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10.44 am

John Thurso (Caithness, Sutherland and Easter Ross): May I begin by picking up on the excellent point made by the hon. Member for Aberdeen, South (Miss Begg)? I learned this morning that a number of women in the company that I left shortly after the election had become victims, after my departure, of the scheme to which she referred. They have lost quite a lot of money. These are intelligent, hard-working, professional women and, as the hon. Lady said, it is the excitement, the party atmosphere, and, possibly, having a few glasses of wine, that makes it far more a gamble than anything else.

The hon. Lady was right to mention that those who perpetrate these schemes pretend that it is an investment, which it clearly is not. I would say that it is not even gambling, as there is almost no hope whatever of winning. The hon. Member for Ryedale (Mr. Greenway), with his police background, would probably be able to advise us of the proper term for it, but it is probably fraud and obtaining money by deception. The Government should take note of that, and I hope that they will take it on board. The hon. Lady might like to consider submitting a short

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memorandum to the Select Committee on Culture, Media and Sport. I see other members of that Committee in the Chamber, whom I think were equally struck by these schemes, and we may want to include them in our report.

I am pleased that we have this opportunity to discuss the Budd report and the Government's response to it. I congratulate the Government's business managers on having it brought forward—like the hon. Member for Ryedale, I am sorry that the debate is on Friday; it would have had an even greater attendance had it been held between Monday and Thursday. We should be grateful, however, and I am delighted that we have the debate. It might have been better to hold it a little later because the Culture, Media and Sport Committee's inquiry is at an advanced stage. I anticipate that its report will be available in the not-too-distant future. I hope that it would have added to our debate.

Notwithstanding that, I warmly welcome the Budd report, which was excellent. It dealt with the issues in considerable detail, as well as the many recommendations that were put forward. I congratulate the Government on their response to the report, which, in the main, was measured, and showed that there is considerable agreement in all sectors and in all parts of the House on the recommendations and any eventual legislation.

It is clear that the gambling legislation needs to be reformed because it is a piecemeal agglomeration from the 1960s. That alone would be a significant reason for reform, but there is another reason. A significant change in attitude has taken place since the 1950s and 1960s, when gambling was fairly frowned on. It was tolerated in the sense that, if people had to do it, they could do it somewhere fairly uncomfortable. Today, however, it is broadly recognised as an acceptable leisure pursuit, and it is therefore right that regulation should be relaxed.

Budd appropriately considers first principles, and that is where our debate today should begin. I am glad that the Minister referred to that. Clearly, there is a balance to be struck between the individual freedom that any person may have to do what they choose, and the appropriate control of an activity that clearly has a downside. A difference also exists between the rights of individuals to enjoy gambling in good premises that are well looked after and properly protected and the rights of companies. I do not think that companies have a right, as such, to offer gambling; they are permitted to offer gambling provided that they obey the rules that are set out and operate in a fit and proper, generally responsible way. There is a difference between what individuals are entitled to do and what companies should be permitted to do.

The central thrust of the report is the way in which gambling is to be controlled in the future. Liberal Democrats welcome the concept of a single regulator—a gambling commission—to bring all the central issues together. The key principle behind that is set out in paragraph 1.9 of the Government's response, which says:

I am sure that we all agree that such principles should be the basis for regulation.

I may not look it, but I am just old enough to remember reading the newspapers in the 1960s. I remember the stories of the Krays and the Richardsons and the problems

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that surrounded gambling. It is imperative that we exercise a certain caution as we relax the legislation to ensure that there is no chance of those days returning.

We should also pay regard to the sophisticated money laundering that now takes place. I am not sure where I learned this, but I believe that the best and cheapest way to launder money is through an on-course bookmaker. In considering the relaxation of the legislation, it is important to ensure that we do not allow money laundering activities to increase. The punter should be able to play an honest, fair and open game with a clear knowledge of what he can win and lose.

Of the three key principles stated in the Government's response, the protection of children and of those who suffer from gambling are at the top. The proposals for a single controlling body will go a long way to help to achieve that aim. The gambling commission must set out clearly the rules that will be applied to the individuals who take part in gambling and stipulate the basic requirements for each premises. In particular, I welcome the proposal for increased application of the fit-and-proper test to people involved in offering gambling activities.

Clearly, there is tension between the central and local provisions for the licensing of premises. I welcome the move away from licensing justices to licensing authorities. It is an essential part of local democracy that elected people can be held to account for the decisions that they take. I was a licensee in England and I owned a licensed premises in Scotland, so I have seen the workings of licensing justices in England and licensing local authorities in Scotland in relation to places that sell alcohol. There is no substantial difference between the two. One is as likely to get a good local authority as a bad one in Scotland, and one is as likely to find good licensing justices as bad ones in England. Therefore, the question is not whether we should have licensing justices or licensing authorities, but how the legislation is passed and the instructions that are given.

A local authority, with the backing of its electorate, should be entitled to say that it does not want gambling in its area. Companies should not necessarily have the absolute right to intervene to offer gambling wherever they want if local people do not want it.

I welcome the increase in the use of the fit-and-proper test to deal with problem gambling and the move to place a duty of care on casinos. It is right that casino employees should have a duty of care. I am sure that they know when a person is a problem gambler, so the employers should be part of the solution and not part of the problem. In that regard, we would benefit from more research. I hope that the Minister will reflect, in the months before any legislation is introduced, on what research can be undertaken on problem gambling. That would give us a proper idea of its extent. There is not much research going on at the moment.

An industry trust is an excellent idea. A statutory levy would be better than a voluntary one because it would be clear-cut and laid down by Government with no one excepted from it. That is the best way for people to contribute. I accept that it is more likely that we will start with a voluntary levy, but I hope that we will have provision to make the levy statutory should the voluntary one not work.

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The lottery is clearly different from other forms of gambling; it is at the softer end of the spectrum. It also exists to deliver funds for good causes. I disagree with the hon. Member for Ryedale in that I believe that we should leave the national lottery with a separate and independent regulator, because there are many differences between it and the rest of the gambling industry. However, I happily accept that, in the fullness of time, my view may prove to be based on an incorrect assumption. I therefore agree with him that there should be provision in the legislation to bring the lottery within the remit of the central gambling commission should that become necessary. That is a sensible suggestion.

I would be unhappy to see side-betting on the lottery. I am convinced by the evidence that I have heard in the Select Committee on Culture, Media and Sport that that is dangerous. However, I am not convinced by Camelot's arguments about society lotteries. As has been said, they are an important way of funding a number of charitable causes, so we should be careful about over-regulation.

I welcome all the Government's suggestions about gaming machines and, as every hon. Member who speaks is likely to say, I welcome the proposals for members' clubs. I welcome the fact that the Government listened on that issue even if one sometimes needed a megaphone to make one's point. I also believe that the changes to category D machines will be good, but the reduction in the stake from 30p to 10p will make them a borderline economic activity. As my hon. Friend the Member for Southport (Dr. Pugh) pointed out, they might become uneconomic. It is another issue on which we should show flexibility.

On casino resorts, the Minister will be aware of my long connection with the tourism industry. Some seaside resorts, such as Blackpool, Brighton and Bournemouth, will have an opportunity to develop an exciting product that can help to regenerate their areas. However, I add a note of caution. We will not be able to create a casino resort in every county—there is not room to do that—so they will not be a general panacea that will attract tourists to all parts of the country. The Minister and the Department would therefore be wise to consider how best to manage the process. The worst of all worlds would be to have 20 seaside resorts simultaneously competing for business when there is not sufficient business for them all.

I am delighted that e-gambling and e-commerce will be brought within the law. Clearly, it is better to have them covered by UK law, as that will enable us to control them.

The Minister suggested that he hoped that legislation would be introduced in 2003–04. Four years ago, I remember being told by a Minister that he was hopeful of introducing legislation on alcohol licensing in the not-too-distant future. We are still waiting for that. I hope that the Department for Culture, Media and Sport has the resources and the power to introduce legislation on gambling, because many of the suggestions that have been aired have excited an appetite for change within the industry. If we do not have change, we will face problems.

It being Eleven o'clock, Mr. Deputy Speaker interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).

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