Scotland Bill

Lord Bruce of Bennachie Excerpts

Tuesday 19th January 2016 Lords Chamber

Moved by

[Lord Bruce of Bennachie]

54: Clause 49, page 51, line 36, leave out from “authorised” to “(or”

[Lord Bruce of Bennachie (LD)]

My Lords, I rise to move this amendment in the name of my noble friends, with apologies to the Committee. I have not taken part in deliberations on the Bill so far because when it was last before the House, I had not made my maiden speech. Noble Lords will, however, understand that I have a very direct interest in it as a former leader of my party in Scotland who negotiated some of the original agreements for the first Scotland Act and the creation of the Scottish Parliament.

These amendments relate to gaming regulations. They have been tabled to try to ensure that the Scottish Government have a clear line of responsibility and that there is no confusion between the two Governments. The first two, essentially, would ensure that the Scottish Government have the right to vary the number of gaming machines regardless of the stake they carry. As it stands, the Bill specifically relates to a stake of more than £10. Our concern is that we need to be able to ensure that there is a clear line of authority, that the Scottish Government have the right to regulate all gaming and that there is no confusion about that.

It is important to recognise where Clause 49 devolves, by way of an exception from the current reservation in Schedule 5 to the Scotland Act 1998, power to vary the number of gaming machines authorised by a betting premises licence granted by a licensing board in Scotland where the stake is more than £10. But the Smith commission specifically stated:

“The Scottish Parliament will have the power to prevent the proliferation of Fixed-Odds Betting Terminals”.

The Committee will understand the pain and disastrous consequences that these machines have caused some people both north and south of the border. That legitimises the reason to ensure that the power exists to regulate them. These machines have been described as the crack cocaine of gambling because they are so addictive. It is possible for people to lose substantial sums in a very short time. It would be unfortunate if there were a diversion of power and authority, which the exception currently in the Bill seems to produce. That is the first point. These two amendments would remove the limitation of £10 and give the authority to the Scottish Government to regulate and reduce the number of all machines, regardless of the size of the stake.

The second is the exception that basically denies the Scottish Government the right to regulate those licenses that have already been awarded. The current exemption states:

“The amendments made by this section do not apply in relation to a betting premises licence issued before the section comes into force”.

Once it becomes apparent that, under the new legislation, the Scottish Government have the power to regulate gaming machines but not to regulate those that were licensed before the power was granted, people in Scotland will likely regard that as a slightly untoward situation.

I appreciate that people will argue that there are difficulties associated with revoking licences that have previously been issued, but it seems to me that that is nevertheless a matter for the Scottish Government to determine in the future. They need to make a judgment as to whether there are any practical difficulties. Why should the current legislation deny the Scottish Government the right to make that decision?

Essentially, these amendments seek to give a power to the Scottish Government to regulate all gaming machines regardless of the stake, to do so in a way that enables them to limit the number of machines, and to be able to make changes to those that were licensed prior to the Act coming into force. On that basis, I commend these proposals and I beg to move.

[Lord Davidson of Glen Clova]

I rise to speak to Amendments 55 and 57 in my name and that of my noble friend Lord McAvoy. The amendments would require licensing standards officers in Scotland to be recognised as authorised persons who may exercise inspection and enforcement functions under the Gambling Act 2005. In its submission to the Scottish Parliament’s Local Government and Regeneration Committee’s call for evidence to the inquiry into fixed-odds betting terminals carried out in August last year, the Law Society of Scotland outlined its concerns. Those concerns, previously raised with the Gambling Commission, are whether a licensing standards officer appointed under Section 14 of the Licensing (Scotland) Act 2005 has the power to carry out any of the enforcement activities under Part 15 of the Gambling Act 2005 in respect of both alcohol licensed premises and gambling licensed premises.

Unlike in England and Wales, the licensing authority in Scotland is the licensing board, which has no officers or employees. Licensing standards officers are officers of the local authority, not of the licensing board. This is confirmed in the Gambling Commission’s advice note on the role of authorised persons in Scotland and states that the enforcement powers contained in the Gambling Act cannot be exercised “as of right” by an LSO. As an authorised person, an LSO would be entitled to:

“Enter premises for the purposes of discovering whether facilities for gambling have been … provided, whether the premises are licensed for gambling and whether the terms and conditions of any licence are being complied with”.

In addition, LSOs would have powers to,

“inspect any part of the premises … to question any person on the premises; to require access to and copies of written or electronic records kept on the premises; to remove and retain items which may constitute or contain evidence”.

Additional legislative competence is being devolved to Scotland in this area, and therefore we suggest that it is vital that the Scottish Parliament is given all the necessary resources to manage these increased responsibilities. That, we say, is exactly what Amendment 55 does. The authority of licensing standards officers must be beyond any doubt, and that is what the amendment seeks to achieve.

Separately, I turn now to the issues raised by the noble Lord, Lord Bruce of Bennachie. In setting the £10 limit, we suggest that the Government have failed to meet the recommendations of the Smith commission. We would be keen to know why a £10 threshold has been set. Is it perhaps that the Government wish to roll out a similar policy across the whole of the UK? That may be understandable. However, not only do fixed-odds betting terminals with a stake of less than £10 remain the responsibility of the UK Government but, crucially, the maximum stake threshold does not cover other reserved matters such as the speed of play or the type of game being played. The existence of a threshold would allow addictive casino games to be placed in Scottish bookmakers without recourse to the Scottish Government. That is plainly of concern. What, we ask the Minister who is to reply, is the policy justification for this aspect in Scotland?

Responding to a question on this issue in the other place, the Secretary of State for Scotland said that he was “reflecting” on it. At what stage are those reflections, and might the Minister explain how the Government’s proposals are in keeping with the Smith commission’s recommendation that the Scottish Parliament be empowered to prevent the spread of fixed-odds betting terminals? I look forward to his response.

[Lord Dunlop]

My Lords, perhaps I may set the scene for Clause 49, which refers to gaming machines in licensed betting premises. The provision will give the Scottish Parliament the power to vary the number of high- stakes gaming machines permitted by betting premises licences in Scotland. This power applies to all gaming machines on which players can stake more than £10 per play, which was referred to by the noble and learned Lord, Lord Davidson. At present this is possible on sub-category B2 gaming machines only. These are the machines that are widely referred to as fixed-odds betting terminals. Further, the power conferred by the Gambling Act 2005 on the Secretary of State to vary the number of such machines permitted by new betting premises licences will be transferred to Scottish Ministers.

FOBT machines are located almost exclusively in high street betting shops, and it is these machines with a maximum stake of £100 and a maximum prize of £500 on which recent public interest and debate have centred. This implements paragraph 74 of the Smith commission report which was explicit in saying that the Scottish Parliament should have,

“the power to prevent the proliferation of Fixed-Odds Betting Terminals”,

and this clause achieves that.

The Smith commission agreement was explicit in saying that the Scottish Parliament should be able to exercise new functions under the Gambling Act 2005 to increase or decrease the number of FOBTs which are authorised by new betting premises licences. The power is sufficiently broad to permit the Scottish Parliament or Scottish Ministers to reduce the number of FOBTs authorised to zero in a new betting licence. The Scottish Parliament will be able to prevent increases in the number of FOBTs created by the opening of new betting premises, as Smith proposed. Gambling and its impact on society is a topic which the Government understand and take seriously, and we remain alert to the changing dynamics of the wider debate and will act in this area as appropriate.

I turn to Amendments 54 and 56, which seek to extend the scope of gaming machines covered by the clause. These proposals go substantially further than what the Smith commission referred to. They would bring within the scope of the clause all gaming machines regardless of stake size. At present, a betting premises licence issued under the Gambling Act 2005 authorises its holder to make up to four gaming machines available for use. The Categories of Gaming Machine Regulations 2007 provide that this entitlement is limited to gaming machines which fall within sub-categories B2, B3 and B4 and categories C and D. The Smith commission agreement relates only to FOBTs, and the term FOBT cannot be found in the Gambling Act 2005, but it is commonly used to describe category B2 machines by the Government as well as the Scottish Parliament’s Local Government and Regeneration Committee. The Smith commission’s use of the term FOBT is not shorthand for all gaming machines. FOBT machines are located almost exclusively in high street betting shops, and it is on those machines that the recent debate has centred. As such, the Government consider that the intentions of the Smith commission agreement have been delivered and that it is unnecessary to bring other gaming machines, which have far lower stakes and prizes, within the scope of this clause.

I am grateful for the contribution that was made on Amendment 58. As I have said, the Smith commission sought powers to prevent the proliferation of FOBTs, and the Government have interpreted this to mean the ability to restrain any future increase in the number, thus preventing proliferation—and hence the focus on new licences. Amendment 58 would extend this power to include existing licences as well as new ones. In conjunction with the extensive planning powers which have already been devolved, the clause as drafted will give the Scottish Parliament sufficient levers to tackle high street gambling and the extent of FOBT terminals, as Smith envisaged and which is the focus of public debate. The Government’s approach is appropriate and therefore I hope that the amendment will not be pressed.

The noble and learned Lord, Lord Davidson, proposed Amendments 55 and 57, which would allow the Scottish Parliament to include licensing standards officers in Scotland as authorised persons who may exercise inspection and enforcement functions under the Gambling Act 2005. There is already a well-used and straightforward mechanism in Scotland whereby licensing standards officers may be authorised persons for the purposes of the inspection and enforcement of functions under the Gambling Act 2005. The Gambling Commission has very helpfully issued guidance on this. Local authorities are already responsible for determining how their existing officers discharge their duties. Clause 49 does not change that. As such, we consider that the amendments are not necessary.

Again, I urge the noble Lord to withdraw his amendment.

[Lord Bruce of Bennachie]

I am grateful to the Minister. As he will know, these amendments were proposed by the Law Society. While his response has made clear that he believes, in accordance with the Smith commission, that it is giving the power to regulate new licences for high-value machines, it creates a dilemma, which means that some machines in Scotland will be regulated by the Scottish Government and others would still be regulated by the UK Government. Would it not be more sensible to have a single Government, the Scottish Government, responsible for the regulation of all machines rather than have certain machines over which the Scottish Government have power and others which remain with the United Kingdom Government, causing potential confusion and future conflict?

That was the purpose of the amendment. All I ask of the Minister is that he reflects on the fact that, while I understand the reasonings for the amendments—I am happy to withdrawn mine on that basis—he should recognise that this could create an anomaly in the future which might require him to come back with future legislation. There is some logic in doing it all in one rather than having to come back on another date. I beg leave to withdraw the amendment.

Amendment 54 withdrawn.