'(1) No more than eight casino premises licences may have effect at any time in respect of regional casinos.
(2) No more than eight casino premises licences may have effect at any time in respect of large casinos.
(3) No more than eight casino premises licences may have effect at any time in respect of small casinos.
(4) The Secretary of State shall, having consulted the Scottish Ministers and the National Assembly for Wales, by order make provision for determining the geographical distribution of casino premises licences within the limits specified in subsections (1) to (3); for which purpose the order shall—
(a) specify which licensing authorities may issue casino premises licences of a specified kind, and
(b) in respect of each specified authority, specify the number of casino premises licences of each kind issued by the authority that may have effect at any time.
(5) An application for a casino premises licence may not be made to a licensing authority if subsections (1) to (3) and the order under subsection (4) would prevent the authority from granting the application.
(6) An application for a provisional statement may not be made to a licensing authority if it relates to a casino and is made at a time when subsections (1) to (3) and the order under subsection (4) would prevent the authority from granting a casino premises licence in response to an application made in reliance on the provisional statement.
(7) Schedule [Applications for casino premises licences] (which makes provision about the treatment of applications for casino premises licences and provisional statements) shall have effect.
(8) The Secretary of State may by order—
(a) amend any of subsections (1), (2) and (3) so as to substitute a new maximum number of casino premises licences;
(b) repeal any of subsections (1), (2) and (3).'.—[Mr. Caborn.]
Brought up, and read the First time.
New clause 20—[Hon. Members: ''It is the one about 8,8,8.''] I remember and I will answer the 8,8,8 question. It is unfortunate that my hon. Friend the Member for West Ham (Mr. Banks) is not present. It does not matter about getting on quickly, because it will take him a long time to get back here from where he is. He is over the pond, as they say.
In my statement on 16 December last year, I made it clear that the Government had listened to the concerns expressed by the House about our proposals for new casinos. I acknowledged that the proposals in the Bill represented a significant change in the nature and scale of casino gambling in Britain. We have therefore decided that we need to take a more controlled and cautious approach to the introduction of the new types of casino provided for in the Bill to ensure that they can be operated without increasing the prevalence of problem gambling. In our sitting on 16 December, I said that I hoped to table new clauses and schedules on the Government's casino policy before the Christmas recess. I was glad to be able to do so on 20 December. I hope therefore that members of the Committee have had plenty of time over the Christmas break in which to study them closely. On 20 December, I also sent Members on the Committee the text of those amendments that could not be tabled because they amended clauses that the Committee had already agreed. I hope that that was also helpful. If the Committee approves the new clauses and schedules that are being debated today, we will table the further amendments on Report.
We had an interesting and wide-ranging debate during our sitting on the last day before the Christmas break. I appreciate that it was difficult for the Committee to reach a comprehensive view without sight of our amendments, so, with the Committee's indulgence, I shall offer a detailed explanation of what new clause 20 and new schedule 3 achieve and why I think they represent a prudent way forward for the public and the casino industry alike.
New clause 20 is the key to controlling the proliferation of casinos in the country. It prevents there from being any more than eight new casinos of each of the three types provided for in the Bill.
No, I cannot, but I will look into that question when I have finished making my point.
Until Parliament decides otherwise, when the new regime comes into effect there will be a maximum of 24 new casinos in Great Britain.
I do not know whether that figure is correct when one takes into account the number of gaming machines now present in pubs, clubs and casinos. However, I accept the general point. Anybody who wants to work it out can do so because the number of gaming machines per establishment is absolutely clear. In the light of our experiences in Australia, we have tied machines either to an establishment or to the number of tables. There will be a clear link between the number of machines and the operation of gambling in this country, if the Bill is enacted. The provision is in the Bill, so anyone who wants to make a calculation they can do so.
It is a clear policy decision not to allow machines to proliferate. The hon. Gentleman is right: the issue is not purely one of casinos; the important part is how we control the number of gaming machines. That is what I believe we have done in the Bill. I do not know the actual figures, but no doubt somebody will calculate them.
Just for clarification, the provision mentions no more than eight premises per licence. Does that include existing premises, for example bingo halls and smaller casinos, converted to larger casinos, or does it refer to brand new casinos separate from existing bingo halls that want to convert to casinos?
If my hon. Friend allows me to explain a little more, I will answer his questions and come to the point about the 130-odd casinos—there is a debate about whether the number is 135, 136, 137—plus the 24 new ones. The number is important if we are to place at the centre of the Bill the need to test what happens as the new casinos are introduced so that people are secure in the knowledge that problem gambling will not proliferate. That is at the heart of what we are doing, because, as I said in my opening remarks on the clause, we have reflected on the arguments advanced on Second Reading and on the representations made to the Government.
Until Parliament decides otherwise, there will be an absolute maximum of 24 new casinos in the new regime. That is achieved in new subsections (1), (2) and (3). Members of the Committee had some seasonal fun and the Tories started before I got to my feet talking about the figure eight and the reasons for its selection. It is a decision based on the exercise of judgment, not on any precise, irrefutable scientific process, or on going to the Library to find out what the definition of eight is. There is no mystical significance to that number. We wish there to be a reasonably large number of each type of new casino so that the impact can be assessed in a range of areas and types of location that might be suitable. We think that a limit of eight each is a reasonable number to achieve the aim while ensuring any risk of problem gambling is minimised.
Some members of the Committee said on 16 December that there was no need for concern about small and large casinos, because there are plenty operating and they present no problems at all. The Government believe that that is incorrect. Small and large casinos under this Bill will be very different from those operating now. They will be bigger and offer new combinations on a large scale. All can offer eight to 15 times the maximum number of jackpot gaming machines offered in casinos now; large casinos will be able to offer betting and bingo in addition to casino games; and small casinos will be able to offer betting. The facilities will be appreciably bigger and different from those now on offer, so we must be cautious in our approach to their development.
I have also heard it said that it is unfair that the existing casinos will not be able to benefit from the full range of commercial rights that new small and large casinos will have. Again, I think that is incorrect, even though I acknowledge the disappointment that the operators feel. The reasons for imposing a limit on the new types of casino is because of the social risk that they pose, and that is true of small and large casinos, too. We propose to test limited numbers to minimise the risk. That cannot be achieved by testing as many as 150 casinos. If we did not impose the restrictions that we have, and gave the same rights to the 136 casinos currently operating, it would bring the total of new-style small and large casinos to about 150.
If an existing casino is one of the up to 24 areas selected by the Secretary of State, it may apply to operate one of the new-style casinos like any other applicant. We also needed a comprehensive solution because we had to acknowledge the implications of setting an initial limit on the number of regional casinos. If we had not done that and did nothing to control the number of small and large casinos, there would inevitably have been a market reaction and the risk of a large overall increase in the number of casino premises.
Subsection (4) of the new clause requires the Secretary of State to determine by order where new casinos can be licensed. Premises licence applications to licensing authorities that have not been specified by the Secretary of State will not be allowed. To assist the Secretary of State in that decision, if the Bill gains Royal Assent we will appoint an independent advisory panel to recommend areas for regional, large and small casinos. Obviously, the members will need a range of experience in, for example, casino regulation, problem gambling and economic development issues. The advisory panel will be asked to identify a good range of types of area, with a good geographical spread across Britain. Subject to those primary criteria, the panel will be asked to choose areas in need of economic development and likely to gain regeneration benefits from a casino. It will be important for the advisory panel to take into account the broad locations being identified in the emerging work on regional spatial strategies, which we hope will become available during 2006.
The Minister is making an interesting point about where the sites will be located. Will the criteria under which the independent advisory panel operates be published? If so, at what stage? Will everybody have a clear idea of how it operates?
The criteria will be published. The process will be open and transparent to the public. That will be laid out by the Secretary of State.
The Minister referred to the regional spatial strategies that the Office of the Deputy Prime Minister is driving forward. Could he confirm that significant development and redevelopment measures may emerge because of the new casinos and, therefore, that they will have a significant and important effect on the strategies, which clearly would need to be amended? The regional spatial strategies will affect many other issues such as housing and transport, and it would be helpful if he would clarify that they will have to be amended once the Secretary of State for Culture, Media and Sport has agreed to new casinos. Does the Minister agree that the strategies would need amending?
Not necessarily. The regional spatial strategies are under consideration now and authorities will be asked to consider whether their strategy should include a regional casino. That would be quite permissible. They work very closely with the regional development agencies at regional level—such things do not stand in isolation. Consideration of the strategies includes economic development, transportation, housing and recreation, and casinos would be part of the strategy.
The Minister will know that the east of England plan is out to consultation as we speak. Let us say that Great Yarmouth is chosen—I show no particular preference—after consultation on the plan ends in March this year. There is a danger that the plan would go forward and have to be amended after the public consultation. Can the Minister confirm that an adjustment such as a major casino in a town within the regional spatial strategy would require the strategy to be amended to reflect that significant change?
If the plan had been out for consultation and the whole of the consultation had finished, yes. I must admit that I am not au fait with the timing of the spatial plans—as the hon. Gentleman knows, that is an ODPM matter—but I shall take his point on board. Previously, any additions to regional planning have gone out for further consultation, and I imagine that the same criteria apply. I hope that if the Bill is on the statute book before any of the spatial plans are passed by the ODPM, they can be amended in that consultation process. However, I shall take the point on board, because the east of England spatial plan will probably be the first to be put in place. I shall look at the timing and ensure that we come back with an answer.
Subsection (4) of the new clause also requires the Secretary of State to consult Scottish Ministers and the National Assembly for Wales before making decisions on the location of new casinos. Both devolved Administrations have a major role in land and economic development, as well as in local government, so it is important that they are consulted.
Subsection (8) allows the Secretary of State by order to vary the limits on the new casino categories or lift them altogether. That is what makes our new proposals a test rather than a permanent cap. We have said that the Government will ask the gambling commission to advise on the impact of the new types of casino no sooner than three years after the award of the first premises licence. We believe that such a period is necessary to ensure that a full assessment can be made. We will keep an open mind on the most appropriate moment to assess the impact. If only a couple of new casinos are open after three years or if casinos are not open in a good mix of locations, it would be foolish to try to make a decision on the basis of a small sample. We want to be sure that our decisions are based on a good spread of casino locations and types and a fair overall number. I do not say that in the expectation of any extension of the initial period, but the Government must make decisions about further expansion on the basis of firm data.
If, with the advice of the gambling commission, the Government decide to propose that it is safe to allow more casinos to be licensed, that decision will need the approval of Parliament. That is set out in subsection (8) and again reflects what Parliament said on Second Reading.
Am I right in thinking that, even if only one or two casinos are operation three years after the commencement order, the Government may, in their wisdom, decide that that is enough to make an assessment and say ''These casinos are okay''? As a result, instead of the eight promised, we could then have the 30, 40 or 50 envisaged in the Government's original Bill. Is the provision not just a fudge to get where they wanted to be in the first place and avoid Parliament's views?
Not at all. It is not particularly shrewd either. I have said that we would want a good spread and fair numbers to make the decision.
As many as the commission believed was right for it to make a sensible decision, but at the end of the day the safety valve is Parliament. As I said, Parliament will say whether there will be an extension. I have just said that and it is clearly laid out in clause 20, which the Committee debated. That gives the reassurance that the House sought on Second Reading.
It will be the full House; it will be Parliament that decides. It will be both Houses of Parliament, if there are still two Houses of Parliament when the matter comes to be discussed. Parliament itself will make the decision.
That sounds all very well and good, but may I pin the Minister down? Is he saying that the vote will take place on the Floor of the House?
Yes, that is the intention. We want to give the House responsibility for an extension. We think that that is very important. If the hon. Gentleman has concerns, he can raise them. We believe that we have covered the matter under clause 20.
Mr. Foster rose—
Just let me answer the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale). We are reflecting what was said on Second Reading. The Secretary of State made it absolutely clear that if there is to be any movement from what is set out in the Bill, we shall carry out a proper assessment. We are not in the business of trying to out-manoeuvre people. We are dealing with a very serious issue, which is why we are doing what we are doing. When the 24 casinos are up and running, the new gambling commission will make an assessment, which will go back to the House. The House will then decide whether it wants to move the process forward. It would be stupid for any Government not to take into consideration the position of Parliament.
I am grateful to the Minister for giving way, and a happy new year to you, Mr. Pike.
To be helpful to the Minister, I note that subsection (8) of new clause 20 commences:
''The Secretary of State may by order''.
It is the normal convention of the House that an order would be considered by a Committee. There are different types of order, but it would normally go to a Committee rather than to the Floor of the House. If the Minister is saying that the provision is to be an exception to the rule and will be dealt with on the Floor of the House, will he assure us that ''order'' is the correct word? In my limited experience, which is nowhere near as extensive as the Minister's, I have never known an order to be considered on the Floor of the House.
The Minister has made some quite remarkable statements. I have to ask him about the authority by which he makes them. Has he got permission from and the agreement of the Leader of the House so that if the Labour Government are fortunate enough to win a second term—[Hon. Members: ''Third term.''] Does the Minister have the authority to state that there will be a debate on the Floor of the House? Has he already cleared that point with the Leader of the House?
In addition, many orders have a time limit. Would there be a move to increase that limit so that there can be a full, proper debate, not one of these one-and-a-half hour truncated affairs?
All we are doing is laying down the formula. It may well be that a decision is taken not to move forward with the process, or the House may argue that it does want to move it forward. There may be all sorts of circumstances. I am saying very clearly what the Secretary of State said on Second Reading in response to several expressions of concern about how the project will move forward. We will move it forward on the basis of an informed debate, based on information gathered by the gambling commission three years after the opening of the casinos. we shall bring that to the House of Commons and Parliament to be determined by an affirmative resolution, and I believe it would be the intention of the day to have that debate on the Floor of the House. I can go no further than that because a Government of our persuasion might not be in power six, seven or eight years from now.
Indeed. Those are the conditions that we have set out, and we have tried to cover them in clauses 332 and 20.
Before we leave this point, it is important to state that what the Minister just said does not sound quite as firm a commitment as the one he seemed to give about two minutes ago. Obviously it is dependent on his party being in Government, but as the spokesman for a Labour Government he said clearly in his initial remarks that any debate on the order would take place on the Floor of the House. He now appears to introducing an element of doubt. Will he say that, as the spokesman for the Government on the matter, he will bend every sinew to make sure that the motion is debated on the Floor of the House of Commons and not rubber-stamped in a Committee?
All I can say is that if the controversy about extending casinos is similar to that about introducing them, any Government would have to be stupid not to ensure that the matter was debated on the Floor of the House and would not take public opinion with them. We have got to do that.
I know that one can make political gestures that we had on the Floor of the House, but we have reflected on what was said on Second Reading and on the representations that were made. To be honest, we have also had discussions with Front-Bench Members of the Opposition parties to make sure that we bring in a piece of legislation that is workable and commands a broad consensus. That is why the Bill went to the pre-legislative scrutiny Committee. I reflect what the Secretary of State said. I cannot determine what the Leader of the House will do in six or seven years time, but I believe that the matter ought to be debated on the Floor of the House. That is why that we choose to require that the affirmative procedure be used.
New clause 20 brings into effect new schedule 3, which sets out the process for awarding premises licences for any of the new categories of casino where a limit has been imposed on the number of licences of that category that may be granted. The first step that the licensing authority must take is to invite applications in accordance with any regulations made by the Secretary of State under paragraph 2. Where the number of applicants exceeds the number of available premises licences, a two-stage process will be used to decide who is awarded a licence. Our expectation is that there is likely to be a two-stage process in all areas.
Paragraph 4 describes the first stage, which is a regulatory test to ensure that applications satisfy the regulatory premises licensing requirements in the Bill. Paragraph 5 describes the second stage, which applies when the number of applicants who have passed the regulatory test is greater than the number of licences that the local authority is permitted to grant. The second stage will be a competition held by the local authority to determine which of the competing applications would bring the greatest benefit to the local area. That competition could be judged on a range of issues, reflecting those that are important to the area. Those may include, for example, employment and regeneration, the design of the proposed development and financial commitments by the developer to local projects. Local authorities will set out their priorities and concerns and will then invite operators to submit entries to the competition.
The Government think it best to give local authorities a large degree of discretion about which benefits would be most suitable for their area. We do not think it helpful for the centre to be prescriptive about the requirements, because we are not best placed to judge local circumstances and because I am more than confident that local authorities will be able to develop comprehensive and ambitious strategies that will benefit their local communities. As my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) pointed out, some local authorities have done that and their plans are at an advanced stage.
The winner of the competition will be granted a premises licence or a provisional statement. If a provisional statement is granted, the operator will be eligible for a full premises licence once the casino has been built. Paragraphs 8 and 9 make provision about the issuing of provisional statements, including allowing licensing authorities to set a time limit on the duration of a provisional statement. A time limit may be necessary to prevent a licence holder from holding on to its licence without using it in order to prevent competitors from being able to open a new casino.
Paragraph 6 obliges local authorities to follow a code of practice issued by the Secretary of State about how the second-stage competition should be run. That code will be important to help ensure that the local authority manages the process properly and objectively. We will consult the Local Government Association and others in due course before issuing the code.
In my explanation of the competition process, I hope that I have made it clear that it is the local licensing authority that will make the decisions about which operator to select. The key point for local authorities and local communities is that the casino operator will have to convince local authorities that its is the best proposal for the community in accordance with the stated objectives of the local authority.
My hon. Friend the Member for North Durham (Mr. Jones) was concerned that casino companies could use the new system to play authorities off against one another. I hope that he is now reassured that the opposite is the case and that local authorities will have the gift of a licence while a casino operator will have to earn it.
Whoever they were selling to would have to have an operating licence from the gambling commission. That would be a commercial deal, and it would be discussed with the various operators and people concerned. It would be a normal commercial transaction.
So, a casino operator with a premises licence would have a commercially saleable product. I accept my right hon. Friend's point that it would have to be sold to another casino operator, but the provision is creating a product with quite a lot of value.
Very much so. It will be for the local authority to ensure that it gets that value from the negotiations between it and those who hold the licence. The panel will make a decision for a regional casino in area X. Those who want to will bid in the competition and it will up to the local authority to award the premises licence. The local authority will determine what it wants for its community, and when the premises licence has been issued, whoever takes it on will have to deliver what was agreed when it was granted, whether to operator A or operator B.
As the Minister knows, I and many other Committee members, not least Labour Members, have been concerned about ensuring that we get the regenerative effects of any new casino development. I want to hear him say that there is a mechanism whereby a local area, such as Blackpool, will have some guarantee of getting the regenerative benefits of what the Government are doing. The Government seem to be handing over the third revision of the Bill with no guarantee that the regenerative benefits that so many members of the scrutiny Committee wanted to be achieved will flow from the legislation.
I must stress yet again that we are doing what we are doing to ensure that we approach the development of such casinos cautiously, mainly because of social responsibility. There is no doubt about that and that is why the gambling commission is the first port of call in giving licences to ensure that fit and proper people operate a licence. Beyond that, and as I made absolutely clear when moving some amendments this morning, that regeneration will be subject to local authority negotiation, and there are no better people to negotiate such regeneration and decide who should have one of the 24 licences. Anyone who gets one of the eight regional licences will be in a competition, which will, to a large extent, be conducted by local authorities. I have said that we will discuss with the Local Government Association and others how to implement those criteria to ensure that it is transparent and fair.
The point that I have made to the Minister—not just once, but on a number of occasions—is that surely in this overarching legislation that is creating the new structure, it is for the Government to provide the mechanism by which local authorities can get the money. Given his answers to the hon. Member for North Durham, when a company has satisfied the basic minimum requirement of being a fit and proper company—I see the hon. Gentleman nodding—the whole thing can be shifted to another company that may be fit and proper but has no intention of providing the regenerative benefits. That is the difficulty. By failing to provide a mechanism in the Bill to ensure that the money goes to regeneration, the Government have sold the pass. They are handing the whole problem over to local authorities.
The hon. Gentleman has totally misunderstood what I said. I am saying that the local authority will give a premises licence or a statement of premises licence, which will contain all sorts of conditions that I have just outlined and may include regeneration or investment. It is best for the local authority to do that by way of a competition. The criteria will be clearly laid out by the local authority, the negotiation will go ahead and whoever has signed up to operating the premises licence will have to deliver. That is why I said earlier that the premises licence might not be granted totally until the project is up and running. That provides the added leverage—an added stick—to ensure that the project is completed. Whoever takes responsibility for the licence will have to carry out that work.
I want to clarify one point. As I understood the Minister's earlier comments, the independent panel will be working against criteria that include economic regeneration as a key element. In allocating the eight licences for the regional casinos, the panel will look at economic regeneration; take cognisance of the regional spatial strategy; and make recommendations to the Government, who will determine where those eight regional casinos will be. With the key aspect having already been identified by the panel and the Government as economic regeneration, the local authority will then examine the competition to ensure that it maximises that benefit. Have I painted the right picture?
My hon. Friend is absolutely right. There will be a written agreement, as stated in paragraph 5(3)(b) of new schedule 3. The authority
''may enter into written agreement with an applicant, whether as to the provision of services in respect of the authority's area or otherwise''.
There will be a written agreement, whoever is the operator. If there is a sale from one operator to another in the intervening period, as long as they are licensed by the gambling commission and take on the full conditions on which the premises licence has been issued, the sale will be permissible.
I have to say that in my experience that approach is fine in the purest sense, but in practice once somebody has a premises licence, they have a marketable commodity that they will sell for a large sum of money. They will have created a valuable asset, which might be worth millions of pounds. I accept that they might wish to pass it on or transfer it to somebody with a casino who is approved by the commission, but in reality and from my experience, if the new operator says, ''We cannot afford to do X, Y and Z,'' a gun is held to the head of the local authority, which has to take it or leave it.
The real world is what it is. In the real world, the competition for eight regional casinos will be pretty intense. If the reaction caused by us limiting that competition is anything to go by—people want more than that number—there is no doubt at all in the real world that eight regional casinos are going be pretty successful as a product in the marketplace in Britain.
We can debate that until the cows fetch us, but quite honestly, one makes a judgment based on reality and, looking around the world to where that type of regional casino has been operating, one finds that they are quite profitable. A great concern of the House and the country was that to allow this process to move too quickly might create a lot of problems. We have made the process more potent, not less, in terms of its ability to regenerate and be a financial entity in its own right in the real world.
I accept the point regarding the Valhalla in which the Minister lives, but I am concerned to ensure that if someone gets an operator, they do what they are supposed to do. I am sorry, but in practice they will not do it. My right hon. Friend should consider ways to tighten up the process to ensure that what operators offer is delivered. I can see it now: local authorities will face a licence being passed on or sold to another operator, who might suddenly come back to the authority and say, ''Sorry, but we can't afford to do this.'' The authority will have no option but to accept it. My right hon. Friend might want to tighten up the legislation if he wants to ensure that regeneration is the effect of what he is proposing.
On the transfer of conditions, in any commercial deal, the laws of the nation and company laws are laid down. I do not believe that a set of bandits, rather than responsible companies, are operating here. To get a licence through the gambling commission, companies will have to acknowledge their corporate and social responsibilities and show that they are fit and proper persons. They will be major companies, not fly-by-nights. If they decide to take over a premises licence, they will have to take over the conditions entered into by the original signatory. I do not believe that such companies will start reneging on those deals. I cannot guarantee that absolutely, but companies entering contractual arrangements with a local authority or a private company can be dealt with through various company laws and the courts of this land.
The Minister might want to give the commission power over the transfer once an operator gets its premises licence. If a licence is going to be transferred to another company, the commission might want a veto of some kind over that. At least that would protect what he is trying to achieve.
I do not know whether that would be the right way forward. If there are good reasons for a premises licence being transferred transparently and in a proper commercial way to deliver what the local authority agreed with the original licensee, I see no reason to impose further constraints to stop it. It might be a proper commercial deal that benefits the local authority and others, so we should be extremely careful.
I believe that the safeguards and procedures that we have included in the various stages of the licensing process give adequate comfort to local authorities and the gambling commission. If people transgress, contractual and company laws outside the Bill will ensure that local authorities can get what they deserve.
I want to be absolutely clear that I understand what the Minister is proposing, so it will be helpful if I tell him what I think he is proposing and he tells me where I am wrong. Is he proposing that the new commission will decide which areas and local authorities get the precious eight regional casinos and then decide which of the operators is to be granted a licence in those areas, or will he allow operators to be granted a licence and then bid to the local authorities to determine who will be given one of the eight casinos? Who will be in the driving seat of allocating the casino operator to the local authority, and what conditions will be set?
The hon. Lady is not quite right, so I shall explain the procedures again. To start on the road of operating a casino in this country, someone will have to get a licence from the gambling commission, which will be given to a fit and proper person in terms of their social and corporate responsibility. In parallel with that, a panel will determine where those 24 licences should be granted against criteria of regeneration and after consulting the regional development agency, regional spatial strategies and others. That panel will come to a decision for the 24 sites for regional, large and small casinos.
It is always dangerous to name names, but let us say that eight regional licences are determined for sites A, B, C, D, E, F and so on. The local authority—let us say it is Birmingham—will get a licence in its planning area. It can then invite any one of those who have received a licence from the gambling commission to make a bid. It will have laid down transparent criteria for what it wants for offering a regional casino licence to one of those bidders, who will bid against those criteria.
The local authority will have the power to give both planning permission under section 106 and a premises licence. There will be a negotiation about that. There are three separate things. The first is a licence to operate, which will come through the gambling commission. Alongside that, the panel will meet and determine against the criteria where the 24 licences ought to go. Its decision will go to the Secretary of State, who will inform the local authority that it can develop a regional casino. The local authority will have the powers relating to planning and the premises licence to be able to negotiate with those who want to bid. That is the procedure. It is quite simple, and I think it is pretty clear and transparent.
I want to follow up the point made by my hon. Friend the Member for Bromsgrove (Miss Kirkbride). Is the Minister saying that, when the panel identifies the 24 areas where the casinos will go, it will specifically nominate local authority areas? In other words, if the panel decides that Chelmsford will be blessed with a regional casino, it will have to be in the borough of Chelmsford, not the district of Maldon, which is right next door.
It will be the local authority, because it must give the planning permission and the premises licence. That local authority area, with planning permission, will be designated as the authority to invite those who want to bid to do so.
I have no doubt that, in the real world that we live in, the members of the panel, who are sensible people, will get a real feel for who wants a casino. If the Lobby of the House of Commons is anything to go by, I can assure the hon. Gentleman that there are a lot of contenders out there. It is amazing how many people said on Second Reading that they did not want casinos, but by God, the comments I have heard in that Lobby in the last few weeks suggest that more casinos would not be a problem. Make no mistake about it.
That is news to me. It is always interesting to know these things. We are following the French on this, but I hope they will be following us on the 2012 bid.
I agree entirely with the Minister's final remark. I want to ask again for clarification of a point raised in our deliberations just before Christmas. My understanding is that the competition will be for the premises licence—it clearly will not be for planning permission—yet in normal circumstances the planning gain comes in a deliberation in respect of the planning application. We then get into the question of section 106 agreements as amended by the Planning and Compulsory Purchase Act 2004.
We know that, under the planning legislation, local authorities are not allowed to make excessive gain from a planning application. Therefore, this major regeneration benefit will come only through a mechanism that allows a local authority to make bids in a form beneficial to its area as part of the competition for the premises licence. Will the Minister confirm, first, that I am correct on that? Secondly, if I am, will he also confirm that his staff have checked that there will be no problems in that respect in relation to competition law?
The answer to the last question is yes. Our lawyers say that what we are doing is absolutely within competition law. That is not to say that there will not be some gain from applying for planning permission, but, as the hon. Gentleman will readily accept, it is limited. We have introduced the premises licence, so that the true economic gain can be obtained from such a development. The two things are separate, and we have introduced the premises licence because the integrity of the planning laws must be maintained. That is why planning will be done separately. Nevertheless, there can be planning gain under section 106, although it will be limited in scope. The real economic gain could be achieved by the premises licence.
Could I not apply for planning permission without having a premises licence? What would the criteria be for a local authority, if, for example, I set up a company but did not have a premises licence and wanted to apply for planning permission? It seems that there is nothing to stop anyone doing that. As part of the process, will the council have to designate the site in advance, or will it just be a geographical area? I can envisage a situation in which people will appeal against refusal of planning permission for perfectly legitimate projects that meet planning regulations, on the grounds that they do not have a premises licence.
If anyone wants to apply for planning permission for anything, they can do so—if they are daft enough to spend a lot of money doing something that they know will not materialise, they can apply for planning permission. Indeed, there are local authorities that have granted planning permission for casinos in the full knowledge that a licence will be needed to operate them. I have said before that I think every football club—certainly every premier division and every first division football club—and many rugby clubs have already been examining development in terms of casinos. They are entitled to do that, but that does not necessarily relate to what I am doing in terms of putting legislation on to the statute book.
I would not be daft if I applied for planning permission, because if it was granted I would have a marketable commodity with an actual value to a whole range of operators who would potentially have licences. I do not accept that the two can be knitted together as the Bill envisages.
We can debate this, but the local authority may decide that it does not want such development in a particular area, because it will not deliver the regeneration that it wants. It might be more selective in relation to a site where the premises licence is conditioned not by planning but by economic gain. The authority might say, ''You asked for planning permission for that site and we have given it to you, but that is not our preferred site. Our preferred site is this one for these reasons.'' It is entitled to do that with the premises licence.
The Minister was critical of organisations such as rugby and football clubs that have already put in planning applications. However, they did so because they believed all the promises that the Government had made up to and including Second Reading, before their series of massive U-turns. Those organisations were not being stupid; their only stupidity was in believing that the Government would follow through on what they had been saying for months, throughout the scrutiny Committee process and through the passage of the legislation until midway through the Standing Committee proceedings, when they went into reverse.
The hon. Member for North Durham, with all his experience of the local authority world, clearly takes the same view as me, that developers quite frequently change the goalposts in the middle of a negotiation and hold pistols to the head of a local authority. Would it not therefore be a much greater guarantee of regeneration, instead of leaving the whole issue to be negotiated between the potential operators and local authorities, the Government included a specific mechanism in the Bill that gave the local authority the opportunity to get those regenerative benefits? That would put the local authorities in a much stronger negotiating position to guarantee those benefits.
Order. The Minister said when he gave way that he wanted to finish speaking to the new clause. I recognise that we are discussing an important point, but hon. Members will have the opportunity to debate the new clause when the Minister has finished. I will therefore support the Minister if he resists giving way too many times.
To answer the last intervention, if anything has put local authorities in a stronger negotiating position it is the limitation to eight regional, eight large and eight small casinos. There is no doubt that it is a seller's market. I cannot tell local authorities what to do, but I have every confidence that they will be able to extract what they want from the process. The key point is that the casino operator will have to convince the local authority that its proposals are the best for the community, having regard to the authority's stated objectives. My hon. Friend the Member for North Durham was concerned about that point, but I hope that I have reassured him and that my explanation of the system will also reassure members of the Committee who are concerned about the risk of legal challenges to local authorities. The Bill will give authorities a foundation to run a competition on the basis of benefits to their areas. As long as local authorities act reasonably, they will have wide discretion to seek benefits for their areas.
The proposals offer a balanced and cautious approach to the introduction of the new legislative framework for casinos. They represent a significant shift from our position on Second Reading. That shift has happened because we have listened. On Second Reading, hon. Members on both sides of the House asked us to put in place a stricter regime. We have done that in a way that puts public protection above all other interests, whether commercial or those of local authorities. The proposals allow us to secure economic and regeneration benefits while ensuring that we can maintain Britain's good record on problem gambling.
The Minister rightly refers to the existing very good record, so it is important that we consider existing businesses. I am, I confess, one of those who did not spend the entire Christmas period reading the information that the Minister sent us, so I must have missed something somewhere, but will he explain what will happen to existing casinos? Clause 7 makes it clear that there will be four categories: regional, large, small and below the minimum size for a licensed casino. I think that the whole Committee understood during debate on that clause that all existing casinos would be confirmed as being in one of those four categories. However, as new clause 20 does not refer to new casinos, we are now talking about having only eight regional, eight large and eight small casinos. Presumably that leaves all the rest as they are, with none of the benefits from the changes made. Will the Minister clarify that there will now be no changes in the designation, categorisation or naming of existing casinos, whether we are talking about 130 or, as he said today, 137?
I say that there are between 135 and 137 casinos because no one is clear on exactly how many we have; it depends who is asked. There are two ways in which things will change for the 130 or so casinos in this country: the 24-hour rule will go, and they will be able to advertise. Beyond that, they will not get the commercial rights of small and large casinos that I have just explained, because they will be able to take betting and bingo in some cases, and betting in others—there will be an extension of that. There are four categories of casino: regional, large and small casinos and the 130-odd that are operating now, which will have new commercial rights in the sense that there will be no 24-hour rule and they will be able to advertise, if the Bill goes through.
Does that mean that the Minister will introduce amendments to clause 7? I take it from his body language that that will not be the case. I just want to be clear. I think that what he has said means that all existing casinos stay exactly as they are, albeit with the two changes to which he referred. If one of those casinos, in Chelmsford or wherever it might be—it already exists—lobbies the advisory committee on the basis that it wishes to convert itself into a small, large or even a regional casino, that will mean that it becomes one of the 24.
Absolutely. That is why we can say with certainty that there will be no more than 150 casinos. There could be fewer. If all 24 go to operators that are already there, there will only be 136 casinos. We could have a maximum of 150, but if 24 casinos are already operating and want to take up the licences in their areas, they could do that.
Does not the explanation given to the hon. Member for Bath (Mr. Foster) mean that the selected 888 will have a considerable commercial advantage over existing casinos? What we will have is a reduction in the overall number of casinos because existing ones will be at a commercial disadvantage. Will there not be a reduction in the numbers, which might be what people want?
That is one scenario. However, we can paint another scenario. Had we done what we said we were going to do at the beginning of the Second Reading, a lot of those casinos would definitely have gone. There is no doubt that the 130-odd casinos have had a monopoly under the 1968 Act. The Bill will liberalise that marketplace because the demand is there. We are acting cautiously, which is why we are introducing three different types of casino: the regional, the large and the small. The House will determine later whether it wants that to progress, but there will be a maximum of 150 casinos operating in this country. It depends which scenario one wants to paint. It could be said that the current operators of casinos are much more protected than they would have been had the original proposition of between 20 and 30 regional casinos gone through.
If over time the new casinos are seen to be developing in a cautious and socially responsible fashion, Parliament can relax the very tight restrictions on supply inherent in the proposals. For the moment, we are taking one cautious step at a time, which I believe to be the right approach.
We do not have a great deal of time left this morning so perhaps I shall just introduce some of our concerns. I congratulate the Minister on his bravado performance, but I hope that he will understand that if we are to have a meaningful debate on the clause, there are an awful lot of questions that it would be helpful to have answered before we explore the Government's thinking, rather than waiting until the Minister sums up. That is why a number of hon. Members on both sides of the Committee wanted to probe the Minister a little further. An awful lot of questions remain unanswered even after the statement the Minister made when the bombshell was dropped on 16 December, and the tabling of the amendments. We need greater clarification on those questions.
Part of the problem is that the genesis of the Bill was a matter of consultation, building consensus and giving the industry and other interested bodies the opportunity to have an input. However, the new clause, which fundamentally changes the thrust of the Bill, has come out of nowhere. It has certainly not been subject to anything like the consultation that the Bill had had before. As far as I can see, it was subject to no consultation at all. The gasps of amazement with which it was greeted from every corner suggests that the Government had not sought to obtain the views of any of the interested bodies before reaching their conclusions. I said that the Government had abandoned the consensus approach, perhaps the only consensus that I have managed to find is one that this is an absurd position to adopt and will make for extremely bad law.
That is an important part of our argument. We draw a strong distinction between the approach needed for the introduction into this country of an entirely novel concept: the regional casino—an enormous investment attracting thousands of people every week. Regional casinos incorporate up to 1,250 machines of a kind that we have never had in this country. We have always said that that needs to be introduced very carefully, which is why we advocated the pilot scheme and all the other safeguards. However, the considerations that apply to large and small casinos are entirely different. Those casinos are not a novel concept: we have had large and small casinos in this country for some time. They will not contain any category A machines, so all the risks that people are concerned about that are associated with category A machines will not apply to large and small casinos.
If there is a danger that capping the number of regional casinos might lead to a proliferation of large or small casinos, there are safeguards already built into the Bill that would prevent that—or at least that was what the Government told us repeatedly throughout the earlier stages of our debate. They had decided not to go down the route of imposing an arbitrary limit on number, but had instead put in safeguards that would use market mechanisms to limit the number. We feel that if there is a danger that capping the number of regional casinos will lead to greater proliferation, that can and should be addressed by a different method from the one that the Government have suddenly decided to adopt, which is to impose an identical cap on the number of large and small casinos as well. I have yet to discover anybody who recommends such a strategy. It was greeted with some astonishment when it was unveiled.
This debate is extremely unsatisfactory because many of our concerns relate to the way in which the Government have chosen that particular number, why they have decided to adopt that route and not another, and how the process of selection will take place. In the normal course of a debate of this kind, the best way of probing the Government's thinking would be to table amendments that reflected how we felt that the system could operate better. However, because the Government have dropped the provision in right at the last minute as a new clause, we have no opportunity to table any amendments to it. We are presented this morning, on a take-it-or-leave-it basis, with a huge new clause that completely changes the Bill. We must either support the entire new clause or reject it.
Order. I did indicate the procedure for tabling amendments to the new clauses before Christmas. They could have been tabled up to Friday of last week. I made that clear in the last sitting before the recess. I was trying to be helpful to Committee members. I just want to make that clear.
I am grateful to you, Mr. Pike. Perhaps we did miss an opportunity. However, given the time scale we were set, it would have been extremely difficult. There will be a better debate on Report, when we will be able to table our amendments to the new clause and when we might be able to test the Government's approach in a little more detail. However, that is not to say that we cannot flag up a number of our concerns in the stand part debate on the new clause. That is what I seek to do this morning.
It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till this day at half-past Two o'clock.