HC Deb 14 March 1991 vol 187 cc1209-24

11.2 pm

Mr. Ken Hargreaves (Hyndburn)

I am grateful for the opportunity to raise once again the need for a national lottery in Great Britain.

Lotteries have existed for centuries. They can be traced from the ancient Romans to the feudal kings and renaissance merchants, to Governments in Europe and, eventually, throughout the world. The Romans participated in them as a form of entertainment, and for the most part lotteries continued to be used in that way well into the 16th century. By the early 1700s, European Governments began to recognise the revenue potential of lotteries and started to license their operation. Revenues were used to finance the construction of roads, bridges, schools and churches, and to provide assistance for needy individuals.

English colonists to America relied on lotteries for a variety of purposes, and lotteries flourished in colonial America with the support of most churches, which were among the primary beneficiaries. Private companies conducted lotteries to dispose of surplus goods, and groups ran them in support of schools, churches and public works. That laissez-faire attitude towards lotteries led to abuses and fraud. As criticism grew, colonial assemblies began to regulate lotteries, so that, by the mid-1700s, Government-sponsored lotteries had all but replaced private ones. The Government issued licences, specified the drawing dates and approved the directors who operated the games. In time, that Government regulation helped to dispel public criticism.

Lotteries were thriving in Europe. They were seized upon as sources of new revenue by the Governments of the Netherlands, Denmark, Spain, Portugal, Austria and many other countries. The advent of Government regulation did not mean that lotteries became less common; far from it. The public preferred lotteries to higher taxes, thus confirming Thomas Jefferson's view that lotteries are the perfect tax, paid only by the willing. Lotteries were used to raise funds for public activities and to provide relief for the needy.

By the mid-1800s, even Government-controlled lotteries were falling prey to abuse and fraud. Licensing procedures were simply inadequate to ensure that they were conducted honestly and competently. Profits were diverted to middlemen and to pay bribes to licensing authorities and officials. By 1900, there were virtually no official lotteries in the English-speaking world.

The advent of computer technology and enormously improved communications began to make safe, honest lotteries once more a practical proposition in the 1900s. In the early 1990s an increasing number of companies are switching their management systems to the most modern and safest form of lottery ticket and prize pool management which uses direct and instantaneous recording of. each bet made through a sales agent's terminal that is connected by telephone line directly to the central computer. Such on-line systems also increase lottery sales, because they can be shut down literally minutes before the draw for a conventional lottery.

Lotteries are successful despite the fact that they are run to raise revenues. They succeed because people enjoy playing them. For centuries, people have been eager to pay small amounts for the chance to win a large cash or goods prize. So long as they have confidence in the integrity of the games, and particularly if they have sympathy with the objectives to which the proceeds are to be devoted, people play lotteries. They abandon them when they can see that the games are tainted by fraud or mismanagement. People like to take a chance, but it must be an honest chance—and today it is, and can be, such a chance.

Today there are lotteries in 116 countries. They have been used to finance the building of the Sydney opera house and to fund the Olympic games in Moscow and in Mexico. They were also used to build the great American universities of Yale and Harvard. In the past, Britain has also benefited from a national lottery. The British museum was built from the proceeds of such a lottery. However, Britain and Albania are now the only countries in Europe that do not have a national lottery.

I realise that some people are concerned about our having a lottery, and I want to deal with those concerns before presenting positive reasons both for establishing a national lottery and for establishing one quickly.

The 1987 Royal Commission on Gambling listed objections to a national lottery which are still relevant today. The royal commission considered those objections in some detail, but concluded that none of the arguments carried sufficient weight to alter its recommendation in favour of a national lottery.

The royal commission summarised the main objections to the lottery as follows: that it would damage football pools and small lotteries; that the state should not promote gambling and that it would add to the social evils of gambling; and that taxation should be used to raise funds, not the lottery.

The Pools Promoters Association stated in 1975, following the publication of the interdepartmental working party on lotteries report, that large lotteries and the pools industry were compatible. Further, in its evidence to the Royal Commission on Gambling in 1978, the association accepted the existence of a market for a new and popular form of lottery. That evidence was probably influenced by the fact that, at the time, the association seemed the best organisation to manage and distribute a national lottery. It pointed out to the royal commission that its assets in skill, experience in security, equipment and facilities could not be matched for a scheme that used door-to-door agents.

However, that was the position in 1978. Technology has moved on apace. Even with a lotto scheme, it is inconceivable to think of the modern lottery being run by agents collecting from door to door. Modern technology means that participants select their numbers, which are recorded by a computer terminal in each agency. That is much more efficient, and the security is better than any other method.

A survey conducted by Social and Community Planning on behalf of the 1978 royal commission also showed that a national lottery would not dramatically change people's participation in the pools. I believe that that is still the case today. Would small lotteries suffer? Experience shows that small lotteries do not suffer from the establishment of national lotteries. Research and surveys conducted in Britain and the United States show that small lotteries are not adversely affected. More recently, the introduction of the Irish lottery has been accompanied by increased sales of charity lottery tickets, possibly as a result of the publicity surrounding the national lottery and the awareness that it creates.

Should the state provoke gambling? There is a great difference between the state being involved in gambling in order to administer control and the state actively promoting it. It is necessary for the Government to be involved to reduce the possibility of illegal gaming. Wherever illegal gambling is allowed to flourish, it is accompanied by other crimes. It is important for the state to encourage controlled conditions to ensure fair play and moderation. Creating controls is not promoting gambling.

The clamour for a national lottery comes from many quarters. The Government have no need to promote the idea. However, if they fell that the arguments in favour were overwhelming, it would be right to introduce legislation. Would there be harmful social effects? It is worth looking at countries which have lotteries to see whether any harmful social effects occur as a result of them. The strong Church traditions throughout Europe have not blocked lotteries in any country, because Churches can see that lotteries do not breed gambling habits.

In France, the Loto National started in 1976. The Rothschild royal commission noted: We have neither heard nor seen anything to suggest that its remarkable success has been accompanied by any socially harmful effects. Studies conducted in the past nine years in the United States of America and Canada, where lotteries are operated, show that low-income groups participate in disproportionately low numbers. Their participation rate is lower than their proportion of the population. The poor are less likely to buy lottery tickets than middle-income individuals. Lotteries are, by and large, a source of entertainment for middle-income people.

Whatever the objections to a lottery being established in Britain in the past, the position has changed and will change even more dramatically in 1992. It has changed because lottery tickets are already coming into Britain from Canada, West Germany and other countries. Some 3 million tickets were prevented from coming in last year, but many got through. I have received many examples from the public. I should be happy to let the Minister have a couple, if he so wished. One that I have here from Austria offers a prize of £31 million. I can tell the Minister that some of us in marginal seats are considering such tickets with increasing interest. All this is despite the fact that the conduct of foreign lotteries in Great Britain is prohibited under the Lotteries and Amusements Act 1976.

The European Commission will shortly consider whether the gambling industry is wrongly interpreting the structure of the 1992 legislation. A report due soon from Coopers and Lybrand Deloitte will highlight the difference between the betting legislation of the 12 member states to allow the Commission to decide whether they represent a threat to the rest of the single market. The Commission may conclude—many experts believe that it will—that the ban on lottery tickets entering the United Kingdom constitutes a barrier to the free circulation of goods and services between the Twelve and is therefore an infringement of EC law.

Therefore, it seems inevitable that European lottery tickets will be available in the United Kingdom on a large scale. As opinion polls show that people will buy them, we will then be funding improved facilities in France and Germany, for example, despite the fact that France already has 20 times more covered tennis courts than we have, and Germany has 20 times more covered swimming pools than we have, as well as 120 opera houses to our six. It is vital that a British-based lottery is introduced urgently to retain benefits for our country. It would not be complicated to set up; legislation would not be complex. It could play an exciting role in financing so much that has to be done for the arts, for sport and for the environment.

Mr. John Lee (Pendle)

I want to put on record the fact that the Association of Leading Visitor Attractions—of which I have the honour to be chairman—whose members comprise the leading private sector visitor attractions, including many of our leading national cathedrals and many of our leading national galleries and museums, is very supportive of the concept of a national lottery. The trigger for membership of ALVA is 1 million or more visitors a year, so we are talking about the largest visitor attractions. ALVA is supportive of the concept, especially if the majority of the surplus is used towards sustaining and improving the fabric of our historic properties which do so much to attract overseas visitors to this country and which also attract domestic visitors.

Mr. Hargreaves

I am grateful to my hon. Friend for his intervention and for his support. He is one of the six sponsors of the early-day motion.

In 1978, the Royal Commission on Gambling saw a single national lottery in support of the arts as a rare opportunity to improve the quality of British life. The case for such a lottery is far stronger today when the quality of life is a major public issue.

A simple change in existing legislation to allow a single nationwide lottery, authorised by the Government, would require the passing of a Bill through Parliament. The establishment of a lottery would not involve the Government in running the lottery directly, nor would it create new running costs for central or local government. The responsibility for and general oversight of the lottery would be the duty of a national lottery board. The board could have some 10 members, selected for their independence of spirit and imagination, coupled with personal distinction and public standing. No new Government bureaucracies would be needed, and the state would not be directly involved in marketing or promotion.

The function of the national lottery board would be to invite applications for the operation of the national lottery board for good causes, to consider applications for the franchise and to determine its conditions, to approve the lottery system and to make arrangements for distributing the proceeds of the lottery, to arrange for an independent audit of the lottery and to make an annual report to Parliament.

The distribution of funds would be channelled into existing and, future projects as capital funding and endowment, ensuring that no running costs needed to be met from public sources. The national lottery, while independent, would remain under careful Government scrutiny, but free of political influence.

It is important that there should be a single national lottery. A multiplicity of large lotteries would create serious problems of control and would become a public nuisance. It is clear that, in this modern age, a large, successful and, above all, secure lottery, available to the public, requires expertise and technical facilities that could be provided with maximum efficiency and economy only on a national scale, even more tautly organised than the pools. If participation paralleled the Spanish enthusiasm, prizes could amount to six weekly prizes of £1 million each. That would guarantee regular participation and the maximum support for the good causes.

Protection against fraud and guarantees that the fund reached the good cause would also be within the functions of the national lottery board. Auditing and an annual report to Parliament would further ensure security. Those considerations, and not protection from competition or from free market enterprise, would make the Government charter necessary.

General taxation cannot bear the cost of all desirable objects, as distinct from those that are essential to the nation, such as health and education. Funds from a lottery, which would complement and not replace existing Government funding or private sponsorship for sport, for the arts and for the environment, could give a much-needed boost to areas that are so critical to the quality of British life. That is not to say that other good causes would be ignored. For example, national disasters and relief efforts have good claims to be lottery beneficiaries.

Sport greatly adds to the quality of life in the community. It improves health and personal development. Sport generates direct and indirect economic benefits, spin-offs in sports medicine and science and a lifting of national moral and prestige. Olympic and Commonwealth games produce national heroes, but with decreasing sports facilities and playing fields, tomorrow's champions may not be given a chance. It is worth noting that the Spanish lottery has already raised £10 million for the 1992 Barcelona games.

A proliferation of the arts throughout all regions of the nation and their integration into daily life is one of the keys of civilisation. Britain cannot yet rival some of its European counterparts in terms of state funding for the arts and the protection of national treasures.

In a per capita comparison with Munich, London alone would have 21 orchestras and 10 opera houses. Currently, Britain has only six opera houses, compared with 102 active in Germany. The recent closure of Kent opera illustrates the crisis. Despite well attended theatres and galleries, the arts are prevented from filling the full potential of their essential role in society simply by lack of growth, development and funds.

Protection and enhancement of many aspects of the environment and their associated research contribute to the quality of everyone's life. In its global picture, environment means everything that surrounds and civilises our lives—the arts, sport, landscape, plants and nature itself.

The many projects to be envisaged include the reclamation of derelict and neglected land, the introduction of green areas in cities, and the preservation of cathedrals, all requiring vast funds which could not be expected to come from current state funds.

Concern for the environment is now a fundamental issue and a worthy beneficiary of lottery funds. The funding of sport, art and the environment reflect the most widely popular use of lottery revenue.

Some 92 right hon. and hon. Members of all parties have signed early-day motion 566 in favour of a lottery.

Many others who cannot or do not sign early-day motions have written to express their support. I believe that there is similar support throughout the country.

Time is not on our side, but if we act quickly we could set up a national lottery which would raise £1 billion each year for arts, sport and the environment before our European partners flood the market.

I am not trying to promote, encourage or stimulate gambling. What I am trying to do in urging the setting up of a national lottery is to ensure that the proceeds of gambling benefit Hyndburn, Birmingham and Penzance, not Hamburg, Brussels and Paris.

Mr. Stuart Randall (Kingston upon Hull, West)

The hon. Gentleman mentioned on a couple of occasions during his excellent speech the threat posed by other EC countries selling tickets here after 1992. What evidence does he have to substantiate that worry? Surely, at the end of the day, the court will have to decide. I must confess that I cannot be as sure as he appears to be of the outcome.

Mr. Hargreaves

There is increasing evidence that the view that the Home Office seems to take that we can prevent tickets coming in will not prevail in the end. The feeling now seems to be that, if the case goes to the European Court, we will lose, and by then it will be too late.

Mr. John Bowis (Battersea)

Is it not the case that such tickets are already coming in? The Irish sweep tickets are freely available here, and it will not be long before the others follow.

Mr. Hargreaves

That is happening illegally. The same situation arose in Denmark. It now has a lottery of its own, but the West German tickets already had a hold there. I am afraid that that is what will happen to us. We will miss the chance, we will buy other people's tickets, and if we then lose the case in the European Court people will have got used to buying tickets from a foreign lottery and continue to buy them rather than ours.

I should like to place on record my thanks to the international conductor, Dennis Vaughan, who has worked and campaigned so hard for a national lottery. For his sake, and for the sake of millions of citizens in this country, I hope that the Minister will assure the House that, despite the depressing recitation of the out-dated arguments against a British national lottery that were put last week by one of his officials to a meeting of the Lotteries Council, the Home Office will give this matter urgent consideration. Next year will be too late.

11.24 pm
Mr. David Amess (Basildon)

I congratulate my hon. Friend the Member for Hyndburn (Mr. Hargreaves) on his splendid speech. He is well known in the House for his tenacity in pursuing issues in which he strongly believes, of which this is certainly one.

Listening to my hon. Friend, I was taken with the idea of suggesting that the headquarters of the national lottery should be in my constituency of Basildon. He might object to that, on the grounds that it would be better situated in Hyndburn.

A national lottery is a splendid idea. Premium bonds have lost their attraction. I feel somewhat bitter, because I purchased some when the noble Lord Stockton introduced them but have not won anything. I can see the attraction to the general public of a national lottery. Much would be gained from a draw on television. I can imagine Joan Collins pulling out the winning ticket and Mr. and Mrs. Smith, sitting in front of the television at home, suddenly learning that they had won £1 million or £500,000.

The case advanced for a national lottery is that sport, the arts and the environment cannot be wholly funded from general taxation and that they deserve more money because they contribute significantly to the quality of our national life. The most important question is how much a British national lottery would contribute to those aims. The research produced by my hon. Friend and his colleagues shows that projected sales, taking the average per capita spend on lotteries of all EC countries, would be £3.1 billion. If 45 per cent. of the proceeds were returned in prize money and a further 20 per cent. allocated to expenses, 35 per cent. would be left to distribute to various causes. That gives a lottery income of £1.08 billion a year, which is a huge amount.

A comparison with lotteries in the United States shows about the same income—£1.1 billion a year. Even a fledgling national lottery in Northern Ireland has an income of £572 million a year. Although that is the lowest projection, it is an incredibly large amount of money for sport, the arts and the environment.

Can you, Mr. Deputy Speaker, imagine £1 billion being spent on those three areas? I could spend that money extremely well on them in Basildon. There could be a fully funded symphony orchestra in each regional centre, famous works of arts could be retained in this country, a theatre company the size of the Royal Shakespeare Company could be fully maintained and there could be encouragement and support for young talent across Great Britain——

Mr. Bowls

In Basildon.

Mr. Amess

As my hon. Friend says, particularly in my constituency of Basildon.

For sport, there could be a new national stadium, built to the highest Olympic standards, a fully funded research centre for sports medicine and scholarships for aspiring young athletes.

Finally, the conservation of land and waterways and the preservation of wildlife could be accomplished with one year's revenue from a British national lottery. We are a nation of gamblers. Occasionally, we even gamble on the return of a socialist Government—always, as we know, with disastrous consequences. My hon. Friend's sensible proposal would realise, at the very least, over £1 billion, which would be well spent in those three areas.

When my right hon. Friend the Chancellor of the Exchequer presents his Budget next Tuesday, I hope that he will tell the House that he supports the introduction of a national lottery. I hope, too, that my hon. Friend the Member for Hyndburn will be given full credit for its introduction.

11.30 pm
Mr. Stuart Randall (Kingston upon Hull, West)

I, too, congratulate the hon. Member for Hyndburn (Mr. Hargreaves) on doing so well in the lottery for a place to speak on the subject of lotteries. I congratulate him on his choice of subject, because there is a momentum for their introduction. The hon. Member for Basildon (Mr. Amess) referred to a "lollipop" Budget. We remember that last year the hon. Member for Hyndburn promoted an excellent private Member's Bill. He introduced it in April, but with little success, I am afraid.

This is not a new proposal. The hon. Gentlemen referred to the history of lotteries and reminded us that the first state lottery was held in 1566, and the proceeds were used to rebuild our ports. There was also a certain amount of military spending at that time. We continued to have lotteries for about 100 years. In 1698, Parliament passed an Act for Suppressing of Lotteries that banned all lotteries except state lotteries. A lot of fiddling was going on. Lotteries had got out of hand and there were no controls over them.

State lotteries then began to go wrong, so the Lotteries Act was passed in 1832, which banned them. The Lotteries and Amusements Act 1976 perpetuated the ban on state lotteries. It permitted fund raising by local authorities and registered charitable organisations. A limit was placed on the amount that could be raised and the amount of prize money.

For many years, irrespective of whether there has been a Labour or a Conservative Administration, the policy has been not to stimulate demand unduly. We said that we would satisfy but not stimulate demand. A national lottery would lead to television publicity and other advertising. The hon. Member for Hyndburn would probably admit that there would be a need to stimulate demand. That would mean, however, a change of principle in our legislation.

It strikes me that something funny is going on in the Conservative party, and I cannot make out what it is—[Interruption.] I see that the hon. Member for Sheffield, Hallam (Mr. Patnick) agrees with me.

Mr. Irvine Patnick (Sheffield, Hallam)

No, I do not.

Mr. Randall

In the Financial Times of 24 February, the Prime Minister is reported as having asked the Treasury to investigate the possibility of introducing a national lottery. On 12 February, the hon. Member for Pendle (Mr. Lee) asked the Prime Minister for the latest on the lottery. Extraordinarily enough, the right hon. Gentleman replied: My hon. Friend raises an intriguing question."—[Official Report, 12 February 1991; Vol. 185, c. 730.] That was a funny sort of answer. It was almost as if he were trying to hide something.

On 13 March, another article suggested that the Chancellor would follow European practice on lotteries. Then The Guardian reported that the Chancellor might need a lollipop to give away because he was in such desperate straits over the Budget—it would be something to enliven what promises otherwise to be the deadest Budget of all time.

Mr. Lee

Could it be that the Government were conducting another fundamental review?

Mr. Randall

It could indeed. It is difficult to understand what the Government are up to. There has been a lot of flurry recently, and yet more indecision on the part of the Prime Minister. Perhaps the right hon. Gentleman is ruling nothing in and nothing out. We simply do not know what the man is about.

Nevertheless, the hon. Member for Hyndburn seems to have got his timing impeccably right, for which I give him credit. In his excellent speech, he covered the subject well—but he presented his lollipop just a week before the lollipop Budget. One week from now, we shall know whether the hon. Gentleman's ideas will be killed stone dead or given the kiss of life by means of new legislation. We shall have to wait and see.

What are the Government's motives? I am not as sanguine as the hon. Member for Hyndburn about the effects of 1992. The effects of the single market on lotteries have been mooted. The hon. Gentleman was right to point out that Britain is the only country in the Community not to have a lottery. Could the Germans, for instance, arrive here after 1992 and demand to be allowed to sell lottery tickets? The answer is that we do not know.

This is partly because the Commission has said in a White Paper that there will be no harmonisation of gambling legislation. That means that all the controls on gambling will reside with the Government. However, the hon. Member for Hyndburn has said that, although the Commission has taken a new line, after 1992 it will be tested in the courts and the case will be decided in favour of the claimants. Then, the Germans, who already have a lottery system, will be able to come over here and translate the tickets from German to English and because the computer system will already be in operation, we shall lose an awful lot of money.

I am not sure whether that is a fanciful scenario, but we need to know whether there is such a threat. The hon. Gentleman may be overstating the situation, but we need to know why the Prime Minister is making all these noises and creating all these uncertainties. Is it because he believes that 1992 will result in Germany or some other country coming in with its own system, or is it because there is useful money to be had? Is there a chance that we shall lose £1 billion a year? If that were to happen, British gamblers could be financing big projects in Germany.

The hon. Member for Hyndburn mentioned opera houses. As I was coming into the House, I was listening, on Radio 3, to a live transmission of an opera in Cardiff, from the New theatre. That theatre has been around for a long time, so it seems a tragedy that Wales, the land of song, still does not have its own opera house. The hon. Member for Basildon (Mr. Amess) was talking about Joan Collins making the draw, but if I am being fanciful, I should like Wales to have an opera house.

It would be ironic if this opportunity were to be lost, and the Germans, with their strong economy, were able to exploit the British market. Is that a threat or a risk? I am looking forward to the Minister's reply, because no doubt he is bubbling over with lots of ideas.

How would all this be organised? I am baffled, and I should like the Minister's advice. What sort of lottery shall we have? With all that well-prepared speech, the hon. Member for Hyndburn did not say much on that point. Will there be a state-run scheme or a private enterprise solution, with several competing lotteries? I refer the House to a debate in the other place, in which Lord Ferris said: A state lottery is a lottery run by government. That would involve the state in the promotion of gambling, and if that were the noble Lord's proposal—which as he explained, it is not—I am bound to tell him that it would not meet with the Government's approval, as it would run counter to our policies on deregulation and privatisation."—[Official Report, House of Lords, 28 February 1990; Vol. 516, c. 799.] That is a Home Office Minister saying that we cannot have a state-run lottery. It is extraordinary that such a scheme is being ruled out now.

The hon. Member for Hyndburn talked about £1 billion, but I think that the lottery would fall far short of that sum. Would the Secretary of State run the lottery, or would we have a lottery board? If there were a private free-for-all, I presume that it would be run by a private company or companies. What would be the guidelines for allocating funds? How would the Secretary of State determine his priorities? The hon. Member for Hyndburn referred to sport, the environment and the arts, but who would determine the priorities? It is clear that there are many complex questions to be answered.

If we were to have a lottery of the sort that has been proposed, I believe that there would be an overwhelming case for a state-run system. International experience suggests that the scheme would not be viable if there were a proliferation of lotteries. Even the local authority schemes—they are quite large—are beginning to die off. There is a problem of scale.

Mr. Ken Hargreaves

The hon. Gentleman's attention must have wandered during the relevant part of my speech. I explained that I was talking about one lottery. I am sure that that will be confirmed by Hansard. Perhaps the hon. Gentleman will outline the Labour party's attitude to lotteries and say what a Labour Government would do.

Mr. Randall

I recall that the hon. Gentleman explained that he was talking about a state-run system. As I have said, that runs contrary to what Lord Ferrers said in another place. How does the hon. Gentleman meet that dilemma? It would seem that a state-run lottery has already been ruled out.

Mr. Hargreaves

A single lottery is not necessarily run by the state. It can be run, as in Ireland, by an organisation on behalf of the Government. It is a nationwide lottery, not a state lottery.

Mr. Randall

What does "run by the Government" mean? The hon. Gentleman is saying that, if the lottery were to be run by the Government, he would rule that out. It seems that he is arguing that there could be an agency, a lottery council or a board or body that would be responsible for running the scheme. Surely that is splitting hairs. The creation of an agency to run the lottery would be the sensible approach. The Tote is an example.

The notion of proliferation is not sensible, because the lottery that the hon. Member for Hyndburn has in mind would have to be big and to offer big prizes, or the public would not be drawn to it. That rules out a free-enterprise solution, with competition and smaller lotteries.

It would be important that the benefits of a lottery went to the people and not to private companies as a result of them taking a cut. A national lottery would almost certainly become a monopoly, and I do not like private monopolies: a state monopoly is more acceptable. We have created private monopolies through the privatisation programme, and I consider them to be unacceptable.

A national lottery must be free of vice and corruption. It is necessary to ensure that all the tickets are drawn. If there were proliferation, the necessary controls would be almost impossible to implement. To be fair, the hon. Gentleman touched on the matter, but the impact on other forms of gambling would need to be examined—for instance, football pools. They are forbidden by law to advertise, yet the state lottery would almost certainly have to advertise. There would then be a question of unfair competition to be dealt with.

We would need to assess the implications for the Exchequer. The turnover from all forms of gambling is about £10 billion, of which the Exchequer gets a slice. We are talking about large sums of money, so we would need to work out what the taxation policy would be.

There is also the moral argument which I touched on in an intervention. We would be moving away from a policy of allowing gambling activities only at a level which meets unstimulated demand. That is a very important principle. If we were to move away from that, it would raise many questions.

Being a decisive party, the Labour party believes that a national lottery is a parliamentary matter, rather like Sunday trading. The Labour party would not use a three-line Whip to force anything through. Hon. Members would be allowed to decide on a free vote. The hon. Member for Hyndburn has given us his views about the attitude of the public, and we have a clear view on the matter.

When the Government tell us what their policy is, when they will present legislation and what form the legislation will take, we can start a debate. Of course, it is for the Government to bring the measure forward. We are the Opposition, and our job is to oppose, but at the moment we have nothing to oppose. We do not oppose what the Prime Minister has said. He has come up with so much gobbledegook that we need clarification. I look forward to hearing what the Minister has to say on the matter.

11.52 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Peter Lloyd)

I congratulate my hon. Friend the Member for Hyndburn (Mr. Hargreaves) not merely on his thoughtful and intriguing speech—I will not at this stage say "persuasive"—but on his success in securing the debate. As the hon. Member for Kingston upon Hull, West (Mr. Randall) said, success in these matters is in itself something of a lottery. One is particularly fortunate to obtain an early slot.

The early-day motion, to which my hon. Friend referred, has shown the considerable interest in this subject in the House. It is a subject to which my hon. Friend has given a great deal of personal time and effort over many years.

My hon. Friend the Member for Basildon (Mr. Amess), who made an enthusiastic supporting speech, conjured up visions of my hon. Friend the Member for Hyndburn filling his constituency so full of opera houses, art galleries and stadiums, all opened by Joan Collins, that I did not think that there would be enough room left for him and his constituents. Nevertheless, I took it that my hon. Friend the Member for Basildon represented a body of opinion that thinks that a national lottery could be of enormous benefit to a series of good causes.

The hon. Member for Kingston upon Hull, West made a characteristically cheerful speech, accusing the Government, and the Prime Minister in particular, of not making up their minds. I thought that that was rich, as he spent the rest of the time not being clear himself, and entirely baffling the House about Labour party policy. It was made clear only that Labour would allow a free vote —except that, if there was to be a national lottery, Labour would make jolly certain that it was nationalised. That was typical, and par for the course.

In recent months, the media have given considerable attention to the prospect of a national lottery. I am not certain to what extent that reflects wider public concern, but I noted the remarks of my hon. Friend the Member for Hyndburn about public opinion polls, and the informed intervention of my hon. Friend the Member for Pendle (Mr. Lee), who is chairman of the Association of Leading Visitor Attractions—and it is a topic on which I receive a steady flow of correspondence. If the recent publicity encouraged any betting on whether there would be a national lottery, that might already have generated some revenue for the Exchequer.

I will not recount the history of lotteries in this country, as my hon. Friend the Member for Hyndburn has already given some of it, or describe the existing statutory arrangements in any detail. However, any debate on the subject must take account of the present position. The last British state lottery was held in 1826, and small charitable lotteries have been allowed since 1846. The current relevant legislation is the Lotteries and Amusements Act 1976, which permits fund-raising lotteries for registered societies such as charities and sports clubs, or those of local authorities.

The maximum single prize permitted is £12,000, and the maximum turnover allowed is £180,000. Because of their scale, and because they benefit charitable or other good purposes, such lotteries are specifically exempted from gambling duty. About 50 per cent. of their turnover eventually finds its way back to the sponsoring charities. All other forms of gambling except on-course betting are taxed, and it is unlawful to promote or to conduct major lotteries based outside Great Britain.

That is the statutory framework within which any proposal for a national lottery must be seen. If we were to change the law—and I emphasise that it is a big if—to allow one or more large national lotteries, that would have to be done in a way consistent with the wider regime of gambling controls.

That throws up a number of difficult questions. to which there are not, as usual, any simple answers. I will highlight the main ones, but not necessarily in an order of priority. A constant theme throughout the debate was that a national lottery or lotteries could be justified only if the proceeds were used for charitable or similar purposes. The Government see no justification whatsoever for major lotteries that simply increase the already wide range of commercial gambling opportunities. I doubt whether any hon. Member disagrees with that assertion, which finds common ground outside the House as well and puts the debate in its proper context.

We have a more varied gambling industry than most other countries, and the Government have a duty to try to ensure that, to prevent fraud, gambling is properly regulated. But it is no part of Government policy to stop people gambling if they want to do so.

Equally, successive Governments, including the present Government, have taken the view that gambling should not be positively encouraged—a point made several times by the hon. Member for Kingston upon Hull, West. The application of that policy depends on the stakes involved. Lotteries already enjoy greater freedom to advertise because they are small and are run for charitable purposes. It may be that the heavy promotion required for a national lottery could also be justified, because it would be in aid of charities. However, it would certainly involve additional and positive encouragement for people to gamble. Also, it would almost certainly mean that the charities received even less than the 50 per cent. of the stake money that local lotteries currently produce—perhaps only about one third.

Turning to practical matters, the first question to consider is whether there should be one national lottery only or whether there should be a free market for any charity that wished to run one. There would, of course, have to be adequate regulation in either event to prevent fraud; but there are arguments for and against both approaches.

Many of those who favour a national lottery—indeed, I think all who have spoken in the debate—seem to favour a single national lottery. There are, of course, attractions in that approach, which was the one recommended by the Rothschild royal commission in 1978. But if we go down that road, we are faced with a substantial problem of deciding who should receive the proceeds and how such decisions should be made.

Let us first consider who should benefit. Should it be the arts, sport, the environment, charities, health care, young people or any of the other many good causes that feel that they deserve a share? Many good causes have been mentioned as possible recipients of money from a national lottery, but let there be no doubt that, for every claim, there are many other competing and equally legitimate interests.

If there were a single lottery, effectively authorised by the Government, should those decisions be made by the Government or by some other body? Some proposals have been made for some sort of body of trustees who would shoulder that awesome responsibility, but would they be accountable to Parliament, and if so, would Ministers still get drawn into decisions about who benefited? Would they have fairly strict guidelines within which to operate, or would they have free rein to allocate money to whatever good causes they wanted?

Tonight I do not want to even try to begin to provide answers to these questions. They are difficult ones and cannot be brushed aside.

Ms. Harriet Harman (Peckham)

Why not?

Mr. Lloyd

The hon. Lady asks why not. There are some large questions that need to be answered, but they need to be answered by a substantial debate, of which this evening's debate is one example, before we come to a conclusion. The hon. Member for Kingston upon Hull, West is clearly waiting to be guided by an upsurge in public comment, before he will even begin to say how he and the Labour party might react to such a proposal, if the Government introduced one.

They are difficult questions and the Opposition Front Bench was unable to shed very much light on them. Indeed, only some of the questions had occurred to the hon. Member for Kingston upon Hull, West let alone the answers. We need to be clear who would benefit and how decisions would be made.

One way to overcome the difficulties might be to allow a free market, in which the public could decide which charity lotteries they wanted to support. In that way, no one would be excluded from the benefits of a major lottery. Charities could group together either from choice or, in the light of competition, from necessity. It is likely that, in the long run, the public would identify the most deserving, or at least the most popular, causes and the number of lotteries would be smaller than at the outset. But even then, others could enter the market if they wanted to and felt that they could attract public interest and support.

This leads very conveniently into another of the complex issues that must be considered. What would be the effect of a national lottery on existing charitable lotteries, and charitable giving generally? We already have a free market for small charitable lotteries. I have recently received letters from those running small lotteries expressing concern that they will lose out to a national lottery. The total amount that they obtain from such lotteries may not be large, but they provide an essential supply of funds. It would be ironic if existing charitable organisations were to be the main ones to suffer from national lotteries intended to support good causes. There may be some ways of getting round these difficulties.

Mr. Ken Hargreaves

Will my hon. Friend give way?

Mr. Lloyd

I shall give way in a moment.

There is evidence that my hon. Friend knows of elsewhere that small lotteries could flourish with a major lottery, but as yet not all small lotteries are convinced of that. Certainly their worries need to be considered in more detail than I accept my hon. Friend the Member for Hyndburn had time for this evening—in more detail than a few reassuring phrases about what might have happened in the United States. This is one of the questions that needs close attention, especially on the part of those who are promoting the idea of a national lottery to help charities generally. If my hon. Friend still wishes to intervene, I shall give way.

Mr. Hargreaves

When he replies to the letters that he has received, I hope that my hon. Friend will supply all the evidence available. There is no evidence anywhere in the world to suggest that state lotteries have any detrimental effect. In fact, the reverse seems to happen: more people buy tickets because of the advertising. That is certainly true in Ireland.

Mr. Lloyd

I appreciate the confidence expressed by my hon. Friend, but he should communicate it to the many charities that have their doubts.

In addition to the proceeds of lotteries and many other fund-raising activities, charities and voluntary organisations receive support directly from the Government. In 1988–89, that amounted to about £2,000 million. The impact of a national lottery on the revenue yield from existing forms of gambling might put that level of support at risk. As I have said, we have a more varied gambling industry than most other countries. Many who advocate a national lottery suggest that it would generate new expenditure, not divert it from current gambling. That view is not shared by those likely to be affected. Football pools in particular, and also gaming machines, may be vulnerable. We cannot be sure what will happen at this stage, as the hon. Member for Kingston upon Hull, West pointed out.

We must take into account the possible revenue implications. At present, the revenue yield from gambling is about £1,000 million. The football pools, which are likely to be particularly affected, are taxed at 40 per cent., and pay an additional 2.5 per cent. for safety improvements made at football grounds. Given the threat that a national lottery would pose for them, they are likely to press hard for equality of treatment; but would a national lottery be workable if it were taxed at anything like the same level? Some hon. Members may feel that it would not. Indeed, many who advocate a national lottery assume that there would be no tax at all. On that basis, it might well attract money from existing gambling, and reduce the revenue received by the Exchequer. Those are difficult judgments, and, thankfully, they are not for me to make; nevertheless, they must be addressed.

Closer to home is the likelihood of pressure from some sectors of the industry for a level playing field in other respects. Not surprisingly, they would, in any event, want to be able to compete vigorously with the national lottery. In particular, they would want to be able to advertise more freely, and they would want other controls to be lifted. That would result in a substantial stimulation of the demand for gambling. Although that too is not necessarily an insuperable problem, it would be irresponsible to proceed without considering the wider implications.

One issue has come up several times—and the hon. Member for Kingston upon Hull, West, with furrowed brow, wondered what the rules were, and how it would all work out in 1992. I am talking about foreign lotteries. There is a fear—to which my hon. Friend the Member for Hyndburn addressed himself—that, after 1992, major lotteries from other EC countries will be free to operate in this country.

As I said earlier, at present, major lotteries from abroad are unlawful. The European Commission's programme for the completion of the single market does not contain proposals for the harmonisation of gambling legislation. As far as we are aware, the Commission at present has no plans to present any such proposals.

We believe that a good defence of our present prohibition on major lotteries could, if necessary, be made if the prohibition were challenged under the treaty of Rome as it stands. Our policy is that controls on gambling are matters for national authorities, and we believe that many other EC Governments would be likely to take a similar view. Our understanding is that, in general, they do not permit lotteries from other countries to operate on their territory.

As always when we are considering the impact of European developments, it would be wrong to say that circumstances will never change.

Mr. Randall


Mr. Lloyd

I give way to the hon. Gentleman. That is another circumstance that never changes.

Mr. Randall

I should like some clarification, because I am baffled. The Minister said that after 1992 other EC countries would be able to come here and sell tickets, yet afterwards he said that the European Commission would advocate a policy whereby the laws of each member state would prevail. It is confusing. What is the position?

Mr. Lloyd

I did not think that I had said that. If I did, I was not making myself clear. I think I was saying that there was some concern on the part of some hon. Members that, after 1991, foreign lotteries might sell tickets lawfully here, and I said that I did not believe that that would be the case, because gambling laws would remain the responsibility of national Governments and not be part of the single market.

As I also said, however, in considering the impact of European developments, it would be wrong to say that circumstances will never change. But I do not believe that the single market argument carries nearly so much force as some of the proponents of a national lottery suggest, and as my hon. Friend the Member for Hyndburn said. It is of course one of the many factors which should be taken into account along with the others that I have mentioned tonight, as well as some that I have not mentioned yet.

We have had, to use an appropriate word, a "useful" debate. I have certainly enjoyed it. I have been interested in what has been said. It is, however, a complex subject. I can assure the hon. Member for Kingston upon Hull, West and my hon. Friend the Member for Hyndburn that the Government are looking, and will look very carefully, at the views which have been expressed, both here and outside.

We do not believe that it would be right—here I come to a point at issue between my hon. Friend the Member for Hyndburn and the hon. Member for Kingston upon Hull, West—for the Government to run their own national lottery. If it was decided to proceed, it would be on the basis of one or more privately run lotteries subject to the necessary regulatory machinery. The Government are considering the many complex arguments for and against allowing such lotteries, and tonight's debate is a helpful contribution to that consideration. I am very grateful to my hon. Friend the Member for Hyndburn for raising the issue so that we could talk about it this evening.

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