Casinos (Gaming Machines and Mandatory Conditions) Regulations 2025

Lord Bourne of Aberystwyth Excerpts

Tuesday 17th June 2025 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

My Lords, I am pleased to speak to these regulations, which were laid before the House in draft on 12 May. This instrument has been considered by the Secondary Legislation Scrutiny Committee and was not drawn to the special attention of the House. It is part of a package of statutory instruments that, together, make a number of changes to the legislative framework for land-based casinos.

If these regulations are approved by both Houses, I intend to sign two related statutory instruments that follow the negative procedure: the Gambling Act 2005 (Commencement No. 6 and Transitional Provisions) (Amendment) Order 2025 and the Gambling Act 2005 (Premises Licences and Provisional Statements) (Amendment) (England and Wales) Regulations 2025. The former extends existing casino entitlements, and the regulations we are debating today introduce protections—equivalent to those for 2005 Act casinos—for converted casino premises as a result of the extended entitlements.

The premises licences and provisional statements regulations amend existing procedures so that a converted casino operator can apply to its licensing authority to vary its premises licence to enable it to exercise the extended entitlement. We published the negative instruments in draft on 12 May, the same day that these regulations were laid, to provide transparency about the range of changes we are proposing and to allow for proper scrutiny. None of the interconnected legislative instruments will be made unless the protections in these regulations are approved by Parliament.

The Government are focused on economic growth. I believe that enabling a responsible gambling sector to grow is compatible with creating an even safer one. We have already brought forward measures to improve consumer protections, including the introduction of stake limits for online slot games and establishing a statutory levy on gambling operators, to fund the research, prevention and treatment of gambling-related harms. Our manifesto also committed to working with industry to ensure responsible gambling, and we acknowledge the difficulties that land-based gambling businesses, particularly casinos, have faced since the Covid-19 pandemic. Therefore, following a consideration of the best available evidence, we intend to proceed with a series of reforms for the land-based casino sector.

Since being appointed, I have visited casinos and witnessed the contributions that they bring, with jobs, tax revenues and support for the night-time economy. The casino sector directly employs around 10,000 people, with many in non-gambling roles such as hospitality. Venues are often steeped in history and feature bars, restaurants and, in some cases, theatres. The sector generates £866 million in gross gambling yield each year, with up to 50% of this paid in gaming duty. We intend to implement measures that are estimated to increase this GGY figure by £53 million to £58 million.

Many of the restrictions that apply to land-based casinos derive from legislation that had not envisaged the rise of online gambling. In light of this, restrictions on product availability in casinos are now less important for protecting customers than factors such as the design of products and the quality of monitoring. We therefore intend to change the restrictions that apply to the supply of some products, giving casinos greater freedom about what they offer customers. None of this will be at the expense of protecting customers from gambling-related harm.

There are two types of casino licence. The first is for those who were already operating when the Gambling Act 2005 came into force, which I will refer to as “converted casinos”. The second are those created by that Act. The Act created two types of casino within this licence category, which I will refer to as “small casinos” and “large casinos”. Converted casinos are generally allowed only 20 gaming machines, or at least one is a category B machine, regardless of their size. This compares to up to 80 machines for small casinos and 150 for large casinos.

To support the sector, this package will give converted casinos the option of having the same gaming machine allowance as small casinos. For converted casinos with a gambling area that is smaller than the minimum required for a small casino—500 square metres—a sliding scale will apply for gaming machine allowances commensurate with their size. This will more closely align the rules for all casinos.

Converted casinos will have to abide by a number of strict conditions in order to increase the number of machines they offer. If they wish to site 80 gaming machines, they will need to meet the same size requirements as small casinos. This means that they must have a gambling area of at least 500 square metres, a non-gambling area of at least 250 square metres and a table gaming area of at least 250 square metres. They will become subject to a maximum machine-to-table ratio, meaning the number of machines in the casino cannot be more than five times the number of tables available for use. An additional protection prevents these casinos from siting more than 80 machines within casino premises that are connected to each other. Smaller converted casinos will be allowed to increase their gaming machine entitlement depending on their size. Their table gaming and non-gambling areas will need to be at least half the size of their gambling area.

These rules are vital to ensure that customers are offered a mixture of gambling and non-gambling opportunities when they visit a casino. The strict requirements on how much space can be allocated to each activity will mean that, even with an increase in the number of machines, casinos will not be overwhelmed with an electronic offering. This instrument also introduces a maximum gambling area for converted casinos. In allowing converted casinos a similar entitlement to small casinos, it is fair and consistent that they are subject to similar restrictions. Therefore, all converted casino premises will be limited to a maximum gambling area of less than 1,500 square metres, matching the maximum gambling area allowed for small casinos. However, a conditional exemption is made for casinos that currently operate with a gambling area of 1,500 square metres or more.

This package of instruments will also allow betting to take place in all converted casinos. The current regulatory framework prohibits these casinos from offering betting products, whereas venues licensed under the 2005 Act can do so. The prohibition makes little sense, as a casino customer can place a bet on their mobile phone while in the venue but not with the casino itself. This change will allow converted casinos not only to offer a new gambling product but to invest in other parts of their venues, such as sports bars. A limit would be put on the number of separate betting positions or self-service betting terminals that can be offered by the casino.

Finally, I draw the Grand Committee’s attention to two changes that this instrument will make to small casinos. They are currently required to comply with a maximum machine-to-table ratio of 2:1, whereby for every table in use, the casino is permitted to offer a maximum of two gaming machines. This ratio will be updated from 2:1 to 5:1, to align small casinos with large ones and to prevent operators from having to provide tables for which there is no customer demand. Small casinos are also currently required to have a minimum table gaming area of 500 square metres; as a result of these regulations, this requirement will change to 250 square metres. This will amend an anomaly whereby the minimum gambling area and minimum table gaming area were required to be of the same size.

This is a sensible package of measures that will update the outdated restrictions that currently apply to land-based casinos. It strikes the right balance between supporting the sector to grow, while still ensuring that those who visit these venues will be protected from gambling-related harm. I beg to move.

[Lord Bourne of Aberystwyth (Con)]

My Lords, first, I thank the Minister for setting out what is, in many ways, a very technical SI, as well as the two related SIs to which she referred.

I understand that a lot of the pressure and motivation —if not the only motivation—behind this measure is economic growth and the international competitiveness dimension. However, I certainly had some concerns on reading through the SI. Perhaps I am unique in this —I do not know—but it seems to me that the regulations would potentially alter the split between gaming machines and table-based gaming, which I think the Minister referred to, from 2:1 to 5:1. That is quite a considerable shift. The latter form, table-based gaming, represents a less intense gaming experience and is, I would argue, potentially less harmful to consumers. The Minister will know that 25% of casinos in this country are in the poorest decile of the country; we should therefore be concerned about the connection with gambling harm. Has there been a corresponding increase in space and opportunities for customers to take a break from gambling? There has been an increase in the space available for gambling machines. If there has been an increase in the areas for non-gambling, what is that increase, and what sort of facilities do these areas represent?

It is very clear in the analysis and the evidence that the annual increase in income for the gambling sector after three years is between £52 million and £63 million per annum—the gross gambling yield, I should say—with a median figure of £58 million. I recognise that that is obviously subject to costs and tax, but it still represents a considerable increase. Should we not at the same time be increasing the amount that is put aside to help with gambling addiction and gambling harm? There is no indication of that happening here in the measure.

If one looks at the theme of the analysis and the evidence, which I have done, it is quite clear. Page 4 of the impact assessment states:

“There is a risk that this measure increases the prevalence of gambling-related harm”.


Page 37 states that

“there is a risk that gambling harm will increase with the implementation of this measure”.

That is my concern: we should be doing something about that. I am not against the measure as such. Clearly, economic growth is desirable, but should we not at the same time be concerned about gambling harm, which it is quite clearly an ill in society, including in some of the poorest communities of the country?

[Lord Foster of Bath (LD)]

My Lords, I am absolutely delighted to follow the noble Lord, Lord Bourne. I share the concerns that he expressed. I am not going to oppose this statutory instrument but I want to raise some concerns about it, not least in terms of the potential impact on increasing gambling harm.

The Minister has been very generous with her time in speaking with me on a number of occasions recently; I am very grateful for that. She already knows that I have considerable concern about the Government’s current approach, which seems to suggest that, in the wider desire of the Government to increase the whole state of the economy in the country, they also want to grow the gambling industry as part of that. I have argued with the Minister—although I know that she disagrees—that it is simply not possible to grow the gambling industry without also having an increase in gambling harm, whereas she and the Government believe that it is possible both to grow the industry and to reduce the level of gambling harm. You would not increase the tobacco industry and expect it to reduce the consumption of tobacco; the same is true for products in the gambling sector. No doubt this debate will continue between me, the Minister and others over the coming months.

If I look at this statutory instrument, I have some real concerns about it. We have with it an impact assessment. A few minutes ago, the noble Lord, Lord Bourne, asked a simple question: could we have some more data about the length of time spent on these machines? He will be delighted to know that, on page 19 of the impact assessment, that data, which we are told is

“a useful insight into how customers currently play on gaming machines”,

is provided. Unfortunately, however, all of the figures are blacked out. We are advised that this is helpful information, yet it—together with many other bits that would be very helpful to us—is blacked out.

The noble Lord, Lord Bourne, is concerned about some of the parts of the report that talk about the possibility of these measures leading to increased gambling harm. Paragraph 2.68 says:

“Overall, the existing evidence on the causal link between increasing the number of gaming machines in casinos and harm is inconclusive”.


So it is not convinced. It goes on:

“Although we have data on gaming machine participation rates and harm, we are unable to confidently state the nature of the causal connection between the two”.


This evidence that we have, the most useful bits of it blacked out, suggests that even the Government are not sure about the level of harm.

Gambling Harm (Social and Economic Impact of the Gambling Industry Committee Report)

Lord Bourne of Aberystwyth Excerpts

Wednesday 27th April 2022 Grand Committee

[Lord Bourne of Aberystwyth (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Layard, and I found myself in much agreement with what he was saying. I pay tribute to the committee and particularly the chairman, my noble friend Lord Grade of Yarmouth, for the work it has done and the very balanced, erudite and compelling report it produced, Gambling Harm—Time for Action.

There is a widespread if not universal view that more action is needed, and urgently. Although I accept that there is a balance to be struck between the leisure aspect of gambling and the protection of the public, particularly vulnerable members of the public—we have heard the truly chilling statistics about young children problem gamblers—the scales at present are heavily weighted in favour of the betting industry, in broad terms. There is a need for action and the public health dimension needs accentuating more. I have the greatest respect for the Minister but DCMS and the Gambling Commission have been slow to act. They need to do much more, and much more quickly.

There is a need to protect the vulnerable much more. The committee heard clearly about the problems of debt, homelessness and relationship breakdown, career and work problems, and particularly the problems of depression and suicide, which should cause us all to stop and think. The betting industry makes considerable profits; I note what the noble Lord, Lord Layard, said about distinguishing the levy from the need for the NHS to step forward, but a 1% levy on the betting industry would generate £140 million per annum, which would help to fund some of the organisations doing such great work at present. But they could do far more and, on the “polluter pays” principle, I see no problem with saying that the betting industry should pay towards the treatment of addiction services so that we can improve them to the extent of having first-class services, which is what we really need.

As I say, the Gambling Commission and DCMS could be doing more. We need not to wait for legislation but to act urgently now. The fines and penalties are not sufficient in their impact on large corporations, as I think the committee found, and there is a need for increased powers for the Gambling Commission. It may be that that needs to wait for legislation, but I am not convinced that it does. I thank the LGA for its briefing on this, as local authorities need additional powers to stop clusters of betting shops in communities, and those would be very welcome.

Perhaps I may say something about the fast-changing nature of the gambling industry, which is why urgent and forward-looking action is needed. During the pandemic, we obviously saw a slowdown in relation to casinos and betting shops—indeed, a shutdown of them. That was temporary but meanwhile there has been a large growth in online gambling, which continues. It was of course happening before the pandemic started; between 2015-16 and 2018-19, online gambling grew by 18%. There has been a massive and continued growth online during the pandemic, as would be expected, and that continues with home working. That presents problems, particularly with the young who, as we have seen, tend to be more vulnerable. Action is therefore needed to stop the exacerbation of harm that we see in that area.

The Government and the Gambling Commission need to act decisively here and I very much agree with the noble Lord, Lord Layard, in relation to advertising. It contributes to and exacerbates the harm, and urgent action is needed on that. The Government need to extend the remit of the Gambling Commission to act to prevent future harm. As my noble friend Lord Grade said, the sharing of information on affordability problems and that exchange of data is crucial. Too often, in all areas, the excuse given is of the GDPR. I sit on the Select Committee on Public Services and we have heard the same thing: “We’re restricted on the exchange of information between government departments by the GDPR”—nonsense. This is not the case, or if it is it needs changing swiftly to ensure that the reason for the legislation is to protect personal freedom and data. It is not to stop the greater good that we need to step forward to do.

There is a need for urgent action and we should not wait for legislation. I look forward to hearing what the Minister has to say on that but it really is the time for excuses to end. The time for action is now.

Gambling Advertising

Lord Bourne of Aberystwyth Excerpts

Tuesday 1st March 2022 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, it is a great pleasure to follow my noble friend Lord Bethell, with whom I am in broad agreement. I congratulate the noble Lord, Lord Foster, on bringing this to the Floor of the House, and for the work that he does in this area.

I find myself in broad agreement with the points that have been made. Obviously, an awful lot is encompassed by the concept of gambling; it would include premium bonds as well as raffles and the National Lottery. Cases can certainly be made out for the good that they do, although admittedly with some hazards. Broadly, one can talk about a pleasure concept, which is all to the good, although with dangers to some people. Although I align myself with the Cavaliers rather than the Roundheads on the principle of pleasure, there is a broader public health danger that has been alluded to—and that is the point that we have to address.

I will home in one area that concerns me particularly, which is online gambling, particularly in the context of young people, as alluded to by the noble Baroness, Lady Chisholm. It is done on an industrial scale. Many of these companies are not even paying UK tax, although of course they are causing UK misery and causing the UK massive costs in dealing with these issues—although it is the misery that is clearly of most concern to us. It is high time that these companies were brought to heel. There may be other things that need doing, too—I am sure there are—but, as a first-off, the most important issue is to do something on that front. It is particularly dangerous and pernicious and it is done on an industrial scale. When I google “online gambling controls”, up springs not things that are controlling it but adverts for all these companies, often with names such as “Big Win UK Ltd”, and things like that. So there are great dangers, and I hope that the Government are going to address this sooner rather than later. We so often seem to be playing catch-up where there is broad agreement, and certainly broad support from the public, to do something in this arena.

As has been said, misery is caused—there are illnesses and suicides, and damage to the home environment and to business. I just cannot understand why we are dragging our heels on this, when there is broad agreement and a massive need to do something, and I hope that the Government come forward with something in this area in particular before it becomes even more serious. It is something that it seems to me we all agree on, but it is the sort of thing that gets overlooked, and I cannot understand why—so I do hope that the Government will press on and do something in this regard.

Gambling: Early Mortality

Lord Bourne of Aberystwyth Excerpts

Tuesday 20th April 2021 Lords Chamber

[Baroness Barran (Con)]

The noble Lord is right. That is why the Department of Health and Social Care is leading on the addiction strategy and the addiction treatment strategy for the Government, and why the review of the Act seeks to strike the right balance between consumer freedom and preventing harm.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, nobody doubts my noble friend’s commitment, but in view of the need to protect, in particular, vulnerable children from gambling addiction, can she say when the Government last convened a meeting with the Department for Education, the Department of Health and Social Care and the Treasury to consider these issues, which are clearly of great importance?

[Baroness Barran (Con)]

I am not aware of the exact date to give to my noble friend, but I can reassure him that the issue that raised the most contributions in response to our call for evidence was the protection of children and young people.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Lord Bourne of Aberystwyth Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 24th October 2017 Grand Committee

[Baroness Pinnock]

My Lords, I support the amendments tabled by the noble Lord, Lord Kennedy, because he, like I did in previous amendments, seeks to focus the relief provided in the Bill on those places and areas that need it most. He is asking to put in safeguards to prevent some companies deliberately laying cable with no purpose and to ensure that what is done on rate relief achieves the outcome the Government seek, which is to provide more domestic premises and businesses with fast broadband connectivity. I look forward to the response from the Minister—I am not sure which one, perhaps it will be a double act. The questions that the noble Lord, Lord Kennedy, has raised are important and need an answer.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, on this occasion I am genuinely grateful to the noble Lord, Lord Kennedy, for raising this matter. I am not always grateful to him for raising matters but I am today. I am grateful also to the noble Baroness, Lady Pinnock, for her comments. We have a shared interest here, in that I cannot believe that anybody wants to see gaming in the system.

Concerns about gaming in the proposed rate relief for new fibre were raised by a small number of operators in August, when we first shared with them our proposals for the draft regulations. As the noble Lord has said, my noble friend Lady Harding raised this issue at Second Reading. I think she went on to say that she was not by any means convinced that there would be gaming but she raised it as a concern, so we share an interest in ensuring that there is not gaming.

Other operators have told us that they do not believe there is scope for gaming and support the proposed scheme. Nevertheless, we take this matter seriously and have been investigating these claims. Overall, our initial view is that it is unlikely gaming will be used in this tax relief. As I have said, we continue to discuss this with the sector and we are still gathering evidence.

However, if it will help the Committee, I will explain in a little detail why concerns as to gaming have arisen, why we believe such gaming is unlikely, in practice, and how I propose to deal with the matter between now and Report. What is being seen as the potential risk of gaming comes from the line we propose to draw in regulations as to when the relief should apply. New fibre installed after 1 April 2017 will receive the relief. However, some operators will choose instead to use existing fibre optic cable which was installed prior to 1 April 2017 but has not yet been activated. This is known as dark fibre. The objective of the measure in the Bill is to support investment in new fibre broadband infrastructure. Therefore, previous investment in existing fibre, including dark fibre, is not considered to be new fibre, has not been incentivised by this measure and will be outside the relief.

We have heard concerns that the proposed different treatment in the relief scheme of new fibre, which gets the relief, and dark fibre, which does not, could lead to some gaming in the system. It has been suggested that telecom operators may replace or duplicate existing dark fibre with new fibre merely to secure the rate relief. It has also been suggested that some operators may install new fibre in existing locations to gain a competitive advantage over existing operators in that location, merely because of the rate relief.

To understand this better we are investigating the costs and operational implications of installing new fibre into existing infrastructure, such as ducts. By comparing these costs to the potential saving on business rates from the new fibre relief we can identify where, in principle, the scope for gaming exists. To help us with that work we have held discussions with telecom companies regarding this matter and are now considering evidence provided by one operator, Gamma Telecom, which I mentioned at Second Reading. The consultation on the draft regulations runs until 21 November, and during this time we would like to hear views from other operators regarding the risk of gaming. This work is at an early stage and noble Lords will understand that some of the data we are using in this study is commercially confidential.

Our initial findings are that in the vast majority of cases—perhaps covering more than 99% of the telecom network—it will not be financially viable for operators to install new fibre merely to gain the relief. In those cases, the cost of purchasing the fibre and the labour costs associated with opening existing ducts—putting the fibre through those ducts and then connecting the fibre—exceeds the saving from business rates. In those situations it will be cheaper to use existing dark fibre, so gaming would not occur. Our focus, therefore, is on smaller networks where the business rates paid in respect of each kilometre of network are higher than for larger networks. The potential for making a saving in business rates is therefore also higher.

We are looking closely at the circumstances in which new fibre may be installed in existing smaller networks and exploring more of the costs associated with accessing existing ducts. These circumstances account for a very small fraction of the telecoms network—probably less than 1%. That said, I cannot see why 1% should be ignored and if there is evidence of the possibility of gaming, I would want to ensure that we act. But even if there are circumstances where, in principle, the rates saving exceeds the costs, it does not necessarily follow that, in practice, gaming is viable. For example, it may not be possible to add new fibre to ducts which are already in use, while switching from one fibre to another may cause interruption or disruption to the customer, which may be especially unacceptable for business customers and unattractive to the operator. But, as I have said, we agree with the noble Lord and the noble Baroness that we do not want a tax system that is open to gaming in the way that has been suggested. If from our work with the sector we conclude that gaming is likely, I assure the noble Lord and the noble Baroness that we would consider how to amend the draft regulations to prevent it.

The amendments we are considering would move the definition of new fibre into the Bill. This would in fact significantly limit our ability to tackle any gaming. The approach in the Bill of defining in regulations the meaning of new fibre gives us the scope to first identify the circumstances in which gaming might arise before we devise the solution. It allows us to ensure that any solution is practical and to respond quickly to any future circumstances where gaming might arise.

Moving on to the practical points put by the noble Lord and echoed by the noble Baroness about meeting the sector, as I have indicated, I intend to meet Gamma between now and Report, which will probably be towards the end of November. I will certainly keep the House—including the noble Lord and the noble Baroness—informed about how the discussions are going. I would be happy to include them in the thrust of what is happening, and expect to act on any concerns about gaming which indicate that this issue needs addressing. As I say, we are as keen as they are to tackle any potential gaming. I hope with that assurance and the guarantee that I will keep the noble Lord and the noble Baroness involved with what is happening, that the noble Lord will feel able to withdraw his amendment.

[Lord Kennedy of Southwark]

My Lords, I thank the Minister for that helpful response. I am happy to withdraw my amendment at this stage. I am delighted that the Minister is meeting representative of the industry, particularly Gamma. That is very good.

I hope the Minister is right on all these things and that there is no issue with gaming at all. My only concern is that we should pass the legislation in a way that eliminates it. We are often told by the Government that parliamentary time is precious. It would be a shame to get the Bill through and then find, in a year’s time, that there was a problem after all and people are doing the things which we do not think they will now. I like the idea of putting something in regulations as a good way forward. They can be amended a bit more easily. I was at a meeting this morning on a completely different subject: a very good initiative that the Government had come forward with many years ago, when I first joined the House, but now there are some concerns about how it is operating. To get that initiative changed, we have to go back and get the law changed. That is not always easy. I thank the Minister for his response and look forward to further discussions. I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord and the noble Baroness for their contributions on this amendment dealing with the possibility of a review. I welcome the opportunity to return to this proposed new clause, which, as the noble Lord rightly says, was discussed in Committee in the other place.

We have said throughout the passage of the Bill that we intend to work with the sector and the Valuation Office Agency to ensure the smooth implementation of this relief. I happily restate that. We have published draft regulations for consultation; they are up for consultation until 21 November. I hope that noble Lords will see from the debate that we have just had in relation to gaming that my department and the Government as a whole are looking very closely at the detailed operation of the scheme. We all share the objective of wishing to see this scheme implemented effectively and quickly from the outset. This in turn will lead to new fibre growth and improved broadband. That is the aim, which I know that noble Lords share.

However, I fear that the proposed new clause would not achieve that aim and, if included in the Bill, could threaten the success of this scheme. I note what the noble Lord says about business uncertainty elsewhere, but that hardly means that a bit more uncertainty is a good thing or something that we should not be concerned about. Sending a clear signal to investors in the telecoms sector is critical to the success of this measure, which is why we have moved quickly to bring forward the Bill and why we are consulting early on the draft regulations. Investors need to see a clear intention on the part of the Government to deliver relief from 1 April 2017 for five years up to 2022.

One suggestion is about the length of the relief being provided. Any suggestion that it might not last the full five years is not desirable. Those sorts of signals can make the difference to decision-makers in telecoms companies in deciding whether to proceed with an investment. Businesses thrive on certainty. Decisions in telecoms companies are being made now on the basis of the promise made by the Chancellor that new fibre will have relief until 2022.

I understand the objective of the amendment, but it would create uncertainty in the sector and damage the prospects for success of the measure. By providing for, in effect, a review of the rate relief after only one year, we will sow the seeds of doubt in the sector. The sector may fear that the Government might cancel or otherwise negate the relief after a year—especially when, as the amendment clearly states, the review should consider the duration of the relief. We could expect telecoms companies to react in only one way to the prospect of such a review: they will be less likely to invest, which would damage the rollout of broadband. Therefore, I am afraid that the Government cannot accept the amendment.

We will, of course, continue to monitor the effective operation of the scheme to ensure that it is indeed providing relief on new fibre. We will work with the sector and the Valuation Office Agency to do that. The powers in the Act will allow us to adjust the scheme where necessary such as to reflect changing and new technologies. Any suggestion that the relief might last less than five years is something that we cannot subscribe to.

The amendment would also require the Government to assess the impact of the relief on local government. In fact, that is information which we already plan to collect and publish. I can give that undertaking. Each year, the department publishes non-domestic rating returns containing the information about the business rates income and relief in each local authority area, which this seems to ask for. I can ensure access to that; we can provide the link so that that information is readily available. Those returns are based on information provided to us by local government, and they can be found in full on our website. As I say, I am very happy to provide guidance on how that can be accessed. Those returns will in future include information about the level of new fibre relief. We expect the first returns to include this information to be the outturns for 2017-18, published in autumn next year. I am happy to provide that information and, indeed, to meet the noble Lord and the noble Baroness, with officials, to explain how a lot of the information that has been requested is already available.

Throughout the passage of the Bill through this House and the other place, we have been clear that we would compensate local government for the cost of its share of the relief, and I give that assurance again today. In view of these assurances, I hope the noble Lord will feel able to withdraw his amendment, with the undertaking that I am happy to meet him and the noble Baroness to go through this, perhaps to explain how at least some of this information is available at the moment.

[Lord Kennedy of Southwark]

I thank the Minister for his helpful response. I am happy to withdraw my amendment. I think that brings us to the end.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Lord Bourne of Aberystwyth Excerpts

2nd reading (Hansard): House of Lords
Monday 9th October 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank my noble friend Lord Ashton for introducing this Second Reading debate and all noble Lords who have participated in it. I am grateful for their contributions and for the welcome—so far as it went. This was, predictably, a wholehearted welcome but with regret for some things which the legislation did not contain. I can understand that, and I will deal with it shortly.

I will focus first on what the Bill does contain. The noble Lord, Lord Kennedy, is absolutely right: it is an important facet of the legislation that it helps the residential sector as well as business and provides assistance for the 5G mobile connectivity element, as referred to by the noble Baroness. The objective of this measure is to support and reward companies which invest in the telecoms network. As such, it is important to appreciate that this is actually buying something. This dates from April 2017 so we therefore do not propose to compensate any fibre which was already in the ground in February 2017. This is for new fibre put down for a five-year, fixed-term period. This brings me to the gaming aspect: I too was keen to know whether this was likely to be gamed. On consultation and inquiry it looks unlikely but we are watching this like hawks. If noble Lords think there is some means by which it could be gamed I invite them to let us know because we are, obviously, seeking to make sure it is not. I am pretty convinced that it could not be, because the financial incentive would be zero.

As we have heard in the debate, this is a technical area in respect of both telecommunications networks and how they are treated in business rates. We will, no doubt, return to the detail in Committee, but I reassure the House that we intend to develop the proposals for this measure in collaboration with the sector and only after consultation. The draft regulations are out for consultation at the moment and that will go on until 21 November. There is still an opportunity for everybody to participate in that and I encourage experts and politicians—do not take that the wrong way—to do so, particularly those who understand it in detail and politicians who represent those who do. My noble friend Lady Harding clearly understands this area very well, as does the noble Earl, Lord Erroll. I am very grateful for their participation and for giving the House the benefit of their expertise.

Broadband speeds and connectivity impact on the everyday lives not just of businesses but of households. Investment in new fibre will make a real change to people’s lives and is part of a package worth over £1 billion to the sector, as my noble friend Lord Ashton outlined. Providing rate relief for new fibre will give a welcome boost to investment. My noble friend Lady Harding asked about access to BT lines. They are consulting on that at the moment and we regard it as important. In terms of the rates relief offered, there will be a level playing field for participants in the system. No fear or favour is given to any provider: they are all treated in the same way.

It is important and fair to all ratepayers that telecoms operators pay business rates in the normal way, outside this five-year period where there is relief. We will not therefore seek to provide relief in relation to dark fibre, which would clearly be wrong. However, we have heard concerns about business rates deterring investment in new fibre, and providing this temporary relief from business rates just for new fibre investment would send a clear message to operators. If you invest in new fibre after 1 April 2017 you will not pay rates on it until 2022. For that new investment, you can remove business rates from the spreadsheet. As my noble friend Lady Harding indicated, that is important for getting investment going in this area where we lag behind. This legislation has some important provisions.

The noble Lord, Lord Kennedy, raised the issue of the Henry VIII clause. As he will know, consistent with my approach to legislation I am very keen to bear down on this, so I have looked at it to make sure that it is as confined as it can be. I well remember the noble and learned Lord, Lord Judge, participating in our proceedings and rightly being tough on Henry VIII clauses. This has not yet gone to the Delegated Powers and Regulatory Reform Committee but it will do so. As I say, we seek to confine it as much as is sensibly possible and, of course, it will be subject to affirmative resolution. I hope that both those points reassure the noble Lord.

Such is the technical and fast-moving nature of the sector that I do not think it would be prudent to try to put on the face of the Bill the detailed arrangements of the scheme. These will be done in the detailed regulation through consultation and discussion. I know that noble Lords will understand that. However, we want to ensure that the House is fully aware of how we intend to operate this measure. As I have said, we have published draft regulations and are continuing discussions with the sector, and the Committee stage will give us the opportunity to consider these matters in more depth.

The noble Lord, Lord Kennedy, sought, somewhat mischievously, as is his wont, to try to open this issue of rate relief on a much broader front all over the place. I have indicated previously that we remain very much wedded to the retention of business rates. I have also indicated that we will want to look at the broader issue of the high street versus the internet in the context of the G8—I think I am right in saying that—in which we participate, and take a lead on that. I think that is due next spring, so I can give the noble Lord that reassurance.

As I said, draft regulations will come forward. I reassure those who have a close connection with local government—the noble Baroness, Lady Pinnock, raised this issue—that local authorities will not be financially disadvantaged as a result of the relief. We will, through grant payments, compensate local authorities for the loss of the rates income that they suffer through the rates retention scheme as a result of this relief. This is a commitment that I am happy to restate and it is also given in the consultation document.

I thank all Members who have participated for the support that they have shown, at least in terms of the central core of this legislation. The commitment to provide rate relief on new fibre was given by the Chancellor in the Autumn Statement 2016. To maximise the benefit of this policy, telecoms operators need to be confident that the relief will be applied retrospectively to April 2017. I confirm that that will be the case. That is why we have brought forward the Bill as quickly as we have, with the support of the Opposition Benches, certainly in the other place and here too, to send a clear signal to the sector that this relief is on its way. With that, I commend this legislation to the House.

Bill read a second time and committed to a Grand Committee.