HOUSE OF LORDS

Merits of Statutory Instruments Committee

26th Report of Session 2006-07

Ordered to be printed 3 July and published 5 July 2007

London : The Stationery Office Limited £price

HL Paper 137 The Select Committee on the Merits of Statutory Instruments The Committee has the following terms of reference: (1) The Committee shall, subject to the exceptions in paragraph (2), consider— (a) every instrument (whether or not a statutory instrument), or draft of an instrument, which is laid before each House of Parliament and upon which proceedings may be, or might have been, taken in either House of Parliament under an ; (b) every proposal which is in the form of a draft of such an instrument and is laid before each House of Parliament under an Act of Parliament, with a view to determining whether or not the special attention of the House should be drawn to it on any of the grounds specified in paragraph (3). (2) The exceptions are— (a) Orders in Council, and draft Orders in Council, under paragraph 1 of the Schedule to the Act 2000; (b) remedial orders, and draft remedial orders, under section 10 of the Human Rights Act 1998; (c) draft orders (including draft subordinate provisions orders) under section 1 of the Regulatory Reform Act 2001, subordinate provisions orders under that Act and proposals in the form of a draft order under that Act; (d) Measures under the Church of England Assembly (Powers) Act 1919 and instruments made, and drafts of instruments to be made, under them. (3) The grounds on which an instrument, draft or proposal may be drawn to the special attention of the House are— (a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House; (b) that it may be inappropriate in view of changed circumstances since the enactment of the parent Act; (c) that it may inappropriately implement European Union legislation; (d) that it may imperfectly achieve its policy objectives. (4) The Committee shall also consider such other general matters relating to the effective scrutiny of the merits of statutory instruments and arising from the performance of its functions under paragraphs (1) to (3) as the Committee considers appropriate, except matters within the orders of reference of the Joint Committee on Statutory Instruments.

Current Membership The Members of the Committee are: Baroness Adams of Craigielea Viscount Eccles Baroness Maddock Lord Armstrong of Ilminster Lord Filkin (Chairman) Baroness Thomas of Winchester Viscount Colville of Culross Lord James of Blackheath Lord Tunnicliffe Baroness Deech Lord Jopling

Registered Interests Members’ registered interests may be examined in the online Register of Lords’ Interests at www.publications.parliament.uk/pa/ld/ldreg.htm. The Register may also be inspected in the House of Lords Record Office and is available for purchase from the Stationery Office.

Publications The Committee’s Reports are published by the Stationery Office by Order of the House. All publications of the Committee are on the internet at: www.parliament.uk/parliamentary_committees/merits.cfm

Contacts If you have any queries about the Committee and its work, please contact the Clerk of the Merits of Statutory Instruments Committee, Delegated Legislation Office, House of Lords, London SW1A 0PW; telephone 020-7219 8821; facsimile 020-7219 2571; email [email protected]. The Committee’s website, www.parliament.uk, has guidance for the public on how to contact the Committee if you have a concern or opinion about any new item of secondary legislation.

Twenty-sixth Report

INSTRUMENTS OF INTEREST 1. In the run-up to the Gambling Act 2005 coming into effect on 1 September, the Department for Culture, Media and Sport have laid a number of instruments1. The draft Gambling Act 2005 (Horserace Totalisator Board) Order 2007 and draft Gambling Act 2005 (Horserace Betting Levy) Order 2007 aim to maintain the existing regimes when the current legislation is repealed. We also note that, in response to concerns expressed by Members of both Houses, the draft Categories of Gaming Machine Regulations 2007 have been withdrawn since we considered them at our meeting of 5 June, and re-laid with an additional section relating to the use of lottery ticket vending machines in working men’s clubs and similar venues. We asked the department questions about electronic gambling and how effectively they will regulate the more technologically advanced areas of this sector: their responses are printed at the Appendix. 2. The restructuring of public funding (legal aid) in civil cases continues on the lines of Lord Carter of Coles’ report2. The latest stage is the Revised Funding Code: Criteria, laid by the Legal Services Commission. Amongst other things, the Code facilitates the new legal aid scheme for private law family work from October 2007, including proceedings relating to children. The Government’s policy in this area remains controversial with all parts of the legal profession. 3. The Department for Environment, Food and Rural Affairs (DEFRA) have laid the draft Welfare of Farmed Animals (England) Regulations 2007 (to be considered in Grand Committee on 10 July). The Regulations, made under the Animal Welfare Act 2006 (“the 2006 Act”), set down the rules for protecting the welfare of farmed animals and impose duties on the person responsible for the animals. They replace the Welfare of Farmed Animals Regulations 2000; DEFRA have said that there are no significant changes to the 2000 Regulations (other than removal of provisions that are duplicated in the 2006 Act). Several consultation respondents argued that the Regulations should not apply to common land, especially in very remote areas. The Committee sought further advice on this issue. DEFRA have told us that they have sent the commoners’ associations a letter clarifying the position. In particular, they have made it clear that the requirement to provide artificial shelter to free-roaming livestock would apply only “where possible”; and also that the requirement to inspect animals frequently would not apply where the welfare of the animals did not require frequent human attention. 4. The draft Housing Benefit (Loss of Benefit) (Pilot Scheme) Regulations 2007 implement section 31 of the Welfare Reform Act 2007

1 See also draft Gambling (Lottery Machine Interval) Order 2007, draft Gambling Act 2005 (Amendment of Schedule 6) Order 2007 and draft Gambling Act 2005 (Operating Licence Conditions) Regulations 2007, Gambling Act 2005 (Premises Licences and Provisional Statements) (Amendment) (England and Wales) Regulations 2007 ((SI 2007/1775), Gambling Act 2005 (Limits on Prize Gaming) Regulations 2007 (SI 2007/1777) and Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) (No. 2) Regulations 2007 (SI 2007/1791) 2 “Legal Aid: A market-based approach to reform” published 13 July 2006

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and set up a pilot scheme to test the effects of reducing Housing Benefit when a person has been evicted on the grounds of anti-social behaviour and has refused to accept support to tackle that behaviour. Among other things, the Regulations set out the level of phased reductions in benefit that will apply. The scheme will be piloted in eight local authorities for two years starting 1 November 2007. The proposal attracted attention during the passage of the bill for the Act and the operative provisions of the parent Act contain a sunset date of 31 December 2010. The scheme could not be rolled out nationwide without further primary legislation. 5. The Northern Ireland Office (NIO) have laid the draft Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2007. The Order makes provision for Northern Ireland parties to continue to be able to accept donations from Irish individuals and bodies from 1 November 2007 onwards, when Northern Ireland will become subject to most of the rules governing the regulation of donations contained in the Political Parties, Elections and Referendums Act 2000. The NIO have said that the steps set out in the Order, which seek to balance a number of competing concerns including administrative burden and parity of treatment, reflect an approach which has been agreed with both the Electoral Commission and the Irish Government. 6. The draft Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2007 adds two further names to the list of banned organisations (Jammat-ul Mujahideen Bangladesh and Tehrik Nefaz-e Shari’at Muhammadi); both are believed to have comitted terrorist acts abroad. Inclusion in the list makes it illegal for anyone in the United Kingdom to promote or support that organisation. The list is reviewed regularly and organisations added or removed as appropriate. 7. The Criminal Justice Act 2003 (Reviews of Sentencing) (Consequential and Supplementary Provisions) Order 2007 (SI 2007/1762) modifies section 36 of the Criminal Justice Act 1988 to ensure that the Attorney General has power to refer all mandatory life sentence cases considered to be “unduly lenient” to the Court of Appeal for judicial reconsideration of the minimum term to be served. Due to an unintended gap in the law, the Attorney General did not have power to refer certain cases in which prisoners already sentenced for murder are awaiting the determination of a minimum term by the High Court. It is understood that there are approximately 180 cases awaiting determination of their minimum term, due to the gap which this instrument now closes.

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INSTRUMENTS NOT REPORTED The Committee has considered the instruments set out below and has determined that the special attention of the House need not be drawn to them.

Draft Instruments requiring affirmative approval Categories of Gaming Machine Regulations 2007 European Communities (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Albania) Order 2007 Gambling Act 2005 (Amendment to Schedule 6) Order 2007 Gambling Act 2005 (Horserace Betting Levy) Order 2007 Gambling Act 2005 (Horserace Totalisator Board) Order 2007 Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 Gambling (Lottery Machine Interval) Order 2007 Housing Benefit (Loss of Benefit) (Pilot Scheme) Regulations 2007 Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2007 Revised Funding Code: Criteria; prepared by the Legal Services Commission Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2007 Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2007 Welfare of Farmed Animals (England) Regulations 2007 Working Time (Amendment) Regulations 2007

Instruments subject to annulment SI 2007/1609 Justices of the Peace (Training and Development Committee) Rules 2007 SI 2007/1610 Family Proceedings Courts (Constitution of Committees and Right to Preside) Rules 2007 SI 2007/1611 Youth Courts (Constitution of Committees and Right to Preside) Rules 2007 SI 2007/1679 European Communities (Designation) (No. 3) Order 2007 SI 2007/1683 Education (Student Loans) (Repayment) (Amendment) Regulations 2007 SI 2007/1688 Education (School Teachers’ Pay and Conditions) (No. 2) (Amendment) Order 2007 SI 2007/1711 Transfrontier Shipment of Waste Regulations 2007 SI 2007/1720 Education (Outturn Statements) (England) Regulations 2007 SI 2007/1736 Road Traffic (Permitted Parking Area and Special Parking Area) (City of Manchester) (Amendment) Order 2007 SI 2007/1742 REACH (Appointment of Competent Authorities) Regulations 2007

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SI 2007/1746 Spelthorne College, Ashford, Middlesex (Dissolution) Order 2007 SI 2007/1747 Skelmersdale College (Dissolution) Order 2007 SI 2007/1748 North Trafford College of Further Education (Dissolution) Order 2007 SI 2007/1751 Farnham College (Dissolution) Order 2007 SI 2007/1752 Cricklade College, Andover (Dissolution) Order 2007 SI 2007/1754 Keighley College (Dissolution) Order 2007 SI 2007/1755 Bovine Products (Restriction on Placing on the Market) (England) (No. 2) (Amendment) Regulations 2007 SI 2007/1762 Criminal Justice Act 2003 (Reviews of Sentencing) (Consequential and Supplementary Provisions) Order 2007 SI 2007/1767 Veterinary Surgery (Artificial Insemination) (Amendment) Order 2007 SI 2007/1768 Digital Switchover (Disclosure of Information) Act 2007 (Prescription of Information) Order 2007 SI 2007/1770 Public Guardian Board Regulations 2007 SI 2007/1775 Gambling Act 2005 (Premises Licences and Provisional Statements) (Amendment) (England and Wales) Regulations 2007 SI 2007/1777 Gambling Act 2005 (Limits on Prize Gaming) Regulations 2007 SI 2007/1791 Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) (No. 2) Regulations 2007 Statutes made by the University of Oxford on 10 October 2006 and 6 March 2007

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APPENDIX: EXPLANATORY INFORMATION Draft Gambling Act 2005 (Horserace Totalisator Board) Order 2007 Draft Gambling Act 2005 (Horserace Betting Levy) Order 2007 Draft Categories of Gaming Machine Regulations 2007 Draft Gambling (Lottery Machine Interval) Order 2007 Draft Gambling Act 2005 (Amendment of Schedule 6) Order 2007 Draft Gambling Act 2005 (Operating Licence Conditions) Regulations 2007

Q1: Which category would a blackjack machine fall into – gaming machine or automated table game? A1: The definition of a gaming machine in the Act is deliberately very broad: “a machine which is designed or adapted for use by individuals to gamble (whether or not is can also be used for other purposes).” This broad definition is subject to specific exceptions set out in Section 235(2). These include exemptions for partially automated and wholly automated machines for playing real (i.e. non-virtual) games of chance in casinos. Whether or not a blackjack machine is a gaming machine will depend on whether or not it falls within these exceptions. A gaming machine based on blackjack, or a virtual representation of blackjack (i.e. using computer generated or video pictures of playing cards), would be subject to the same stake and prize limits as any other gaming machine, and, as such, its category would be defined by its stake and prize limits. Such gaming machines would also be subject to the same rules in relation to location/numbers of machines as other gaming machines. A wholly or partially automated version of blackjack made available in a casino may well be exempt from the gaming machine definition by virtue of Sub-sections 235(2)(h) or (i). A partially automated version of blackjack could take the form of a croupier dealing real cards but people placing their bets on automated terminals (as opposed to placing chips on the table). A wholly automated version of blackjack would require a machine which dealt real cards and automated terminals on which players place bets. In both cases, this equipment will be regulated separately to the gaming machine regulations through a combination of licence conditions (including the maximum of 40 player positions for wholly automated gaming tables included in the mandatory premises licence conditions previously considered by the Committee) and technical specifications. Q2: What is to prevent multiple bets – i.e. on a roulette machine the person presses the button 5 times in rapid succession thereby betting £5 rather than the minimum stake of £1 A2: The order makes it clear that the maximum charge for use is for the use of a gaming machine once. [See regulation 2(1): “charge for use” means the amount a person pays for using a gaming machine once] Regulation 2(2) is designed to prevent the sort of abuse of the stake limit you describe. (2) ... a person is to be treated for the purposes of these Regulations as using a gaming machine once, even where he uses the machine to gamble more than once, if the payment for each gamble is made before he is able to know the result of any of them. If the Committee is, however, referring to wholly/partially automated roulette and other table games (which may be offered in casinos by virtue of the exemptions identified

6 MERITS OF STATUTORY INSTRUMENTS COMMITTEE above), it is important to note that these are regulated more along the lines of real table games, and so there is no maximum stake limit. Q3: In virtual gaming the outcome is based on a computer programme, and the odds are dictated by the same programme, which therefore has the equivalent of insider knowledge. It also eliminates the element of random chance e.g. the favourite falls at the first fence or is impeded by a loose horse. Q4: What measures are in place to prevent the odds being unfairly manipulated? (for example so a horse at long odds never wins, thereby increasing the profit to the operator) A3&4: A virtual horse race machine, on which people are able to place bets directly (i.e. by putting money in a slot, and not by placing bets over the counter, say, on the outcome of a virtual horse race screened at a betting shop or racecourse), will count as a gaming machine under the Act, and as such will be subject to the same system of regulation as other gaming machines, including a rigorous testing programme which will be overseen by the Gambling Commission. Where bets are placed over the counter on the outcome of virtual races screened in gambling premises, the stake and prize limits and other gaming machine regulations will not apply. Instead, this can be controlled through conditions attached to operating licences. Section 85(1) allows conditions to make provision about equipment used in connection with the licensing activities. Q5: What measures are in place if any to inform the punter familiar with live horse or dog racing that the way the odds work on a machine version are different? A5: Regulations which will be brought forward under Section 240 of the Act (governing the circumstances in which gaming machines are offered for use) will require all machines including any virtual race games to provide information to players about the odds of winning prizes from use of the machine. This information will need to be readily available to anyone using the machine. Q6: What provision is there within the act to enable the controls to keep up with new technological developments in gaming machines? A6: The enabling nature of the Act was designed very much with these sorts of technological developments in mind. The Secretary of State and the Gambling Commission have extensive powers to intervene in the way in which gambling is conducted - see in particular the powers under Sections 240 and 96 relating to the Secretary of State’s powers to make regulations controlling the circumstances in which a gaming machine is made available for use and the Gambling Commission’s powers to set technical operating standards governing the manufacture etc of gaming machines. The Commission will be responsible for monitoring technological developments in the industry and will work closely with the Department on further secondary legislation should any prove necessary. Q7: Are the proceeds from cartoon horse racing included in the calculation of the Horse Racing Levy? A7: No, the Levy is only on British Horseracing. It does not include any proceeds from virtual racing on fixed odds betting terminals or otherwise.