minister in assuming that the matter is on his radar screen. I do not think it has been during the past few hours and days. It is quite clear that the market will decide the issue. Local councils will take a decision on casinos by means of planning legislation.
As a former chair of development on Newcastle city council, I know that there is always a development fad that comes along. A few years ago it was supermarkets, then it was multiplex cinemas. At one time, no fewer than six multiplex cinemas had submitted applications to Newcastle city council. Everyone knew that there was not enough room for six multiplex cinemas. How many did we end up with? One—because the market could only sustain one.
I would argue the same thing in relation to the large and small casinos; I do not accept the idea that putting a cap on their number will somehow help the situation. I also do not accept the argument that we will end up with a large or small casino on every street corner. The market will find the right level. If we want to ensure tighter development of large and small casinos, it can be done through the councils' current planning processes and land ownership. Opening this can of worms again has been a big mistake.
I am very concerned about the advisory panel. My party is getting into a situation in which, if it wants to shy away from a tough political decision, it sets up an advisory panel, says that it is independent and that it will take the decision. I am sorry but I am an old-fashioned politician and I believe that politicians should take those decisions—either national politicians here or local politicians at a local level. I do not accept the idea of giving the decision to yet another quango. That ducks the real issues.
I have been listening to the hon. Gentleman elaborate on his point. Is he concerned about what the Minister read to us at the beginning of the debate? He said:
''Regional Planning Bodies as part of their revision of Regional Spatial Strategies will need to consider possible broad locations for Regional casinos within their region.''
The document goes on to say that they will have to follow national planning policy guidance. I am sure that the hon. Gentleman's expertise in this field will help us, so will he tell us whether he shares my interpretation that that means those revised regional spatial studies will have to be consulted on a second time even though that was required of them in their original form? Does he concur?
Possibly I do, and I want to deal with that point now. What is the relationship between the advisory body and the local planning authority? That is certainly not clear in what has been put before us today. Point 16 states:
''Operators will be required to apply for planning permission''— that is self-evident—
''in the usual way and all applications will be considered on their merits in line with national and local planning policies.''
No reference is made to gambling, or the horrors of gambling, which the new body will cover. It continues:
''Applications may come forward at any stage. Decisions on whether they should be called in for decision by the First Secretary of State will be made in light of the Government's call-in policy and the particular circumstances of the case.''
The law currently exists to limit development, whether at a local or national level, so I do not know why on earth the body needs to be set up.
I am also perplexed by point 22, which also attempts to define the difference between planning and the so-called licensing system that the new body will cover. It states:
''The premises licensing process and the planning consent process will need to be conducted taking account of the need to clearly separate the licensing and planning functions.''
''The fact that an applicant's proposal may be the preferred option in the competition will not guarantee planning permission.''
I am sorry, but which developer in their own right is going to enter a competition if there is no sign of getting planning permission? It is nonsense.
Just to add to the hon. Gentleman's analysis of the situation, does he not find it slightly odd that the sequence of events is that the competition will be in respect of the premises licence? However, before a person gets a premises licence, they have to get planning permission and, in that context, the assumption is that they might get a premises licence afterwards.
Quite. That is why the relationship between planning and the so-called body is not clear.
I cannot work out what the defined areas will be. How big will they be and where will they be? Clearly, if we are going to try to encourage regeneration, they should be in areas such as run-down inner-city centres. That is a planning issue. It has nothing to do with gaming. From my experience of developers, they do not like sites like that. They want clean, greenfield sites because they are easier, cheaper and more profitable to develop. Whoever decides where those sites are going to be will be popular because people will track their decisions and deliberations carefully. Clearly, if someone owns land in those areas, they will find that it is potentially very profitable.
The other issue, which my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) addressed this morning, is the review period. If we get the first large or small casino in 2008, what time period will there be for the review of that casino and its impact? All developers would need to be given a starting-gun date by which everyone must have their planning applications in, their approved sites and their operators licence. Then we would have to fire the gun and they would all have to start building at the same time and open at the same time. That would mean that, at some time in the future, we could say, ''Right, we will now review what has happened,'' but that is not how development works. Some developments fall behind time, and the casinos could open over 10 years.
The idea that there will be a realistic assessment of the way in which those casinos have affected gambling in an area is nonsense. That is not going to be done, and so we have a cap that provides local monopolies to a lot of suppliers. I have always been against public or private monopolies, and I certainly think that this move will create them.
It is what I think and I am more than happy to say it. The hon. Member for North Durham (Mr. Jones) is on to an extremely good point. The document does not say—perhaps this will not be specified when we get the amendments either—on what sample the gambling commission will arrive at its wonderful conclusion that there is no problem gambling going on and that therefore there can be further development. On the time scale that is being talked about, if the Government insist that there is a sample of eight or even 16 new casinos, that will add on years before any valid judgment can be made.
I agree. The point is that the Bill was supposed to be a liberalising measure. It is actually going in completely the opposite direction. Even in the permitted areas where casinos have opened, what has happened to assess the effect of gambling? Nothing at all. I do not think that the effect that gambling will have in an area is as clear cut as whoever has drafted the Bill thinks it is.
Another point, which I think my hon. Friend the Member for Blackpool, North and Fleetwood mentioned this morning, is that, unless we adapt a national framework to the planning guidance, this will not work. Councils will get themselves in all sorts of legal problems. This morning, someone said—I cannot remember who—that councils have the right to refuse. They do, but what happens if they want a casino in their area and they grant planning permission? Different councils could grant an array of planning applications but, because of the artificial cap, they will not be able to have the casino.
I know of one city in the north-east, for example, where three or four applications are coming forward. Will they back off and say, ''We'll wait and see what happens''? I do not think that they will. They will put planning applications in. The council will be in the invidious position of having to judge them on the basis of what is coming forward. The measure is a minefield. The only people who will benefit will be the planning lawyers, who will have a field day.
I am a supporter of the Bill; it is a good thing. However, we are kicking it into the long grass. That would be fatal to some of the good things in the Bill and to the cities and towns that need development. I hope that the two caps have not been introduced because the new regional casino people, for example, the Americans who want to come in, have said that they will be affected by the competition. If that is the motive, the only people who will lose out will be those in the casino industry in this country, which, up until now, has run a good, clean and decent ship.
It is a pleasure to follow the hon. Gentleman. It was interesting that he was able over lunch to talk with a sample of six Labour Members—I think that he said that they were Labour Members who voted against or had concerns about the Bill on Second Reading. I am sure that more than six are in the Tea Room at any given time over lunch. However, we have heard on the grapevine that one of the reasons that the Government have come forward with the proposals is the groundswell of opposition on the Labour Back Benches.
If the hon. Gentleman is speaking for his colleagues on the Back Benches, he ought to take us a little further. Before the amendments are even thought of or printed, he ought to whip round more than six and present the case to the Minister to say that there is not massive opposition to capping large and small casino levels. There was opposition at the top end and the regional level, which was shared with us, but I do not think that the Government need to go down the road of capping both the large and the small.
The hon. Gentleman talked about kicking the Bill into the long grass. I thought over lunch that this is a bit like a game of rugby. We all know what it is to kick into touch but the ball of the casinos has been punted over the south stand at Twickenham and we cannot now find it. We do not know where we will go from here. The casino industry is apoplectic after seeing what has been produced. It has spent four years in detailed consultation with officials in the Department, the Gaming Board, Ministers and the scrutiny Committee. It has spent a lot of money and time giving evidence and writing documents, and it thought that there was consensus on the way forward.
On the Conservative side, there was genuine support for the majority of the findings of the scrutiny Committee. Indeed, the Government, in response, agreed with 90-odd per cent. of those findings. The key area where there was a big question mark was regional casinos. That was the one area that caused considerable concern. The reason is simple. It has been mentioned on more than one occasion in this debate. We were introducing category A machines, which hitherto had not been seen in this country. They were the new ingredient, and we were allowing not just 20 but 1,250 in casinos.
Having served on the scrutiny Committee from time to time—[Interruption.] I thought that I would get that in first.
Obviously, this proposal would have completely changed our views on the matter. It would be useful if the hon. Gentleman suggested from the Front Bench that the scrutiny Committee be reassembled in order to consider it.
That is an extremely interesting idea. The scrutiny Committee reconvened to consider the regional casinos—or destination leisure casinos, as they are called. I do not know whether such a suggestion would carry more weight if it came from me. The hon. Gentleman makes an extremely valid point, but there is not a great deal of time. I believe that, when all this began, most people were genuinely interested in getting the Bill on to the statute book before the general election, which we all expect some time in the spring. That means that the other place has limited time to consider the Bill.
The worst way to make legislation is by giving ourselves an artificial timetable. There are big implications to consider. What is the point of hastening to get it wrong? It would be better to delay the thing in order to get it right. We all know of examples of legislation that was made on the hoof and had to be changed. Why bother about the general election? Why not just say that we are going to get the Bill right and give it as much time as it needs?
Just because the hon. Gentleman is not standing in the next general election, it does not mean that it will not exercise the mind of many of us in the interim. I do not wish to argue with him, as we are not on opposite sides of the fence. We want to make decent legislation.
At the beginning of the process, there were the bare bones of a good Bill, which most of us accepted needed to be tweaked and modernised for all sorts of obvious reasons. However, it contained the casino element, which has gone completely off the rails.
The industry is up in arms. Until these pieces of paper appeared and the Minister made an announcement this morning, it did not know what was contained in the proposals. It has not been consulted at all during the many weeks since the scrutiny Committee published its last document. It is completely in the dark as to where the proposals have come from or where they will leave it. It sees the proposals as a direct attack on the commercial interests of a section of British industry that until now has paid its taxes and caused no problems whatsoever, whether measured in terms of social responsibility or problem gambling.
This squeaky-clean industry was working under outdated laws in the Gaming Act 1968. People in the industry welcomed change and wanted a level playing field. We now have a complete mismatch, which is totally illogical, and the commercial interests of those people are now severely dented.
Not only is the industry being told that there will be only eight large and eight small casinos, but the document states—I came across this over lunch, when I was reading it thoroughly again—that existing casinos will be told that they can have only 10 machines, which is the same number they currently have. All the work that the scrutiny Committee did on the ratio of gaming machines to tables—two per table for small casinos and five per table for large ones—does not apply to existing casinos. They have to stay as they are.
There will be eight new large casinos and eight new small ones. Although the Minister did not confirm this, I assume that the gaming machine to table ratio will apply to them. There will also be eight regionals. A whole new industry is being set up. At one end there will be category A machines, which no one else can have, and 16 new casinos with more gaming machines per table than the existing casinos will be allowed. Who on earth thought this up? Where is the level playing field? The proposal is an attack on British industry, and on people who have invested in the status quo for many years. They are being told that there is a whole new regime. Of course, the Government are assuming that someone will come forward and invest in small casinos. The people to whom I talk say, ''Forget it.'' The economic return will not lead to the development of new small casinos, even with the square footage required under the arrangements.
I propose a pilot scheme for regional casinos. I have not tabled an amendment that says large and small casinos must be capped. I am not in favour of a cap. I am in favour of ensuring that there is no proliferation, but that is a completely different question. There is a million miles between proliferation and castration.
Yes, perhaps I should not have used that word. Reduction is a better word. The proposals not only reduce the potential for the existing industry, because they set up others in competition with more beneficial arrangements, but they stop in their tracks the development proposals that many had in train. Proliferation may be okay, but it is clear that these people are not stupid. Why do we assume that they cannot run commercial interests. Why do we assume that they will suddenly come forward with millions and millions of pounds to build casinos that no one wants to go into? Why do we not stop and ask that question? These people are commercially successful. They are not stupid.
Were what the hon. Gentleman said a few minutes ago to be the end of the matter, I would share his concern about the existing casinos but has he not read paragraph 25? It says:
''A company operating a casino which already had a licence under the 1968 Act may apply for a Regional, Large or Small casino premises licence. If it is awarded one of them for an existing casino, then it will be able to operate it with all the new entitlements authorised by the new licence''
Does he not interpret that as meaning that, if the casinos get the new licence for the existing premises, they will be able to have the increased number of machines? He said that they would not be able to do so.
I saw that as well. We are talking about only eight small and eight large casinos. As I understand it, the 134 existing casinos could apply—
Mr. Caborn indicated assent.
I am right. They could apply for a new licence under the new regime. The existing casino could by making an application transfer itself into a new large casino. Therefore, under the new arrangements, provided that it had the square footage and the ratio of machines to gaming tables, it could move into the new regime.
I am glad that the hon. Gentleman has raised that matter. Does he agree that the existing casinos in some large cities will convert, which will make the figure of eight superfluous?
No, the limit is eight new large casinos and eight new small casinos. There will not be a massive development. The Minister knows what I am talking about. [Interruption.] That is what it means. The Minister nods in assent. We can take it as read that that is what could happen. I do not think for a moment that it will happen.
In a moment. That will not happen because, unless the existing casinos have spare land or can go up several floors, they will not meet the square footage requirements for the new large casino. There will be constraints on site.
Does the hon. Gentleman accept that there may well be locations where that could be achieved? It is no good saying that this is not what it means, because it is what it says. The legislation will have to be very tight, otherwise the smart lawyers and the smart operators will go above the eight; they will try to come in on the back of this. If it does not mean that, the Minister must spell it out clearly in the various clauses.
I am not sure that I agree with the hon. Gentleman. If one has grandfather rights on an existing casino, but then moves to a new casino, meeting all the requirements, one will not retain grandfather rights on the old one. There might not, therefore, be an increase in the total number of casinos if 16 existing casinos decided overnight to become large or small casinos.
I can think of at least one casino in the north-east that has a very large car park and which could easily expand to become a large casino. It would be possible to develop a new, large casino on an existing site, so even though there is a cap of eight, there will not actually be eight new casinos.
I agree. Obviously, if land is available, there is the option to expand. In many cases, however, that expansion possibility will be limited, so, again, a constraint is placed on the commercial market.
The hon. Gentleman is talking about the desire of existing casinos to expand and to apply for licences for small or large casinos. Does he accept, however, that a lot of existing casinos do not want to do that? Some very small casinos occupy a niche market and will want to remain private clubs, satisfying the customer base that they have now. Has he done research to find out how many of the 130-odd existing casinos would in fact want to apply for the new licences and how many want to keep occupying their niche market as private clubs?
That is an extremely useful question, but as we only knew about the provisions at 10.30 this morning, the several people to whom I have a hotline have not yet given me that statistic, so the answer to the hon. Lady's question is that I do not know. I suspect that the industry was looking ahead on the basis of the arrangements that were agreed in the scrutiny Committee; as far as everyone understood from the negotiations and the consultation with the Government, that was the way forward. People were already planning to expand into large or small casinos, and not simply to change the ones that they had.
The arrangements that were agreed as regards the ratio of gaming machines to tables—existing businesses might have asked for more, but they accepted those arrangements as a way forward—have now disappeared for existing businesses. In the past few hours, they will have had to revisit the thinking processes and the plans that the hon. Lady mentioned, because there is a whole new ball game out there. I suspect, as I said earlier, that no one will put money into new small casinos, because given the constraints that now exist on size the market will not exist.
The industry is commercially successful and does sensible, pragmatic research; it will not invest unless it can see a return on its investment. It has done capacity estimates. If one builds a casino, one has to start by working out how many people are likely to come across the threshold. Only a proportion of the population goes to a casino, so one works back from that until one gets to a threshold population of about 100,000 for a large casino. One has only to go round the main towns and cities to work out how many extra casinos using that capacity threshold indicator there could be. Leaving aside the regionals, there could be another 50 casinos, on top of the 134 that we now have. The market will decide whether that happens, but there will not be huge numbers of new casinos, because no one is going to spend £13 million to develop a large casino.
Sitting suspended for a Division in the House.
I shall speed up now so that we can make a little more progress. I have two or three more points to make.
In the early part of the Government's statement today, they reiterated their reasons for moving down this road. I have the list here. They believe that certain regulations are outdated and say:
''The 24-hour rule, the ban on advertising and the permitted areas rule unnecessarily restrict customer choice and discourage investment and economic regeneration.''
I agree with all that. However, the Government are now bringing in permitted areas by a different name: there are to be eight localities for small casinos, eight for large ones and eight for regionals—24 in total. Whatever we call them, they are permitted areas, and the way in which the Government prescribe where casinos will eventually go is no different from the old methodology. I hardly see that as progress.
We seem to be embarking on an extended pilot scheme. [Interruption.] The Minister says, ''Just so.'' We agreed on eight regionals, and the Government extended that to eight large casinos and eight small ones. I suspect that there will not be eight small new ones. In that case, what will the Government do? Will they allow 16 new casinos, whether large or small? I think that many more will proceed on that basis.
What are the large and small casinos going to test? Do we need another pilot scheme for large and small casinos? We do not. The new casinos will not have any machines that are different from those in the current casinos; they will be category B machines. They might have more of them—say five machines per table, so if there are 40 tables, that will be 200—but they will be the same type of machine, the one with a maximum payout of £2,000. So what are the Government testing? I say, nothing. There is nothing that they cannot find out from the existing industry, which has run category B machines for years without any problem. It is a myth that eight new large and eight new small casinos are needed to test out some hypothesis; the test is irrelevant and unnecessary.
On the other hand, if the Government were to say that they would allow category A machines to go into the new casinos on a proportional basis—we tabled an amendment to say that 20 per cent. of those machines ought to be there—that would make some sense. That would be a real pilot scheme, testing out category A machines in northern regional casinos. Just to test out the category B machines in new casinos is a waste of time and money. The hon. Member for North Durham raised the important issue of when the assessment should be made. When will the gambling commission say that it has evidence either way?
The hon. Gentleman was talking about what could be tested. The new small and large casinos will be in a different situation; they will not require 24-hour membership. There has been a lot of debate in this Committee about the possibility of an increase in problem gambling if casinos are located in high streets, in easily accessible areas where people can walk in off the street—ambient gambling. Perhaps it would be useful to have a limited number of small and large casinos to test just that, as well as testing the impact of new casinos on other businesses in their area, especially if they open in seaside towns.
I hear what the hon. Lady says, but my understanding is that the existing casinos will not have the 24-hour rule, so they will not have to have membership. There will be accessibility to existing casinos under the Bill, so with all due respect to the hon. Lady, her point does not apply. We might be testing the fact that a large casino, probably as big as the biggest that we now have, will have several hundred machines. That will certainly bring in more people, but it will not necessarily increase the likelihood of problem gambling.
I repeat my earlier point: the existing casinos can remain as private clubs. Many of those to which I have spoken wish to do that. Therefore, we are talking about something different. Throughout our debates on casinos, the hon. Gentleman has advocated caution. I know that the bulk of his comments concerned regional casinos but does he not acknowledge that there should also be caution regarding the large and small casinos?
Caution, yes; proliferation, no. What are the Government proposing? They are proposing 16 new casinos with category B machines, which are already in existing casinos, so what is new? Will the hon. Lady explain her point? What is new? Nothing, except the possible number of machines in relation to the number of gaming tables. That is the only new ingredient, and it is not worthy of all this fuss—the prescribed hoops to jump through, and the planning measures.
Proliferation can be tackled in different ways. One could argue that when there is a certain level of development in a region, planning measures should be brought to bear to prevent overdevelopment. There are simple ways of dealing with that without going through all these machinations.
Yes, but there is more to consider than the planning issue, which the hon. Gentleman has mentioned more than once, and on which I agree with him. Even if the matter is left to the free market, developers are not going to build these things, which, at a development cost of £30 million for one large casino, are a huge investment, unless they are in a populated area with a threshold population of about 100,000, so there will be limits on investment. If the Government want to control development, they could do it in other ways.
The hon. Gentleman gave us a model of the timing of the assessment—he gave some dates—based on development not starting until 2007. There will be construction costs. The idea that every new casino will be up and running with the starting gun in 2007 is nonsense. The new casinos will be phased in over two or three years, and the gambling commission will have to wait three years before it pronounces, but on what evidence will it pronounce? What will be the sample? Will it be one casino, or 16, or 24? No one is saying. So, on what basis will it advise the Government, ''There is no problem with problem gambling, and we recommend that further development of casinos at various levels can now take place''? If the Government say that they do not think that the gambling commission—
What about the other side of the coin? What if the commission says that there has been an increase in problem gambling? What will it do—close down the casinos?
That is an interesting question. For casinos that are to be developed in that period, there will be plans and planning applications in gestation, and construction on some casinos may have started. If the commission pronounces too early on the grounds that the hon. Gentleman mentioned, what will happen to those investments? It is not clear that the Government have thought that through. That is an excellent point.
The outcome of the assessment is still unclear. If it is unclear to us, it is sure to be unclear to the people in the industry who are supposed to make this investment. Why would they bother when the situation is so uncertain? Why would someone invest £30 million per large casino when they do not know when the Government will pronounce on this matter, what the outcome will be, and whether regional casinos will be able to compete with category A machines? There are so many question marks and uncertainties that I will be surprised if the industry puts its money where the Government expect it to.
Let us not forget that the kind of companies that we are talking about do not just run casinos. Most of them—and there are not many—also run bingo halls and other leisure pursuits. Huge numbers of people in this country play bingo. I was told that in one constituency—a Labour marginal one, but I do not want to underline that—half of the electorate are members of the local bingo club, the owners of which also have casinos. What will such owners do if they are not happy about what is going on?
If the Minister knows that they will do something, that should be fed back to his Back Benchers, because commercial clout will come to bear at the end of the day and there may well be political fall-out. I simply drop that pebble into the pool and let the ripple reach the Government Benches. It may be passed on to certain Labour colleagues in discussions on the subject.
On a final note, the Government have consulted the industry on all this throughout the past four years, and before they print their amendments and run into a lot of flak on their return on 11 January—it is out there waiting to hit them—I urge them to talk to the industry right now, starting tomorrow, to try to work out something sensible, because the way that things are going, this Bill will not reach the statute book.
Much of what we are hearing these days comes to us via a circuitous route. The hon. Gentleman recommends that the industry has a meeting Ministers straight away—tomorrow could not be soon enough—but is he aware of the rumour that Lord McIntosh has summoned the industry for a meeting at 9.15 am tomorrow?
I was aware of a 9.15 am meeting, not with this Minister but another one, but I have now been told that it has been pulled, so I do not know whether the rumour is true. The noble Lord McIntosh is not privy to the proceedings of this Committee, so unless he reads Hansard or listens in, how will he assuage the fears of the industry?
I shall wave to him, in that case. [Interruption.] They are being broadcast on radio, not on television? Sorry, I thought that there was a camera. If there were, I would play to it a little more.
One of the Bill's problems may well be that too many Ministers have been thrown the pass and allowed to run with it for a time, and we have not had the usual continuity of one Minister piloting the Bill all the way through its passage. There are serious problems with it. We share the Government's view that we do not want a proliferation of casinos. Market forces will do something to prevent that. If the Government want to adjust the pace of development, there are mechanisms at their disposal other than the incredibly bureaucratic, regulatory and prescriptive methodology of their statement.
I shall be brief. It is exceptional to have an Adjournment debate in Committee, as we all know. I genuinely consider the Minister to be a very good friend of mine, and I hope that I have not strained our friendship too much during our proceedings. However, anything that I have said has been meant to be helpful to the Government, because I can see the problems coming down the line. The Minister will cop them all, which in many ways is unfair on him. The Bill is a poisoned chalice, and it has got worse as it has passed through Committee. I must tell my right hon. Friend in all humility that the Government would do better to pull the Bill entirely and reconsider it.
These are major developments with enormous implications. [Interruption.] My hon. Friend the Member for Blackpool, North and Fleetwood is demurring, but she, like me, has a particular objective. The worse thing to do is set ourselves artificial timetables, and tell ourselves that we must hasten the Bill through Committee because a general election is on the way, and then we will all be able to repent at leisure. This part is so significant that it should be pulled from the Bill, and if the Scrutiny Committee is not to be reconvened, my very good friend the Minister, his officials and the industry should reconsider it. At the moment, of course, this part of the Bill looks like the worst of all possible worlds, and the support for it is disappearing fast.
We all thought that the number of super-casinos was settled at eight, which is a strange figure. I have heard Opposition Members saying, ''We believe there should be a limit, but we are not going to say what that is.'' It is unfortunate that the Government, having come up with something, then proceed to be heavily criticised because they are trying to answer a point, but not in the way that other Members want it answered. However, no one has told the Minister precisely what the number ought to be. It is easier for those like myself who have said that the market as modified by the planning process should determine the number.
The idea that there will be 150 new large casinos—that is the figure plucked out of the air by the media which has caused the Government to panic—is absolute arrant nonsense. The amount of money involved would mean an investment of about £4.5 billion by the industry, and clearly neither the planning process nor the industry would be prepared to do that. We are tilting at a rather substantial man of straw constructed by the media.
The Government say that they have been listening. That is fine, but others could say that the Government are now panicking. That is why it would be far better, in the interests of the Minister's long-term career, which I hope will be fruitful, and the Government's reputation, to accept that the matter has got slightly out of hand and that it should be reconsidered, particularly as we now have the figure eight applied to large and small casinos.
My hon. Friend the Member for North Durham said everything that I wanted to say about the advisory panel, but of course that will not stop me, as it never stopped any other Member of Parliament, saying it all over again. The panel seems like another layer of bureaucracy. We have not only set another artificial figure, but invented a new body to see how the artificial figure will be arrived at. My God, the panel will need the judgment of Solomon to do that. In the end, it will still report to the Minister with its recommendations, and he can turn them over. Let us foreshorten that process: why does the Minister not make a decision straight away?
I have noticed that so often in government, of whatever party, we do not trust ourselves to take decisions. It is not really surprising that if we do not trust ourselves, the people do not trust us either. We always seem to think that our judgment will be coloured. I have made plenty of mistakes, but I prefer to make my own mistakes than to have them made for me by experts, because it is the experts who in the end get us into all the trouble. They are there to advise, but Ministers are there to decide. In the circumstances, the Minister would be far better off if he took the decisions himself.
The uncertainty in the industry is enormous, and it really is not good enough. These ideas have been going around for years. Decisions have been made, money has been invested and local authorities and football clubs have got together. They thought that they would be able to put together packages that would be acceptable under the Government's previous announcement, and they now find that that has all been thrown to the wind. At some point, someone might say that the number applied to the three categories of casino was a restraint on trade and decide to challenge it in the European Court of Justice.
Mr. Caborn indicated dissent.
The Minister is shaking his head, but I hope that in that area his advice is good, because in some of the others it has not been so. I do not blame him, because we are discussing a highly complex area. In the end, we ought to trust the planning process, the market as modified by the planning process and the good sense of the industry. It is not there to try to exacerbate problem gambling. If the industry were going to abdicate its social responsibility, it would not be as healthy as it is, nor would it have the reputation that it has. The Government ought to have more trust in the ability of the industry to ensure that the market does not get out of hand.
As for problem gambling, quite honestly we are making far, far too much of it. It will be rather too late once the provisions are enacted to find out that there has been an increase in problem gambling. I do not believe that there will be a significant increase, so we should proceed with the original proposals. They were proposed far too long ago for us to go back to them, however. Given that the Minister will, I know, listen to the disquiet among Members on his own Back Benches, he ought to pull this part of the Bill and reconsider it in full.
The hon. Member for West Ham (Mr. Banks) has made an interesting if not powerful case as to why some aspects of the Bill should go back to the drawing board. I congratulate the hon. Member for North Durham on a thoughtful speech, and in particular on the planning aspects of it. He is clearly very knowledgeable about that. I will return to that point briefly in a moment. The hon. Member for Eltham (Clive Efford) again made thoughtful contributions, which I sincerely hope the Minister takes on board.
Although the hon. Member for West Ham virtually dismissed the concept of problem gambling, he echoed the complacency about that issue exhibited in the Minister's statement this morning. The right hon. Gentleman said that Britain had a low level of problem gambling, which, according to the statement, accounted for less than 1 per cent. of the population. Put in those terms, it does not sound like a big problem, but 1 per cent. of the population is between 300,000 and 500,000 people, which is a lot.
Interestingly, the Government announced about three hours ago that they are going to cut the number of soldiers. There are about 100,000 soldiers. So, in one day, we have had Government measures that will reduce the number of soldiers in Her Majesty's armed forces and increase the number of problem gamblers above the current figure of 500,000. That may tell us something about new Labour—they cut the number of soldiers and increase the number of problem gamblers.
I am grateful, Mr. Gale.
In the Minister's statement, reference is made to the assessment of whether the introduction of the new casinos will lead to an increase in problem gambling. Elsewhere the statement makes reference to whether regional, large and small casinos present hitherto untested risks of social harm and to the need for arrangements aimed at minimising the risk of problem gambling following an increase in the number of casinos. So, the Government acknowledge that there is a risk.
The point is that no Government should be taking measures that are likely to increase the risk of a problem—in this case, the problem of problem gambling.
To follow on from the point about what would happen if the assessment is that there has been an increase in problem gambling, I ask whether such an assessment would mean that a licence will not be renewed. It strikes me that we are on a one-way journey. Casinos will be established; the question is then whether the number of casinos remains the same or increases. In the Minister's statement, there was apparently no mechanism that could lead to the number of casinos being reduced if problem gambling was proven to be a direct result of the increased number of casinos.
The hon. Gentleman is looking for risk-free policies. No policy comes risk free; no more than life does. By going out in the morning, we run the risk that something nasty and unpleasant will happen—if not in this place, then somewhere else. Does the hon. Gentleman think that there might be a trade? If there is a slight increase in problem gambling but an enormous increase in regeneration and employment, would he not consider that a fair exchange?
I do not think that any increase in risk is a fair exchange. That argument could be pursued on road safety: if we did away with pedestrian crossings, traffic could move more quickly. That is not a risk that I want to take. An assessment will be made of the impact on problem gambling of the limited number of new casinos. That is what the Minister told us this morning. All I am trying to ascertain from the Minister when he replies is whether we are on a one-way journey, or whether there will be provision not just to hold the number of licences but, if problem gambling is proven to have increased, to retract from the position that has been established.
That is a reasonable question because we then come on to the advisory panel. I am not sure whether the statement that the Minister made was identical to the one that was circulated. Does the Minister remember the following sentence about the advisory panel:
''Clearly, all Panel members must be able to demonstrate independence from any potential interested parties and must have an appreciation of the need for impartiality''?
Can he confirm whether that was in his statement or whether there are two versions?
I realise that time is pressing on, so I return to the planning issues that the hon. Member for North Durham raised, very adequately. Perhaps the Minister or his officials could write to all members of the Committee to clarify the exact situation on section 106 agreements and planning gain. Can the Minister confirm that section 106 agreements, whether for casinos or any other developments, are plan-led, and that the local authority determines what the planning ought to be, not the developer, the licence holder or whoever else? Further, will the Minister confirm that the planning gain does not have to be site-specific and that the local authority will determine both what that planning gain is and where it is located?
In my constituency, we have been keen on attracting a casino for a simple reason. We are a city growth pilot area and as such we saw few ways of attracting private sector investment. Then the prospect of a regional casino arose and a series of our problems began to disappear.
In the last year or so a considerable planning application has been put together through the local authority that involves supermarket retailers, a hotel, an arena, conference facilities, a water park, and a 19,000-seater stadium for our rugby club, the Saints. At the heart of that development was a regional casino. Six weeks ago, for reasons that I can partly understand, all that was turned on its head, although I put aside whether we should have been in that position.
There was already serious competition in the region. The local authority therefore started to consider whether, if we were unlikely to get a regional casino, we should predicate the development on a large casino and build out of that in the hope that if the pilots did not demonstrate a huge growth in problem gambling resulting from regional casinos—I acknowledge the problem, however, particularly in relation to internet gambling—the development could ultimately lead to a regional casino and regeneration, which in St. Helens would mean around 1,500 well paid jobs.
What the Minister has said in conversation with my local authority today has thrown it into complete confusion. The authority is now not sure whether to proceed with the various partners with an application for a regional casino, a large casino or a small casino, bearing in mind that the total number of casinos that might be approved is 24. The cost of proceeding is several millions of pounds so, given the numbers across the country being invited to take part in the competition, we are talking about many tens of millions of pounds of public money at least, as well as private money.
There is very little guidance about how the competition may be framed. People feel that the odds are stacked against them, because there is an assumption that certain places are already well ahead in the game, albeit perhaps for good reasons. Now, my local authority does not know what to do, how to spend its money or how to work with the partners.
My local authority now knows from the Minister's statement that no decision will be made until 2007, which is three years away. Even if St. Helens were fortunate enough and clever enough to have attracted the Minister's eye to succeed in its application, it would then have to put in a planning application. However, because of the complexity of the project that is being put together—it is a city growth scheme; a major regeneration scheme with 1,500 jobs—it will almost certainly be called in by the Secretary of State. Even if it were chosen as one of the eight regional pilots, it probably would not get planning permission until the back end of 2008, and would therefore probably not be constructed until 2010 or 2011. A three-year pilot takes it to 2014.
If it is a genuinely open competition, the Minister must tell us that it is acceptable for pilots not to return their final analysis for 10 years from now; otherwise schemes such as that for St. Helens might just as well not waste their money, let alone their breath, in making an application. It is incumbent on us to give a proper steer on the question, because a lot of money is involved, both public and private.
Critically, in my town, the Saints are involved. The Minister has generously taken an interest in the club's problems, but I remind the Committee that the Saints are an extremely successful rugby team. Unfortunately, because of the state of its ground, it faces huge problems every year with the Health and Safety Executive. Each year, the HSE takes away a number of seats, and the club is losing revenue as a result. It urgently needs to move: it cannot wait 10 years, not least because the HSE will close the ground. The problem with such uncertainty is obviously extremely serious in a town such as St. Helens, because rugby is not just a part of life there; for many people, it is a way of life.
We come back, therefore, to this morning's statement. The Saints are looking for partners—retailers, a casino and others—and the club thought that it had found a way forward. That has been turned on its head. This morning's announcement means that the idea of a large casino may well be turned on its head, although we do not know. The club might be better off tearing up the whole thing and saying, ''We cannot play here any longer because it is not going to work for us. We should go elsewhere.''
I say that because it is important that the Minister, his officials and those advising him realise that much more is at stake than advice about eight small casinos, eight large casinos and eight regional casinos. Huge regeneration projects are genuinely predicated on these matters, and the uncertainty and lack of clarity that has regrettably resulted from this morning's statement—ironically, it was made to clarify matters—has probably left local authorities, clubs such as the Saints and casinos up and down the country far more uncertain than they were first thing this morning.
I hope that the Minister realises that his hon. Friends on the Government Benches genuinely want the Bill to succeed; none of us want the Bill to fail. Opposition Members still will not give a commitment on whether they are in favour of liberalising gambling and whether they will trust the people. I can tell the Minister that St. Helens has debated the matter. Yes, some people in the town are worried about problem gambling, but on balance they would rather trust themselves than have others telling them how to lead their lives.
The consequences of going down this road are extremely detrimental for city growth projects and for projects involving clubs such as the Saints. A 10-year waiting period is pretty unacceptable. It is incumbent on the Government to make realistically clear how the review will work. If it is genuinely open to the panel to advise the Minister on a broad range of options, we could have one pilot reporting in five years' time on whether it was a success, and then have to wait another five years for the next pilot. Having only eight pilots is a pretty unacceptable way of judging things.
I am not trying to curry favour with the Minister, but I ask the Committee not to blame him. He is the fall guy—the patsy—sent in to try to cover up inefficiency, terrible mistakes and the fact that various Government Departments will not and cannot talk to each other in order to put together a coherent policy. He has my sympathy. I recognise that, while he smiles through the pain, his limbs are being quietly torn from him in slow, painful jerks. However, he is the Minister, and he has to take the rough with the smooth. How Lord McIntosh will get on in the House of Lords, I really do not know. He is in for a very rough time.
The statement is a partial step in the right direction. Unfortunately, the way in which certain clauses have been phrased creates more gaps than we had before. You will be delighted to hear, Mr. Gale, that I shall speak in a form of shorthand. This subject could be extended for hours and hours, but I shall be commendably brief.
I wish to take up the point made by my hon. Friend the Member for Bromsgrove on the planning process and costs. The proposals are becoming incredibly bureaucratic and expensive. When the Government devise planning regulations, they seem to do so without any reference to or concern for the cost to people who make planning applications. The hon. Member for North Durham dealt with that point—not so much the cost but the efficiency of the operation—very well.
I draw the Committee's attention to the last sentence in paragraph 22 of the Minister's statement:
''Once planning permission has been granted and the casino has been built, the operator will be able to apply for a full premises licence, which he could expect to obtain provided there has been no material change in the proposals since the competition.''
I ask the Minister whether he would put £150 million, £200 million or £250 million into building a project on the chance that he ''could expect to obtain'' a full premises licence? Any management that did so would want their heads tested. There must be a great deal more certainty in the process than the possibility of getting a licence at the end of it.
My hon. Friend the Member for Bath—I keep calling the hon. Member for Bath (Mr. Foster) my hon. Friend; I can see this partnership developing in time—discussed the lack of clarity on regeneration. The matter was also brought out by the scrutiny Committee. Paragraph 22 of the Government's response to its report states:
''The Committee is concerned that the lack of clarity surrounding regeneration benefits could result in potential regeneration benefits being lost. This is a serious risk which needs to be addressed''.
That is absolutely correct. As the hon. Member for St. Helens, South (Mr. Woodward) just said, regeneration benefits will be vital to saving some areas from continuing run-down. We want a clearer definition of the regeneration benefits.
Again, I echo the call for clear national guidance. The scrutiny Committee acknowledged
''the Government's reluctance to publish national guidance relating specifically to regional/leisure destination casinos''.
The Minister's statement does not provide any clear guidance on the national scene. In fact, it seems to involve a great deal of face-saving. The Government's response to the scrutiny Committee states:
''The Government does not consider that a separate national planning policy statement on casinos is required. However, we are currently finalising PPS6'', and so on. Everything that I have heard from members of this Committee is a call for clear national guidelines. The Minister should take that on board.
My next point is about advisory panels. I am not sure whether they are pushing or pulling, or where the authority will lie. Paragraph 13 of the Minister's statement refers to the regional planning bodies:
''Their proposals will then feed into the recommendations of areas for the initial eight Regional casinos by the Advisory Panel.''
Will their proposals feed in first? If so, the advisory panel will in fact make the decisions. We have heard that the Secretary of State does not want to intervene; he is very selective about calling in applications. As the hon. Member for West Ham said, however, there could be a challenge, which could go much higher up the legal process. Paragraph 9 says:
''the Advisory Panel will be asked to identify areas for the new casinos''.
Which will be paramount—the advisory panel or the regions? We should know.
Does the hon. Gentleman agree that there needs to be some clarity on paragraph 9? It says that the panel will need to ensure
''a good range of types of areas, and . . . a good geographical spread of areas across Britain.''
It then says:
''The Panel will also want to ensure that those areas selected are willing to license a new casino.''
Does he agree that there could be a conflict if the panel thinks certain areas should have a casino in the interests of geographical spread, but local people do not?
I would love to agree with the hon. Gentleman, because I recognise the mischief he is causing, but I do not feel that the issue is a runner, because the advisory panel would be remarkably foolish to start considering areas that have set their face against a new casino. However, there are opportunities for excitement there, too.
How will the advisory panel be made up? I do not know how many British citizens understand how regional casinos work or what fund of knowledge—if that is the right phrase—there is in the Department for Culture, Media and Sport. Does the Department have any advice about how the advisory panel might be brought together? I would like to hear from the Minister about that.
My last point is about this country's hard-pressed casino operators. If we go through with these measures, we shall see the creation of a supply-side monopoly, which will last for a minimum of three years, and more likely for five, six or seven years. I do not know where that will go. Sometimes, existing casinos will be tied in by their existing leases.
Speaking of leases, paragraph 25 states:
''Arrangements will be made to ensure that existing casino businesses can in the future be transferred to new owners and to new premises if the current premises for some reason become unavailable (such as end of lease or fire)''.
My hon. Friend has made exactly the point that I was going to make, so I shall not repeat it, save to say that I am with him heart and soul. Perhaps the Government want to create a new industry of arson. It would then be very convenient and easy to obtain a new lease: just burn the old place down and away we go lads, no problem. Of course, I cannot endorse that, although my hon. Friend has made a proper point, and the rules must be looked at.
I must side with the right-wing Member for West Ham—my political blood brother—and say that I think that the Government should pull the Bill, reconvene the scrutiny Committee, listen to what it has to say and then bring the Bill back. In that way, we can get on and have a sensible Bill that will work.
I want to respond to one or two points that have been raised. I have no doubt that we will have a detailed discussion on the new amendments on 11 January. I remind the Committee that Budd was asked to review gambling because of remote and electronic gambling, which were of real concern to the industry and to the Government. The vast majority of the Bill—about 90 per cent.—deals with those areas. We are now talking about 10 per cent. of the Bill. I want to put it on the record that there is no disagreement about that 90 per cent. We need to deal with the remaining 10 per cent.
I made a statement on 16 November and said that I would come back with more information. I am pleased that I have come back earlier rather than later to ensure that the Committee can discuss the matter. We have had a useful discussion this morning and this afternoon that has addressed some of the issues that will arise as we bring forward the new clauses and amendments. I want to remind the Committee why the Government have brought forward the amendments.
No, let me make some progress.
To a large extent, the scrutiny Committee accepted that we could control proliferation by the triple lock, particularly in terms of the planning regime. On Second Reading, we indicated that there could be use of class orders. They were asked for and we responded to that. However, it was clear that there was still concern, both in the House on Second Reading and in the country, that there was a danger of proliferation. What we put in place and what was recommended to the House was not as robust as many wanted it to be. That was made clear in the House on Second Reading. That is why we made a statement to the Committee on 16 November about the eight regional casinos. However, I also clearly indicated at that time that, if we were dealing with proliferation, there would be consequences for large and small casinos. We said that we would reflect on that and return to the House.
I am bound to say that any business that has started to predicate its investment strategies on a Bill that is going through Parliament—whether it is this Bill or any other—knows that there is an element of risk and chance, because that is the nature of making legislation. Businesses may well make the right decision, but sometimes they will make the wrong one. However, we cannot put legislation on to the statute book based on one or two developers doing certain things. It has been made clear that football clubs, rugby clubs and all sorts of sites up and down the country have been trying to get into pole position. That is right. That is what the free market is about and they can take that opportunity. However, the Bill cannot be predicated on that.
What we are trying to do is manage the change. There was real concern and that manifested itself in all sorts of ways, culminating in the Second Reading debate. We took heed of that. The Secretary of State clearly said that she would consult with a host of people. That has happened. We got the feeling that they wanted to ensure that we brought in further constraints and that is what we have done. Let us be absolutely clear: we are managing change in difficult circumstances. We must reassure people.
This is the first phase. It will be properly evaluated and Parliament will make a decision based on that evaluation. It will not just be somebody from the Government; it will be Parliament. We made that very clear: it will be Parliament, based on a proper evaluation. We are moving into the unknown to some extent, particularly with regional casinos.
Australia is the one example where the market let rip and there was no control over that. I would debate that matter with anyone who wants to see the market go into this area and who believes that the industry there is acting with social responsibility. In Australia, it was a race to the bottom. There were many social implications. It has changed some of the social infrastructure. Those who visited Australia returned saying that they did not want that to happen.
We have taken the cautious route all the way. We thought that we had been cautious enough when we presented the Bill to Parliament. Clearly, we had not. We had to revisit that. That is why today's statement has been made on the back of the statement on 16 November, when I said that we would limit regional casinos to eight. We want that evaluation. It will not simply look at the eight casinos in the regions. A total of 160 casinos will be evaluated: the 136 casinos that are operating now and the 24 new casinos.
Let us be clear: small and large casinos will be different from those with grandfather rights. They will have considerably more gaming machines. Yes, they will be able to have bingo and betting. Yes, they will be much larger than the current casinos. There will be a wide portfolio of casinos ranging from regional casinos to the existing casinos and those that want to remain as small, members' clubs. There will be something like 160 casinos in this country, which will be evaluated. The evaluation will be carried out by the gambling commission. It will present it to Parliament, which will make the decision. That is right and it will reassure people.
I must take issue with the Minister on this spurious figure of 160 casinos taking part in the trial. There has been nothing wrong with the existing casinos. There is no evidence of problem gambling. The Gaming Board monitors that carefully. Why do we need to revisit the existing situation? It is a red herring.
It is not a red herring. It is a fact of life that there will be 160 casinos. Some will have been given greater freedoms to varying degrees relating to grandfather rights, 24-hour opening and advertising. We believe that it is necessary to test that to reassure the public that what we are doing is in their broad interests and will not create major problems through problem gambling. There are real concerns about that. We will have a portfolio of casinos ranging from the large regional casinos to the small and the existing casinos, which will have greater freedoms under the Bill. They will be tested in that evaluation.
Can the Minister give us some guidance on what happens if the investigation shows that there has been an increase in problem gambling? Would some of the licences not be renewed? What will happen if the evidence is that the number of problem gamblers has risen from the current estimate of 500,000?
That is exactly why we have given the powers to the gambling commission. That is why we are changing the way in which we police gambling. As I have said many times, we are taking the best of the Gaming Act 1968 and putting it into a regulatory framework. There will not simply be an evaluation of problem gambling. The gambling commission will be charged with looking at the casinos that are in operation to ensure that problem gambling does not increase. If it does, it has the power to intervene long before a decision is taken to build more casinos. That is an important part of the gambling commission's remit. It can intervene in the licensing arrangement to deal with that part that it believes is creating the problem gambling.
It is not a question of being on a one-way route. We must bring certainty to the marketplace. The evaluation would find out where the problems were that encouraged problem gambling. The gambling commission has the power to intervene selectively in a casino or all the casinos if it believes that something deliberately creates problem gambling. Will it have the power to remove a licence? The answer is no. Once a licence has been given, one cannot start withdrawing it, unless the licensing conditions are broken—that is a different matter. In the case of problem gambling, the answer is no. The investment has been made, we stand by that investment and we believe that the powers given to the gambling commission mean that it will be able to intervene.
This raises an incredible spectre. Let us take the regional casinos; we are talking about £150 million of investment. Is the Minister really saying that if, at the end of a trial period of, say, three or five years, the gambling commission decides that there is enough evidence that there is an increase in problem gambling because of the 1,250 category A machines in such casinos, it will turn round to those casinos and say that it will reduce the numbers to 500 or 600? The whole economic financial basis of that investment will be completely destroyed, and no one will go ahead if that is a possibility.
That is exactly why we are doing what we are doing. We are taking a prudent and cautious approach. It is in the interests of the investor as well as of the population that we approach the matter cautiously. The gambling commission and the powers that we will give it mean that such a scenario should not arise. The cautious and incremental approach, and ensuring that the regulation operates, means that we will not find ourselves in such a scenario.
I want to go through a number of the questions raised. A lot of them will be answered and debated further when we bring back the amendments. There is a meeting with representatives tomorrow morning. British and overseas interests will be presented.
We need to test the small and large casinos because they have eight to 15 times the number of gaming machines. They can also provide betting and, in the case of the large casinos, bingo. They represent a new form of casino gambling with a combination of products on a much larger scale than we have now. That is why we want to make sure that they are tested as well.
The hon. Member for Bath asked about proceeding on a legal basis. Yes, we believe that we have a sound legal basis to proceed. He asked about guidance on regeneration and the advisory panel. Yes, the panel will be advising on regeneration, along with the other issues that I raised. The last point that he raised was about the premises licence; it was this morning, so he has probably even forgotten himself.
Regeneration will come from both the planning obligation and the premises licence. The Bill will give local authorities the power to conduct competitions and with that they will be able to ensure that they get planning gain on section 106 agreements. The premises licence will allow them to go beyond the scope of planning permission under section 106.
So we have a scenario of a competition in a local authority area between two operators bidding for the same location. Which will win: the one that bids the highest on the section 106 agreement or the one that wins the competition on some other basis? How will the council decide on that? It is a minefield.
Anyone would think from the debate that councils are a bit naive and that such planning applications will be the first major developments that they have had to deal with. Quite honestly, there are some skilled operators inside local government. There are constraints on section 106 and planning gain, as we all know, but the local authority giving the planning permission will weigh that up and deal with it. We want to ensure that the competition is transparent and not open to legal challenge. That is why I said in my statement that we will be sitting down with the Local Government Association to work out what advice to give to local authorities. We have made it very clear that the planning process has integrity and that it must be maintained. On the other hand, there is a premises licence, through which further advantages for a particular area can be negotiated. So, there are two opportunities for a local authority to negotiate gain from such development.
That must be put into the context of the work of the gambling commission, which will give out the licence. As well as setting out the normal licensing conditions laid out in the Bill, it will have a clear position on social responsibility. That is absolutely paramount, which is why we are doing what we are doing. We want to ensure that social responsibility is the first criterion, which is why we are running this type of piloting development.
The Minister is giving some helpful information. For my own clarification, the Minister said that when the competition takes place any developer involved will be expected to talk about the regenerative benefits of their scheme in relation to both the premises licence and the planning application. I assume, therefore, that the Minister envisages that the total package will be presented at the competition stage, when the gain from planning and from the premises licence application will be put together.
That is right. A premises licence will not be granted until the end of the process because the authority must ensure that the applicant has delivered on the agreement about the premises. If all three stages were agreed at once, the authority would have no control. An operator gets a licence to operate from the commission, which takes into account social responsibility. At the same time, based on the given criteria, the panel will recommend the 24 areas, which will be spread throughout the UK because Scotland and Wales will also be involved. When that has been agreed and the licences have been granted, the licensees will be able to apply to operate in those areas determined by the panel—once they have been accepted by the Secretary of State. The licensees then negotiate for planning permission, and section 106 comes into play. The granting of a premises licence, which is negotiated with the local authority, is the last thing put in place. As long as the licensee has complied with all the conditions set out at the beginning of the negotiation, it will receive a premises licence.
The key thing about the Bill is increasing the powers of regeneration. I found from experience in local government that control over land—planning permission—was very important. What the Minister has suggested will give an awful lot of power to a developer or operator with a licence. It will go round an area with a cheque that will be very attractive to many local authorities. The planning gain that authorities will get out of any deal will be quite small because they will be fighting over one operator. My right hon. Friend is giving developers an open chequebook.
It will not work like that. Let us say that 20 companies want a licence to operate in the UK and get one, and the sites have been selected by the panel and the Secretary of State. Any one of those companies can go to one of the local authority areas that has been selected—for a regional, large or small casino—and say, ''We want to offer X,Y and Z.'' One area could probably have three or four operators applying. I cannot believe that any of those 20 operators with licences would not try to get one of the 24 sites.
It depends on the site. Will it be a small geographical area in a city, a city or a city region? If it is the latter, there will be competition between different authorities, and the bargaining ability of those local authorities in the face of operators with very attractive licences will, frankly, be zilch.
We are talking about the local authority's licensing area. Let us take Sunderland as an example. Its licensing authority may determine according to all the criteria that Sunderland ought to have a regional casino. It would then be up to Sunderland to determine through its planning process where it wants the casino to be. Bids will be made; any operator who has a licence may decide that it wants that site in Sunderland. It will want planning permission, and then it will have a premises licence. That is no different.
But that is taking away the local authority's key bargaining chip, which is control over the site and planning. That is the only way to control such matters in my experience. The last development that I was involved with led to £23 million in planning gain, because the developer wanted a site. What is proposed will produce competition between different cities and councils for those who are holding very lucrative licences. Therefore, a site's natural gain at local level will no longer exist.
It is absolutely contrary to that. Had the previous situation arisen, that would have been the case. Eight areas will get permission to run regional casinos. There are 20 operators, any of which can go to one of those eight areas and say that it wants to develop a casino there. One could say that that is a buyer's market, not a seller's market.
The situation that the Minister outlines is that in Blackpool, where the local authority has a regeneration strategy through its master plan. The local authority has identified the site on which it wishes to develop the casino. Will my right hon. Friend confirm that when the independent panel looks at which areas to identify, it will consider whether there is a comprehensive regeneration strategy that includes the location of a casino, so that the local authority determines where the casino will be and the panel agrees to that location?
To encapsulate it, it is the local authority that runs the competition at the end of the day. If it has a strategy or a blueprint, that would obviously be helpful.
We all understand that the licence is worth something in itself. [Interruption.] Well, it is. A licence must be achieved to start with. That being so, why not auction the licences?
Because we did not go down that route. We have put the matter into the hands of local authorities. An operator will get a licence granted on the basis of social responsibility. The 24 sites will then be determined by a panel, which will be agreed by the Secretary of State. The local authorities that have been selected will then run the competition. It has planning powers and can grant premises licences. It will be for the local authority to determine that; it will not be done by auction.
We believe that that is the right way, because local authorities will determine the type of regeneration that they want for their area. I said in my statement that I hope that there will be consultation with local people as well, which is important. The responsibility has been put squarely with the local authorities to determine planning and premises licences once an operator has crossed the threshold of social responsibility.
On a point of clarification, does the Minister mean that if the rugby team in St. Helens have an agreement with a potential casino operator, the agreement is worth absolutely nothing? The local authority does not own land or the sites for supermarkets. The Minister seems to be saying that the agreements between all those people are now worth nothing because a local authority, which might change its political complexion in a few years' time, could say that it does not want a particular operator and that its competition will bring in a new set of rules. The club will want to have a realistic idea of where it is at the end of the day.
It will have to wait, as will others, to find out whether it is to be one of the 24 sites that are selected, whether regional, large or small. That will be determined by the panel. If Wigan were to get a site, a number of developers would want to make a bid for it. The local authority, in conjunction with the rugby club and, possibly, others, could agree to give planning permission and a premises licence. That would be when the competition process took place. The key question will be whether it is one of the 24 sites, and that will be determined by the panel and sanctioned by the Secretary of State.
We looked at the figures, and we believe that eight casinos will give us a cross-section of resorts, towns and other areas. That number gives the necessary coverage to do a proper evaluation without the danger of great proliferation.
I am conscious of the time. Earlier, I asked the Minister a couple of questions and they have not been answered. On the point that he just made, can he tell the Committee whether the concept of destination will inform the location of the regional casinos?
The answer is yes. We could probably debate how one defines destination. As to consultation with the industry, we are meeting tomorrow, and I have no doubt that from now until we return on 11 January, hon. Members will be lobbied very hard. No doubt there will be amendments prompted by all types of people. It is important that we made the statement today, because there is time for people to reflect on what we said before we discuss the amendments on 11 January.
The Minister implied that we may be able to table amendments before we meet again. That is not possible. Government amendments will be made, but we cannot amend them until they are incorporated in the Bill. We might have new clauses on 11 January, but how can we have amendments to clauses that have already been agreed?
It will be up to the Committee whether it accepts the new clauses. It can vote for or against them, and there will be stand part debates, Report and Third Reading. The Committee will have the opportunity to vote down new clauses and amendments, and if hon. Members are not satisfied they can debate the matter on the Floor of the House on Report and during Third Reading.
On a point of order, Mr. Gale. For clarification, we are coming back on 11 January. It is my understanding that the Government will table as many new clauses as they can which relate to today's statement. That is understood, and there is no problem. However, they cannot table amendments on that date. We can amend whatever we agree on 11 January only by tabling amendments on Report.
When I said amendments and new clauses, that was a rather sloppy explanation. Hon. Members have raised a number of detailed points, but they will be addressed in the new clauses and amendable on Report and Third Reading.
I raised a concern about the time scale; my hon. Friend the Member for St. Helens, South did the same. The outline that we have before us says that the independent panel will not come up with its judgment until the end of 2006. Will the Minister consider whether the time scale can be speeded up? Then interested local authorities, such as mine, will be able to have decisions made sooner rather than later. Can he explain why the independent panel will not start its deliberations until the beginning of 2006, and will not report until the end of that year?
Let us assume that the Bill completes its passage in the first quarter of next year. We will then set up the gambling commission very quickly. The Bill is not just about casinos; it contains important measures on remote gambling and electronic gambling which need to be addressed. We are already more than halfway towards setting up the gambling commission because we have the Gaming Board. That will form the core of the commission, and we will add further members to give it its full complement. At the same time as it becomes operational we will set up the panel to consider location. That will take advice from regional development agencies, taking into account their regional spatial plans, and make recommendations to the Secretary of State about the 24 sites. That can be done during 2006.
It will then be up to the gambling commission to invite companies that want licences to apply to it, and it will make decisions on them. That should not take too long. The licence decisions will be made on the basis of social responsibility and other conditions in the Bill. Those companies will then have licences. In parallel, the 24 locations will have been decided. It will than be for the Secretary of State to accept or reject the recommendations. Let us assume that they are accepted. Then the local authorities will invite those who have licences to apply for planning permission and premises licences. That could start in 2005 and carry on in early 2006. Once the premises licences have been granted, it will be three years before the casinos are operational. The gambling commission will collect all the data and report to Parliament.
In England—Scotland and Wales will be slightly different, so let us take England—the panel will be asked to consider where the sites will be. Once it has made that decision, all 24 will be presented to the Secretary of State. When the 24 are known, the local authorities will be told, and the gambling commission will issue the licences. Those things will happen in parallel, then the competition will start. That seems very simple to me.
Of course I realise what the Minister is saying. However, have he and his officials given thought to the football or rugby clubs who, in anticipation that they might be able to do something on their projects with casinos or other organisations, might now be negotiating sponsorship deals, perhaps to keep them afloat, in the expectation that they will forge planning applications with those organisations? Has the Minister been advised on and given thought to the fact that, in light of today's announcement, a number of football and rugby clubs may receive a letter tomorrow morning that says, ''There's no point in us having this sponsorship deal with you for the next three years, the money's gone''?
I am sorry, but I am taking through a Bill that could, if not handled properly, have a profound effect on the fabric of our society. When one considers some of the experiences around the world, one must say, ''We have to do this cautiously.'' The Government went to the House of Commons on Second Reading and said, ''We believe that we have enough controls to satisfy people's concerns.'' The answer to that was very clearly, ''No you have not.'' We returned to the House with a set of conditions that we believe address those concerns.
In the intervening period, every football club—certainly those in the premiership and the championship—has submitted an application to their local authority for planning permission for a casino. My own club, Sheffield United, has. It has pictures of the proposed casino up at the ground; I will be going up on Saturday. The money being spent is not the fault of the Government; if football clubs want to discuss casinos, it is entirely up to them. As a Minister, I cannot be held responsible for what happens to a rugby club, a football club or indeed a cricket club.
Nobody is remotely questioning the Minister's concern about the problems that might arise from gambling. However, until now it had been thought that it was up to the clubs and the developers to form associations with the casinos with which they wished to make an application. One of the major changes that the Minister has announced today, which surprised most of us, is that it will now be up to the local authority to run a competition to decide. That drives a coach and horses through any partnerships or agreements that clubs, developers and local authorities may have been nurturing and developing in good faith. Of course the Minister recognises the social consequences of gambling, but I am asking him to recognise the consequences for clubs that have been working in good faith on the predication that they would decide their partners for the development of a site. Today, we have the Government saying that clubs can no longer decide; the decision will be made by a local authority. That may cause problems about which they will quite fairly say, ''This is not a particularly good way to run a business.''
All I can say to those businesses is, had we got agreement on Second Reading on the type of controls that we believed necessary, and had those satisfied the House and the general populace, the predication to which the hon. Gentleman refers would probably have held true. It was very evident from representations, as the Secretary of State said in the House and elsewhere, that we should consult more widely to address those concerns. We have done that, and as a consequence the system has changed. There is no doubt about that.
We have intervened in the marketplace much more rigidly than we wanted to, but that is because the House asked us to do so. Make no mistake—one can read Hansard—on Second Reading that was what the House asked us to do. If the House now believes the controls are too tight, it will have another opportunity on Report and Third Reading to say that we have taken things too far. That is right, however, because there is a lot of concern about problem gambling. That is very clear to the Government and it would be wrong of us not to take it into consideration.
The system that we are putting in place is transparent, fair and leaves the final judgment with those that it will affect—local authorities. That is the right way to go. They will receive the advantages of planning gain on section 106 agreements and premises licences.
As the Minister has described it, if the operators get the premises licences, surely there will be a competition between different local authorities in the designated areas to attract those operators. Therefore, I suggest that the leverage power that those local authorities get and the maximum benefit that their areas receive will diminish rather than increase. Finally, how will the Government link the premises licence to the section 106 agreement of the planning application, which, according to their own document, are two separate processes? I cannot see how that can be done.
As I said, local authorities have done it before. We are consulting the LGA. There is no doubt that the integrity of the planning regime must be maintained. We want to make sure that there is proper planning—
Sitting suspended for Divisions in the House.
I have given an explanation, and hope to give more details when we return on 11 January and consider the new clauses.