Communications Act 2003 (Maximum Penalty for Contravention of Information Requirements) Order 2011
Debate between Lord Clement-Jones and Lord Moynihan
Lord Clement-Jones
My Lords, I understand the purpose of this order; the reasons for it were very cogently set out by my noble friend. European directives in the telecoms area have been extremely important in making sure that we have a level playing field in telecommunications across Europe. I doubt anybody would deny that the European framework is extremely important. However, this is only one part of the implementation of the changes to the European framework of directives. The question that occurs to me is: why are we not dealing with all the other aspects of the changes at the same time? One could then see the full context in which those changes are being made. I wonder whether I may have missed three statutory instruments this month, which is easily done, especially in this House. I may not have missed them—they may be coming down the track—but it would seem convenient for us to deal with them and this rather draconian order at the same time. The impact assessment that comes with the Explanatory Memorandum deals with the whole slew of other changes being made to the European framework and the other five directives that are part of it. Therefore, it would have been convenient to deal with them at the same time.
As the Minister says, the consultation broadly supported raising the level of the sanction to £2 million. However, “dissuasive” is, on the face of it, quite a subjective word. I wonder whether the Minister could define “dissuasive”—a word she used three or four times in the course of her excellent introduction. For instance, what is dissuasive about a penalty of £2 million as opposed to £1 million? I wonder whether this is less of a legal definition and more of a value judgment. I am perfectly okay with it being a value judgment, but we need to accept that it is and that it is a judgment made by the Government, who are not really objective in the circumstances.
I fully understand the nature of the changes being made to the authorisation directive in terms of specific sanction. However, I find parts of the impact assessment confusing. Looking at the impact assessment that deals with the authorisation directive, policy option 1 is:
“Implementation of the Authorisation Directive—articles for which there are no options in implementation”.
Then we move swiftly on to policy option 2, which is:
“Preferred implementation of the Authorisation Directive—articles for which there are options in implementation”.
Which option have we chosen? It is not clear to me from this impact assessment which option we have chosen. I assume that we have chosen policy option 2, but there was no explanation of that in the Minister’s introduction. It would be extremely valuable if she could explain which of the policy options has been adopted. Indeed, perhaps I was not even looking at the right impact assessment; that is always a possibility.
Lord Moynihan
My Lords, my intervention on this will be very brief. I echo my noble friend’s comments about the Minister’s excellent introduction. I should like the Minister to give us a little more clarity, if possible, on the consultation outcome. The rise from £50,000 to a maximum of £2 million, based on a value judgment, is large. Descending on the £2 million is the issue that I shall focus on. Could the Minister, in replying, let us know a little more about the level of response to the consultation exercise which was supportive of the figure of £2 million? The Explanatory Note includes a breakdown of small groups and groups that took different views, but I should be grateful if the Minister could tell us whether there was overwhelming or significant majority support for the proposal that she has brought to the Committee today.
Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2011
Debate between Lord Clement-Jones and Lord Moynihan
Lord Clement-Jones
My Lords, I thank my noble friend the Minister for her introduction, which I believe makes a strong case for redressing the balance, as I see it, between licensed betting offices on the one hand, and arcades, AGCs and bingo clubs on the other. She mentioned figures, which are contained in the Explanatory Memorandum, about the closures of bingo clubs and AGCs over the last few years. There are some 400 closures—391, to be precise. That illustrates the problems that those establishments have faced over the past few years.
I pay tribute to BACTA and some of the other organisations for the persistence with which they have pursued this issue on B3 machines. We have to accept that the previous B3 regime encouraged premises to get round the limits by splitting their space up into separate areas, as the Minister mentioned. This announcement has been mooted for some time; indeed, when one looks back at debates on orders on C and D category machines under the previous Government, it was clear that there was a debate over whether the B3 changes could be made at that time. Certainly, favourable noises were made by Mr Sutcliffe and others, but nothing was ever really done about it. So I welcome very much that that is now happening.
There are some issues, however. What worries me is that these things are done so often in a piecemeal fashion. We had the C and D changes in 2009, and we are having these B3 changes now. It is extremely important that there is a regular review of these issues, and that the state of economics of bingo clubs and AGCs is regularly examined. They are an important part of the amusement economy—indeed, the seaside economy. I note that the Minister in the other place is a Member of Parliament who represents a seaside town. It is very important that there should be regular reviews. I believe that a regular stakes and prizes review used to take place. I do not know whether it is planned to reinstitute that on, say, a regular three-yearly basis. There seemed to be some hint in what Mr Penrose said in the other place that that might be the case. However, it is important, if possible, to make that commitment.
Review is also important to see the impact that these new machines will have, not only on the establishments but on the public’s gambling habits. It was notable from the debate in the other place that there are differences of view over the impact of this order on the sheer number of machines that might be introduced. There was clearly a wide discrepancy between the Government’s quite low figure of 3,000 extra machines and the figure cited by others, which was considerably higher.
There is also the question of which other establishments should be able to benefit from changes in machines. Not everybody goes to bingo halls or AGCs. Snooker halls have also come up in debate. I hope that the Minister and her colleagues in the DCMS will also consider that issue.
Finally, one thing puzzles me. I think that this is a sensible order and the right way to proceed. However, it appears that the Gambling Commission has a different view on how these additional B3 machines should be calculated. It would be helpful if the Minister could explain where the Government differ from the Gambling Commission, and why they have decided not to accept its advice in these circumstances.
Lord Moynihan
My Lords, I also support the government proposals before the Committee. I echo the comments of my noble friend about the effectiveness of BACTA, the trade body for the British amusement industry. It is good to see highly professional trade associations working with small, family-run businesses, many of which are based at the seaside and more than 500 of which are members. BACTA does excellent work and has done so for several years.
What struck me about the Minister’s speech was that she looked at the economic impact over the past five or six years; indeed, she went back as far as 2006 at one stage in her statistical analysis. Over the past five years, the reality is that the serious decline has happened in the past two years. In other words, the economic impact of this is getting more and more serious. We can see that from the background against which, over the past two years, there have been approximately 200 arcade closures, representing some 800 job losses. However, there are many more than those 800 when you consider the part-time nature of positions over the summer. In addition to the loss to local businesses, there is a direct knock-on effect on related enterprises such as souvenir, gift and high street food and beverage shops, many of which are based in seaside resorts. The life-blood of those seaside resorts is local businesses—those gift shops and high street shops. It is good to note that the work being done by so many of these small, family-run businesses at the seaside generates local activity and employment.
However, those businesses are under very serious economic constraints, because of which the Prime Minister made a pre-election pledge to throw a lifeline to the traditional British amusement industry by reversing changes made under the Gambling Act 2005 to the operation of amusement machines. These proposals give effect to that pledge and would see a return of a maximum stake for category B3 machines from £1 to £2, as the Minister said, and an increase in machine entitlement to 20 per cent of machines sited, or four machines, whichever is the greater. According to some of the estimates in the impact assessment, this small change that the Committee is considering would raise in the order of £8.3 million for the industry. I ask my noble friend: is that the correct figure? If so, the financial assistance will alleviate some of the pressures threatening the industry since the introduction of the Gambling Act 2005, and other economic pressures felt by the sector. I therefore support the measures.
Out of interest, I ask the Minister whether, given the proposed increase, the next generation of machines will have the capacity to take a £2 coin, or will we have to plug in two £1 coins? We have not touched on the related issue of whether the Government are considering increasing the prize limit from £500 for category B machines in the future and, if so, when.
I thank my noble friend for her comments—it was, again, another eloquent opening speech. I emphasise that given the speed of economic decline in this sector it would perhaps be of value to the Government in the future to revise the levels we are talking about today on a more frequent basis than they have done in the past.