PARLIAMENTARY DEBATES

HOUSE OF COMMONS

OFFICIAL REPORT

Fifth Standing Committee on Statutory Instruments, &c.

GAMING ACT (VARIATION OF FEES) SCOTLAND ORDER 1989

Wednesday 26 April 1989

LONDON

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1

The Committee consisted of the following Members:

Chairman: SIR JOHN STRADLING THOMAS

Brown, Mr. Ron (Edinburgh, Leith)

Burt, Mr. Alistair (Bury, North)

Carrington, Mr. Matthew (Fulham)

Douglas-Hamilton, Lord James (Parliamentary Under-Secretary of State for Scotland)

Favell, Mr. Tony (Stockport)

Gorst, Mr. John (Hendon, North)

Hood, Mr. Jimmy (Clydesdale)

Knapman, Mr. Roger (Stroud)

McKelvey, Mr. William (Kilmarnock and Loudoun)

Maclean, Mr. David (Penrith and The Border)

Mans, Mr. Keith (Wyre)

Marshall, Mr. David (Glasgow, Shettleston)

Michie, Mrs. Ray (Argyll and Bute)

Monro, Sir Hector (Dumfries)

Montgomery, Sir Fergus (Altrincham and Sale)

Mudd, Mr. David (Falmouth and Camborne)

Wilson, Mr. Brian (Cunninghame, North)

Wray, Mr. Jimmy (Glasgow, Provan)

Mr. J. R. Rose, Committee Clerk

2
3 Fifth Standing Committee on Statutory Instruments, &c. Wednesday 26 April 1989

[SIR JOHN STRADLING in the Chair]

GAMING ACT (VARIATION OF FEES) SCOTLAND ORDER 1989

10.30 am

Motion made, and Question proposed, That the Committee has considered the Gaming Act (Variation of Fees) Scotland Order 1989.—[Lord James Douglas-Hamilton]

Mr. Donald Dewar (Glasgow, Garscadden): This is an interesting little order, which touches on a sensitive area of public policy. The Minister should explain what lies behind the variation of fees. Is it simply a fiscal update, or is an element of public policy involved? Do the Government have a positive or negative attitude to the gaming industry? I apologise to the Committee, as I am not a member of it, although I am entitled to speak. I also apologise for the absence of my hon. Friend the Member for Cunninghame, North (Mr. Wilson), who has been called unexpectedly to Scotland. I am a late substitute off the bench. However, the Opposition do not wish the order to be nodded through, despite that disadvantage. Perhaps a straight inflation factor has been applied in the order, but it would help the Committee if the Minister commented on the system and history of the charges. Are they an attempt to recover administrative costs or is there an element of taxation? We are dealing with large sums of money. The cost of the issue of a machine certificate has gone up to £2,250—a significant sum. I assume that that relates to gaming and fruit machines in golf clubs, public houses and other public places.

Mr. John Maxton (Glasgow, Cathcart): Labour clubs.

Mr. Dewar: As my hon. Friend has reminded me, such machines may even be found in Labour clubs and other such admirable organisations.

Mr. William McKelvey (Kilmarnock and Loudoun): And Liberal clubs.

Mr. Dewar: Yes, even Liberal clubs. I have never been on the committee of such an organisation, but I believe that the machines are extremely profitable. That may be reflected in the certificate fee of more than £2,000. Was the profit margin considered in drafting the order? Clearly, the Minister cannot give an average return figure for the machines, because the number of coins that are put in is infinitely variable, but how are the machines controlled? Is it by profit margin on the rate at which coins are put through? What profit margin would such a machine be likely to produce? A substantial charge is to be levied for a gaming licence under subsection (3)(a) and (4)(a) of the schedule to the order. I appeal to the Minister, in sackcloth and ashes, to explain the difference between the gaming licences covered by the two subsections. I assume that they relate to different types of gaming licence. 4 I see some intelligent and interested faces on the Conservative side of the Committee. I always think that, because of their lifestyle and range of interests, Conservative Members are more familiar with gambling than Opposition Members. That may be a calumny, but there are tall tales about their attachment to the turf and the Government's inability to get a full turn-out on those significant days in the year when green-swards are paraded on in fancy regalia. My serious point, however, is that Conservative Members may know a good deal about the mechanics of gambling. The Minister should explain the differences between the various types of gaming licences referred to in the schedule. The increase from £25,000 to £28,000 is substantial. To my modest eyes, that is big money, although it may represent only a small additional cost in the normal profitability of a well-established betting shop. The Minister whom I do not regard as a typical gambling man, will no doubt be happy and, I trust, willing, to fill in the details.

10.36 am

THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (Lord James Douglas-Hamilton): I am grateful to the hon. Member for Glasgow, Garscadden (Mr. Dewar) for his last remark. The order contains no element of taxation. The cost for granting a casino licence rises from £25,000 to £28,000. The cost of a certificate for the sale or supply of gaming machines rises from £2,000 to £2,250. The order increases the fees payable for casino and bingo club licences; for certificates for suppliers of gaming machines; for certificates of approval of those who wish to work in the gaming industry and for the registration of members' clubs. There is an identical order covering England and Wales which has not been prayed against. The fees are intended to meet the costs of administering the legislation on gaming which fall on the Gaming Board for Great Britain and the local licensing authorities. During the passage of the Gaming Bill in 1968 Parliament was given an assurance that the costs would be met fully by the fees charged for licences and certificates and would not fall on the taxpayer. The Gaming Board for Great Britain, which was set up under the Gaming Act, is charged with maintaining a general oversight of the extent, character and location of gaming facilities. More particularly the duties of the board are to investigate the trustworthiness of applicants for licences for commercial gaming, to approve gaming operatives, to advise on regulations to be made under the Gaming Act, to provide advice to licensing authorities and, through its inspectors, to assist the police in the detection of breaches of conditions or of fraudulent play in licensed gaming clubs. The board also has functions in relation to lotteries under the Lotteries and Amusements Act 1976. At the time of the Gaming Act, Parliament was greatly exercised by the probable or, in some cases, actual invasion of the gambling scene by criminals and criminal syndicates. That is the point of public interest to which the hon. Member for Garscadden referred. The Gaming Board's powers were designed to stop that invasion. It has accomplished and continues to undertake that task with great success. The board comprises a chairman and four members, and its staff of 84 includes 35 inspectors.

Mr. Dewar: Who is the chairman?

Lord James Douglas-Hamilton: The chairman is Mr. Norman Ward Jones. a solicitor who first became a member 5 of the Gaming Board in March 1984. The hon. Gentleman will be reassured to hear that Scotland is well represented. One of the members of the board is a Scot, Mr. Norman Hunter Smart, who is a past president of the Institute of Chartered Accountants of Scotland. Of the 115 casinos operating in Great Britain, 12 are located in Scotland. The total "drop"—the term used for money exchanged for chips—for the financial year ending in March 1988 was £1,722 million. The drop for Scotland was £70 million. The total sum retained by casinos as the house win was £334 million, of which Scotland accounted for more than £11 million. As at 31 March 1988, 1,115 bingo clubs were licensed under the Gaming Act; £556 million was staked on the game—an increase of 7.5 per cent, on the previous year, which was well ahead of inflation. The number of jackpot machines installed in premises licensed or registered under the Gaming Act has increased, together with amusement with prizes machines, found in public houses, cafes, arcades and other centres. In 1987–88 inspectors made 1,754 supervisory visits to casinos', and 3,265 visits to licensed bingo clubs. Certificated gaming machine suppliers had 621 visits. More than 4,000 certificates of approval for gaming industry employers were issued by the board. I have referred to only part of the vast work undertaken by the Gaming Board and its staff, which must be financed through fees. The cost to the licensing authorities of issuing licences under the Gaming Act must also be met. It is estimated that more than 8,000 licences will be dealt with in 1989–90. Some will be new licences for casinos or bingo clubs, but the majority will represent renewals. The hon. Member for Garscadden wanted to know about the increases in fees. They were previously increased in April 1988 and the new fees represent a further increase of 16.4 per cent. The rise is principally attributable to increases in costs outside the board's control. They take into account a projected increase in staff costs and heavy increases in accommodation costs.

Mr. McKelvey: Things have obviously changed since I was on a local authority and was a member of its licensing board. Presumably, district councils no longer collect the money from gaming machines or issue licences for them?

Lord James Douglas-Hamilton: I shall try to answer the hon. Gentleman's question before I sit down. I shall need to check the facts on that point. Within the general requirement that the income from fees should cover costs, fees for particular functions should reflect the precise costs of the work involved in them. There should be no over-charging by the state. That can be difficult because, historically, there has been an element of subsidy in cost allocation from the rich sectors of gaming to the less profitable. Opposition Members should know that Scottish casinos benefit from that because high rollers are more common in London. In addition there must be an element of estimation rather than precision in attributing the costs of general activities. Sharpening the accuracy of specific fees is a continuing process. The increases are spread across the board, but it has been possible to give particular attention to fees that, at their current levels, are out of step with the work involved. For example, the licence transfer fee has been brought closer to the level of the renewal fee as the same amount of work is 6 involved. The scale of the increases must be examined in the light—

Mr. McKelvey rose—

Lord James Douglas-Hamilton: I shall give way to the hon. Gentleman in a moment. The scale of the increases must be looked at in the light of the enormous profits made by gaming operators. Significant cash increases for casino and bingo licences should not cause difficulties. Casino proprietors enjoy high profits and the fortunes of licensed bingo clubs have improved in recent years. I can now tell the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) that licensing authorities in Scotland are the district councils. They both collect and retain fees.

Mr. Maxton: Is there a difference between clubs devoted exclusively to bingo, and clubs that regularly play bingo among other activities? Do both require licences?

Lord James Douglas-Hamilton: The hon. Gentleman asks a question that involves legal interpretation of what is or is not technically a bingo club. I suggest that he seeks legal advice on that question. Should he require me to make detailed inquiries or to examine a constituency case, I should be pleased to write to him. At present, I do not wish to provide a precise definition as it is not my function to give free legal advice, even to the hon. Gentleman.

Mr. Maxton: I am sure that the only legal advice that the Minister has ever given has been unpaid. Every city has its bingo halls, which must be run as clubs where an entrance fee is payable, but there are also different clubs. Cathcart constituency party, for example, owns a Labour club in which bingo is played—with members paying for bingo cards—almost every night of the week. Do such clubs require a licence and, if so, at what cost?

Lord James Douglas-Hamilton: Registered clubs can play bingo, but the licence costs only £145. I hope that the hon. Gentleman does not find it excessive. No arguments have been produced to convince me that the order should not apply in Scotland in the same way that the equivalent order applies in England and Wales. It would be illogical and unfair if different fees applied in different part of the country for identical work which is carried out on a Great Britain basis. I commend the order to the Committee.

Mr. Dewar: I am grateful to the Minister, though rather surprised about his modesty in not venturing a legal opinion. I recognise that the Faculty of Advocates requires its palm to be crossed with silver for such forays, but the Minister is semi-retired, hurt, from that faculty. I had hoped that expert advice, which I presume that the Minister has had—because I know that one small head could not contain so much information about gambling without an artificial stimulant—would have prompted him. However, he did not wish to go into the business of legal definition, and that is a disappointment with which I must live.

The Chairman: The hon. Gentleman is perhaps referring to a quotation by Oliver Goldsmith: "And still they gaz'd, and still the wonder grew, That one small head could carry all he knew."

7

Mr Dewar: I am not sure that that is an appropriate quotation when we are contemplating the activities of the Party Under-Secretary. However,we should return to the issue of variations. I am grateful to the Minister for the information that he has given, but I am not reassured by the fact that a Mr. Norman Hunter-Smart, with whom I am unfamiliar, is a member of the board. I recognise that it is Government policy for Scottish interests to be represented on such boards. Mrs Anna McCurley, an ex-colleague, is now decorating—I am sure that she would not object to that word—the Horse Race Betting Levy Board despite the fact that horse racing is a subject in which she evinced little interest during the earlier stages of her life. But I make no complaint about that. I should like the Minister to address his mind to the need for a separate order for Scotland. I am a great defender of the distinct Scottish legislative system within the Westminster set-up. It is anomalous, however, to have a body that operates on a United Kingdom basis, while there is a different,statutory structure for setting the fees north and south of the border. Are the fees identical? Am I right to presume that Mr Reo Stakis will pay the same fees to operate a casino in Scotland as he will in England after the order has taken effect? I ask that question because it seems odd to go through the laborious process of considering separate variation orders to introduce a uniform fee structure. Has there ever been a difference between the fees in England and Scotland? That would be of interest to the Committee, which I congratulate on its full attendance. I see that, apart from the Minister and the ever-faithful hon. member for Dumfries (Sir H. Monro), there is a splendid collection of English talent taking an interest in a specifically Scottish variation order. I understand the difficulties. When the Committee was selected, the Whips no doubt thought that many Scottish Tories would still be engaged on the Committee considering the Self-Governing Schools etc. (Scotland) Bill, which sat all night. It will probably sit from now till eternity, if the Government have their way. The hon. Members for Altrincham and Sale (Sir F. Montgomery) for Falmouth and Cambourne (Mr. Mudd) and for Wyre (Mr. Mans) are all here. I do not know where their constituencies are, and I take no pride in that. It would be interesting to compare the different approaches north and south of the border. The Secretary of State for Scotland presumably decides independently of the Home Office what the fees in Scotland should be, though he may decide that they should not vary from those in England. The Minister said that the measure was intended to cover only the costs of operating the board, which I presume is based in London. He said that one reason for increasing the fees by 16.4 per cent. was the cost of accommodation. I suspect that Mr. Ward Jones and his Scottish henchman, Mr. Norman Hunter Smart, are sitting in an expensive property in the centre of London. I admit that there is much gambling in London, which probably has more casinos than anywhere else, but we could reduce the inflationary increase of 16.4 per cent. if the board's offices were in another part of the country, such as Wyre or Glasgow. The Minister should comment on the cost of accommodation in London. Could we not save a considerable sum and move the 84 employees out of central London as part of the process of the dispersal of the Civil Service and the quangos? We would strongly support that course of action. I am not being frivolous. The Minister has sought to justify an increase in the fees of which represent twice the 8 inflation rate. If that is due to accommodation costs, there must be a strong case for cutting those costs by moving into less fancy premises. The administration is probably largely conducted by post, so there is no reason for the board to be at a Mayfair address, although that may be thought appropriate for an up-market casino. The Minister said that casinos had a turnover of £1.7 billion in Britain, and £70 million in Scotland. That is a proper Presbyterian ration, as the Scottish casino turnover is half what would be expected if one were to assume a per capita ratio. The English profits of £334 million, against £11 million in Scotland, emphasise that. I am not, I hope, a killjoy, but I would not apologise on behalf of Scotland for those figures.

Mr. Maxton: Well, my hon. Friend is not exactly the life and soul of the party.

Mr. Dewar: I am a sort of red coat figure in the Scottish Labour group, bringing a Hi-di-Hi atmosphere to proceedings. The gambling industry is less important in Scotland than in England and that reinforces the need for a separate Scottish scale. I accept that I did not understand that the fees applied to the narrow category of gambling represented by casinos and gaming machines. However, I presume that they apply to gaming machines anywhere, whether they are in clubs or in pubs —

Mr. Ernie Ross (Dundee, West): Or in fish and chip shops.

Mr. Dewar: Apparently gaming machines in fish and chip shops are not unknown in Dundee. That underlines their ubiquity. The Minister said that the board issued about 4,000 certificates of approval for people working in licensed premises. I was not sure of the significance of that figure, but I presume that it referred specifically to casino staff. Will the Minister describe what character examination is undertaken, and what criteria must be met, before certificates of approval are issued? Those requirements have a direct bearing on administrative costs, and therefore on the uprating of fees outlined in the order. The examination of character may require no more than a simple check against the files of the central Scottish criminal records office, but it may call for something considerably more detailed. I should be interested to know. Ministers are fond of telling us that there is no public money other than taxpayers' money. I accept that the taxpayer should not be expected to subsidise the casino industry. I fully approve of the self-financing principle being applied to that industry and make no complaint about it, but the Minister still must explain why the increase in fees is so great. My hon. Friend the Member for Kilmarnock and Loudon (Mr. McKelvey) asked about the licensing of gaming shops and casinos. I confess that I am confused about that. I had always believed that the local authority was responsible for such licences and I understood the Minister to say that the licence money was collected and retained by the local authority. However, the general thrust of the Minister's remarks was that the central office of the Gaming Board had 80 or so employees beavering away. There is an obvious anomaly. If the local authority, as the licensing body, retains 9 the fees, what do the board's 84 employees do? How are they supported? I presume that they get an allocation from the revenue to pay for their expensive accommodation in London and their administration costs. The Minister must clarify the dividing line between the responsibilities of the local authority and those of the central office run, no doubt admirably, by Mr. Ward Jones since 1984, with the assistance of Mr. Norman Hunter Smart, whose splendidly Scottish name we all appreciate. This is not a major issue, which will worry the Chancellor of the Exchequer. But a rise of 16.4 per cent. is substantial and is another, albeit minor, example of an increase that has been imposed by the Government in clear breach of inflationary guidelines. It underlines the importance of my questions about the location of the board's offices and its administrative expenses. The Government must explain the board's actions further before the Opposition give the order a fair wind. I do not wish to be thought discourteous, but I must leave the Committee now as I have an urgent appointment elsewhere. I know that that is unusual, but I was a late substitute for my hon. Friend the Member for Cunninghame, North (Mr. Wilson). I shall ask my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) to watch the rest of the proceedings in my stead, and I shall, of course, read what the Minister says when the record of today's sitting appears in the Official Report. If there are still loose ends to tie up, further correspondence might be necessary. I am delighted to see the hon. Member for Argyll and Bute (Mrs Michie) in committee. However, I suspect that there are not too many casinos even in Oban, that major playground of the western world. To be serious, it is a very pleasant town, however few casinos it possesses. As some individuals from every part of Scotland will occasionally use casinos, Scots are entitled to take a general interest in the gaming framework. I look forward to reading further contributions from the Minister and indeed from other hon. Members.

11.00 am

Lord James Douglas-Hamilton: I am grateful to the hon. Member for Glasgow, Garscadden (Mr. Dewar) for raising interesting points. I should first explain that the lead Department for gaming matters is the Home Office. The practice of making separate orders north and south of the border goes back over 20 years on the view that, where the Secretary of State carries responsibility for an activity or for some aspect of Government administration in Scotland, orders applying to Scotland should be signed by Scottish Ministers. The fee structure is the same north and south of the border, although the system is not identical. The English local authority remits fees to the Exchequer, with the board receiving a grant-in-aid. The hon. Member for Cathcart said that he agreed that costs should be borne by gaming interests rather than become a general charge on the taxpayer. That is the purpose of the order. He also raised an important point about the Gaming Board's accommodation costs, which totalled £552,547 in 1988–89. Of that, £470,000 was estimated to be the cost for Berkshire house, the board's headquarters. Consideration is being given to relocating the board's headquarters to outer London or elsewhere. Staff are employed in Scotland. The Edinburgh office is located in Princes Street and houses a senior inspector, an 10 inspector, and an administrative officer. There are other centres in Bristol, Nottingham and Manchester. Staff arrangements are tightly controlled and reviewed to ensure that sums to be met by fees are not inflated by inefficiencies. I was also asked which fees went to the Gaming Board and which to district councils. Fees for the issue and renewal of gaming machine certificates, and for employee approval certificates go to the Gaming Board. Fees for other licences go to district councils in Scotland. I am grateful to hon. Members for their spirited contributions to our short debate.

11.03 am

Mr. McKelvey: The Minister has sat down in undue haste, which makes me suspicious of his intentions. As so often with orders, it is only when the stones are lifted that things underneath begin to move about. The Minister has been bland about what amounts to a swingeing increase in costs.

Mr. David Marshall (Glasgow, Shettleston): An increase of 16.4 per cent.

Mr. McKelvey: That might be the average figure but it conceals a big variation, dependent on the type of licence issued. The Minister claims that fees for the renewal and transfer of licences have been brought closer together, but that is not the case. The figures at present are £5,000 and £4,500 respectively—a difference of £500. The new figures will be £6,000 and £5,000 respectively—still a £500 difference. It could be argued that there is a difference in terms of the ratio, but in monetary terms the difference remains the same. Why were not the two sums made equal to save further legislation? Which areas of responsibility are to be retained by local authorities? The Minister should comment on costs, because he dealt with them rather quickly. He said that the cost of accommodation in London was £522,547.

Lord James Douglas-Hamilton: I said £470,000.

Mr. McKelvey: The Minister mentioned a figure of £522,000.

Lord James Douglas-Hamilton: The figure of £522,000 is for total accommodation costs in Britain. The board's headquarters account for £470,000. We are considering relocating the headquarters outside London.

Mr. McKelvey: Do those figures include wages? What are the wages and how will they be increased in the light of the order? The 16.4 per cent. increase is large by any stretch of the imagination. What will the increase be used for? Does the Minister expect organisations such as that of Mr. Reo Stakis—who has a large interest in Scotland—to bear the cost of the increase? It should not be passed on to the punters. There is room for the industry to bear the increased cost, considering the vast profits that can be made from gambling. The other increases, such as the rise to £2,250 for an intitial licence for a gaming machine in a club, mean that the clubs will have to find that additional money. I hope that the cost will not be passed on to those who go to such clubs. Despite large profits, the gambling industry's costs are rising. We must be careful not to kill the goose that lays the golden egg. We cannot increase the cost of gaming licences 11 by 16 per cent, every year simply because the industry is lucrative and employs many people on both sides of the border. We would all agree that the money from the gambling industry should be used to make the administration of that industry self-financing. However, we should not create additional quangos simply because the money is available. How many people were employed in the gambling industry's administration last year and in the year before? How many are expected to be employed in it next year? The Opposition believe that there is an excellent opportunity to move the headquarters and staff to the healthier location and environment of Scotland. I should not want the staff to be deprived of their jobs, and I should expect the Minister to attempt to bring those people north of the border. They would benefit from such a change. It is difficult to make comparisons without having a copy of the Gaming Act 1968 on hand. I hope that the next time that we discuss the matter, copies of that Act will be provided, so that we can make camparisons with the relevant section.

Lord James Douglas-Hamilton: The hon. Gentleman suggested that the fees should reflect the precise cost of the work involved in collecting them. As I mentioned earlier, there can be an element of subsidy in cost allocation from the very rich sectors of gaming to the less profitable. The figure for salaries and wages in Great Britain is £1,088,697. The figure in Scotland is £72,547. The precise number of staff employed is 84½, which I presume means that somebody works half-time. I understand that that situation is likely to continue. The hon. Gentleman also asked whether the costs will be borne by the gaming interests. They will, and they will not be passed on to the punter. The cost of the machine certificate is met not by the clubs but by the machine manufacturers. In response to the hon. Gentleman's remarks about the effectiveness of the Gaming Board's operation throughout the country, I can tell him that, in addition to the Edinburgh office, one inspector works from home in Glasgow and covers the Strathclyde region, while another works from home in Aberdeen and covers the central and northern areas.

11.11 am

Mr. David Marshall (Glasgow, Shettleston): I am not sure about a couple of matters and should be grateful for the Minister's clarification. The accent so far has been on casinos, but presumably the figures apply to all sorts of premises, such as small clubs, shops that run bingo and other amusements with prizes or small amusement arcades, which can be found in many towns and cities. Will they have to pay the new fees? For many small organisations, an average increase of 16.4 per cent, is substantial. It is well above even the current rate of inflation. All hon. Members have small clubs in their constituencies. Many of them have been set up by such peopole as anglers or bowlers who have taken up a pursuit as a hobby. There are also Masonic halls, premises that belong to the Knights of St. Columba, trade union clubs and all sorts of social clubs. Not all of them make a profit: indeed many of them struggle to survive. The Minister is aware that junior football is very popular in Scotland, and there are three such clubs in my constituency—Baillieston Juniors, Shettleston Juniors and Vale of Clyde Juniors which has been in existence for more than 100 years and is Scotland's oldest junior club. Some of those clubs have a hard time surviving, and if they run a couple of gaming 12 machines, an increase in the fee for machine certificates of £250 per machine will cost them £500. That is a lot of money for a small club. The Minister said that there was one board inspector in Scotland. How many visits did that inspector make to casinos and clubs? Is one inspector for the whole of Scotland sufficient for the monitoring and inspection necessary to ensure that the Act is not being violated?

Lord James Douglas-Hamilton: In Scotland there were 164 visits to casinos, 356 visits to licensed bingo clubs, and 34 visits to certificated machines.

Mr. Marshall: All carried out by the one inspector?

Lord James Douglas-Hamilton: There are two inspectors.

Mr. Marshall: I apologise. Even so, is the Minister still happy with the number of inspectors in Scotland? Should not more visits and more inspections be made?

Lord James Douglas-Hamilton: I believe that there are sufficient inspectors in Scotland. However, I remind the hon. Gentleman that the certificate fee for the machines that he is talking about has not been increased. It is still £25 per machine. The fees that have been increased apply to casinos, bingo clubs, registered clubs and machine manufacturers.

Mr. Marshall: Will the Minister clarify the position of prize bingo in small premises? I am talking not about former cinemas that are now large bingo halls but about the small shops that run amusement-with-prizes bingo. Does the order apply to them?

Lord James Douglas-Hamilton: The order applies only to registered clubs. The enterprises referred to by the hon. Gentleman may be too small to come under that classification.

11.14 am

Mr. Maxton: I should declare an interest, as my constituency Labour party owns a club. It is run separately, as licensing rules demand, and it has gaming machines from which considerable sums are taken. Some of that money helps to pay my election expenses. The Minister may say that the increased cost of machine certificates will be borne by manufacturers, but they will pass on any increase to users. My hon. Friend the Member for Glasgow, Carscadden (Mr. Dewar) was perhaps wrong to suggest that the Minister had no interest in gambling. There is one room in Brodick castle—now owned by the National Trust—which is almost entirely devoted to racing pictures and the trophies won by the Dukes of Hamilton. The Minister is a scion of that line, and his family, if not himself, have had considerable interest in gambling—at least on horses. Are gaming licences for casinos.the same regardless of the size of the casino? I think that there are plans to build a complex of restaurants and licensed premises at Newhouse in Lanarkshire. Those premises may include a casino —which would be large and profitable. Would a gaming licence for someone such as Reo Stakis cost the same as for someone in, say, Rothesay who might want to set up a small operation to bring in a few more tourists? The cost of a licence should relate to the profits made by the organisation 13 that holds the licence. I have some regard for the Stakis organisation and what it has done to provide facilities for Scottish people, although it has gambling operations. I would not say that there is a connection between that organisation and the Scottish Office, but I notice that the press officer of the Stakis organisation is Mr Alex Pagett. He has previously been press officer to the Scottish Office and to the Tory party in Scotland. I am sure that there is no connection whatever betweeen the three organisations. I simply make the point. Licence costs should vary according to the size of the organisation. The Minister seemed to suggest that a certificate of approval had to be issued to anyone seeking a job in the gaming industry, whether in a casino, gaming machine manufacturers or gambling generally, to say that he or she was fit to be involved in that industry. That is proper. Most of the gaming industry is highly respectable and run by respectable people, but criminals want to be involved in it and are attracted to its fringes. Compared to the United States where the Mafia seems to run the gambling industry, this country has done a good job in minimising the involvement of the criminal element. But is the certificate designed to ensure that the right people enter the industry? What level of vetting is carried out by the inspectors? Does someone with a criminal record have no chance of a job in the gaming industry? Is that person excluded entirely, or does it depend on the nature of the criminal record? The Minister said that the Gaming Board and the local authorities were responsible for lotteries as well as casinos and gaming machines. I accept that the Government have not raised the lottery fee, but does a lottery also require a licence? Many organisations, such as charities or football supporters' clubs, raise considerable sums through lotteries to finance their good work. If there are licences for lotteries, which licences are they and how much do they cost? Why has the fee for such licences not been raised, or did the Minister consider that unnecessary?

11.21 am

Lord James Douglas-Hamilton: The registration fee for a Labour club has risen from £135 to £145. Renewal of registration has gone up from £60 to £70. There are 12 casinos in Scotland: Dundee and Aberdeen have two each, while Glasgow and Edinburgh have four each. All casinos pay the same fee, as the amount of work involved is about the 14 same in each case. The hon. Member for Glasgow, Cathcart (Mr. Maxton) spoke about the attraction of the gaming industry for the criminal element. The Gaming Act 1968 was passed to keep that element at bay. The implementation of that legislation incurs administrative costs for the licensing authorities and the Gaming Board which are met by income from the fees payable under the Act. The hon. Gentleman also asked about the interviews conducted by the board's inspectors, as did the hon. Member for Glasgow, Garscadden (Mr. Dewar). Page 16 of the 1987–88 report from the Gaming Board for Great Britain states that 236 interviews were held. The report goes through the interviews in detail, and notes instances of revocation of licence without interview. The board's procedures are stringent, and it deserves congratulation on the extent to which it has succeeded in excluding criminal activity from gaming.

Mr. McKelvey: Are bookmakers' licences covered?

Mr. Maxton: And lotteries?

Lord James Douglas-Hamilton: Bookmakers' licences are covered. Licences are required for lotteries in Great Britain. A fee of £ 100 for initial registration with the Gaming Board is payable by the promoter of the lottery where the total value of tickets or chances that may lawfully be sold does not exceed £10,000. The fee is £350 where that value exceeds £10,000. The hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) asked about betting shops. He can reassure his constituents that the fee for bookmakers' permits is not the responsibility of the gaming authorities and is therefore not being increased.

Question put and agreed to.

Resolved, That the Committee has considered the Gaming Act (Variations of Fees) Scotland Order 1989.

Committee rose at twenty-four minutes past Eleven o' clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Stradling Thomas, Sir John (Chairman)

Burt, Mr.

Carrington, Mr.

Douglas-Hamilton, Lord James

Favell, Mr.

Gorst, Mr.

Knapman, Mr.

McKelvey, Mr.

Maclean, Mr.

Mans, Mr.

Marshall, Mr. David

Michie, Mrs. Ray

Monroe, Sir Hector

Montgomery, Sir Fergus

Mudd, Mr.

The following also attended, pursuant to Standing Order No. 101 (2):

Dewar, Mr. Donald (Glasgow, Garscadden)

Maxton, Mr. John (Glasgow, Cathcart)

Ross, Mr. Ernie (Dundee, West)