ANNUAL REPORTS BY DISTRIBUTING BODIES OTHER THAN MILLENNIUM COMMISSION (Hansard, 28 April 1993)

§ The Parliamentary Under-Secretary of State for National Heritage (Mr. Robert Key)
I beg to move, That the clause be read a Second time.

§ Madam Speaker
I understand that it will be convenient to discuss at the same time the following: Government new clause 8—Accounts of distributing bodies other than Charities Board and Millennium Commission.

§ Mr. Key
It is a great pleasure to come back to the Floor of the House with the Bill. It is quite rare for a Bill to have been so amended in Committee. It gives me pleasure to say that, because we have been engaged on an important piece of legislation in creating the first national lottery in this country this century, and we have been determined to get it right. We have listened to representations from all parts of the political spectrum and from all interest groups that are involved or that might be affected. I have no doubt that the Bill today is better than the Bill on which we embarked in Committee some weeks ago. I thank all members of the Committee who made that possible. It was a constructive Committee and we had the benefit of a great deal of advice from beyond the Committee.
In Committee, I undertook to consider ways in which to ensure transparency of accounting for lottery funds. The new clauses would ensure that Parliament would be able to see clearly exactly how all funds from the lottery had been spent. Amendment No. 26 is intended to ensure the same. As our new clauses and amendments meet, I hope, the intention of amendment No. 26, tabled by the hon. Member for Cynon Valley (Mrs. Clwyd), I hope that she will accept new clause 7 and the other amendments and that she will withdraw her own.
965 The reason why I hope that the hon. Lady will withdraw amendment No. 26 is that the Millennium Commission is likely to have as one of its members the Secretary of State, so it would not be appropriate for the commission's report to he submitted to him before being laid before Parliament. I hope that the hon. Members who tabled amendment No. 26 will accept that our new clauses and amendments would meet their purpose.

§ Mr. John Maxton (Glasgow, Cathcart)
I know that in legislation the term "Secretary of State" is a generic term to cover all Secretaries of State. Where the new clause uses the words "Secretary of State" in terms of reporting for the Scottish Arts Council and for the Scottish Sports Council, does it mean the Secretary of State for Scotland and not the Secretary of State for National Heritage?

§ Mr. Key
It would be the Secretary of State for National Heritage, because it is our lottery.

§ Mr. Maxton
I find that a slightly odd reply in relation to Scotland. It is clear that the Scottish Arts Council and the Scottish Sports Council come under the Secretary of State for Scotland. They are his responsibility, he appoints them, and they report on all other matters to him. I do not, therefore, understand why the Minister says that on the issue only of the spending of national lottery money, the report will go to the Secretary of State for National Heritage. That seems a strange decision and I should like a slightly fuller explanation.

§ Mr. Key
It is really very straightforward. It is a national lottery and the Secretary of State for National Heritage is responsible to the House for the operation of the lottery. The Arts Council in Scotland is a sub-committee of the Arts Council of Great Britain as presently constituted. Next year, it will become the Scottish Arts Council in its own right and will then be answerable to the Secretary of State for Scotland. But the national lottery will be the responsibility of my right hon. Friend the Secretary of State for National Heritage, and he will be responsible to Parliament for it.

§ Mr. Tom Pendry (Stalybridge and Hyde)
This debate is turning into a bit of a lottery already.
I propose to speak to amendment No. 26, in the names of my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) and others. I am afraid that I must disappoint the Minister: we shall not readily give in unless we receive a satisfactory reply.
We consider it important that bodies distributing lottery proceeds should be fully accountable for their decisions. In that context, we believe that they should be required to report each year on the grants that they have made from national lottery proceeds.
The spirit of the Government's amendments is that bodies distributing lottery proceeds should be required to act in a responsible and transparent manner. That is fair enough and we accept that there has been some movement on that, but we believe that, as part of that commitment to responsible action, distributing bodies should be required to report each year on the grants that they have made. An onus should be placed on them to demonstrate that a proportion of their funds has been spent for the benefit of low-income groups. In our view, that would demonstrate a commitment to responsible action.
There is much evidence to suggest that low-income groups will contribute disproportionately to the purchase 966 of national lottery tickets. The report by DKM Economic Consultants commissioned by the An Post lottery company in 1990—a report of which the Minister knows because it was mentioned in Committee—concluded that participation in the lottery is fairly constant across all classes. That claim has been seriously challenged by Desmond Norton of Dublin university. In his analysis of the report's findings, Norton shows that, on the contrary, education and income are key variables determining spending on the national lottery. The skilled working class and the unemployed spend more on tickets than do the middle classes.
That finding is confirmed by earlier research conducted in the United States by Clotfelter and Cook. Research recently undertaken by Saatchi and Saatchi on behalf of the Sports Council supports the view that participation in the lottery will be weighted towards those in the lower income groups. That survey, which examined the public's intention as regards the purchase of national lottery tickets, suggested that a larger proportion of those in social classes C1 and C2 than in the AB category would be regular lottery participants. In his report on the national lottery for the Gulbenkian Foundation, Professor John Kay notes that the Saatchi and Saatchi findings are consistent with the results of the surveys in other countries. The general finding is that poorer people spend a larger proportion of their income on lotteries. Professor Kay quotes seven different studies that have reached the same conclusion.
The aim of the lottery is to raise money for the arts, sport, heritage, charities and the millenium fund. Many of us fear that a large proportion of lottery money will be spent on high prestige projects such as opera houses and historic buildings. We have nothing against opera houses and historic buildings, but we want them to be put in context. Research on the current patterns of use of such facilities shows that low-income groups are less likely to benefit from such projects than high earners. We may regret that, but it is none the less the case.
The evidence suggests, therefore, that the lottery could be a form of regressive taxation, obtaining money from the least well-off to finance services for the better-off to enjoy. Opposition Members believe it essential, therefore, that information should be available about the pattern of participation in lottery play.
The amendment places on lottery distributors a duty to report annually on the grants that they have made from their allocation. If purchasing patterns for lottery tickets mirror those in other countries, the distributing bodies should be able to show that their allocation is being used in some measure to benefit those on low incomes. That could include providing funding for the development of access programmes in the arts, sport and heritage, as well as ensuring that programmes that are currently of direct benefit to those on low incomes are properly supported.
The Minister rightly said that the Government had moved a good way to meeting the points made in Committee. I hope that the Minister will go that bit further and accept the spirit of the amendment.

§ Mr. Tim Renton (Mid-Sussex)
I apologise to hon. Members who were members of the Standing Committee for intervening in the debate on Report, as I was not a member of that Committee. However, as some of my hon. Friends will know, as Arts Minister, I was extremely active for 18 months in support of the cause of the national 967 lottery and in persuading my colleagues, including some rather intransigent colleagues at the Treasury, to support the idea.
The Treasury naturally objected to any idea of hypothecation of revenue and therefore to revenue going to causes outside its control. For 18 months, as the Arts Minister, I had a hard battle to win the Treasury round to my way of thinking. However, perhaps more of that later.
I listened to the comments of the hon. Member for Stalybridge and Hyde (Mr. Pendry) about amendment No. 26, and although I fully appreciate the social causes and motives which caused him to table his amendment, the idea that the national lottery should in any way be used to fulfil social objectives—objectives that are in themselves worth while—strikes horror in my heart. That cannot be the purpose of the national lottery.
If those who are to subscribe—one hopes weekly, for fun, entertainment and in the hope of winning £1 million and in the knowledge that, if they do not win, the money will go to good causes—become aware that there is a weighting in favour of social security objectives, it will destroy the whole purpose for which the national lottery is being created.
Of course I understand the point made by the hon. Member for Stalybridge and Hyde that some people may be more interested in the redevelopment of the Royal Opera house or in building a new museum of modern art for the Tate gallery than others. My right hon. Friend the Secretary of State, for example, on the Millennium Commission or elsewhere, will have to help people to take difficult decisions in due course. However, the aim must be to encourage people to take part in a lottery which is essentially for fun and for good causes as well.
If an underlying thought develops that there is a social security element and objective involved, the hon. Member for Stalybridge and Hyde would find that the take-up of lottery tickets, upon which everything depends, would be very much less than it would otherwise be. As a consequence, the whole purpose of the lottery, to raise substantial extra funds for heritage, sports, the Arts, for smaller charities and for the millennium fund will be lost.
The hon. Member for Stalybridge and Hyde rather gave himself away when, towards the end of his remarks, he said that the proposal could become a form of regressive taxation. We must avoid precisely the thought that this is taxation. If people come to believe that the lottery is a form of regressive taxation and a supplement to Treasury money, or a way of replacing money which the Treasury would otherwise have to provide to the Department of Health for hospitals or to the Department of Social Security for income support, the lottery is bound to fail.
Although I know that the hon. Member for Stalybridge and Hyde has a long-standing interest in supporting, encouraging and increasing sports facilities in this country, I believe that he should not press his amendment. The thought behind it is contrary to the spirit that is necessary for the national lottery to be the great success that hon. Members on both sides of the House hope it will be.

§ Mr. Joseph Ashton (Bassetlaw)
The House should be worried by the last line of new clause 7 which states that anyone who is spending money or receiving cash must put a report before the House, but 968 This section does not apply to the Millennium Commission. New clause 7, which is slipping through the House unnoticed is a perfect example of pork-barrel politics. Why should details about money given to the Millennium Commission not be reported to the House? The answer is simple. Anything spent in the year 2000 is likely to have a great effect on a general election that might be called in 2001.
Once the fund is established, anything linked to the year 2000 can be provided from a slush fund to buy votes. If we were at that stage now, the Government would be telling the managers of Newbury race course, "We will give you a new tote and some new tapes. You can run the Grand National here, so that the tapes do not break and everything does not go wrong. It is all to celebrate the year 2000; it has nothing to do with the Newbury by-election next week."
Already, the Prime Minister has been to Manchester and said, "We will back your bid for the Olympic games." Who will pay for that? Not the taxpayer. The Prime Minister has not obtained a single extra penny from the Treasury. No—he will dip his hand into the national lottery slush fund, and the Millennium Commission will get £60 million every year from now until the year 2000. The Prime Minister can spend all that lovely money, and he can say, "We, the Tory Government, have backed the Olympic games that will take place in the year 2000, and all those in marginal seats in the Manchester area—where we have created the jobs—should be desperately grateful to us."

§ Mr. Nigel Evans (Ribble Valley)
Will not the hon. Gentleman concede that the Government have already stated their intention of supporting the Olympic games and contributed £15 million towards the building of a new stadium in Manchester?

§ Mr. Ashton
They have not done so yet. They have said that they will back the games, but they have not given a penny, because no money has come in yet.

§ Mr. Robin Corbett (Birmingham, Erdington)
The Government cannot commit the money.

§ Mr. Ashton
Why not? It is to celebrate the year 2000.

§ Mr. Corbett
It is not within the Government's gift to spend a penny of the lottery money on their own say-so.

§ Mr. Ashton
My hon. Friend has been in the House for a long time, as have I. He must be very naive if he honestly believes that the Government have no method of shifting money from one project to another in order to gain votes and popularity.
What is to stop the Government from applying new clause 7 to the Millennium Commission? Why should not a report be presented to the House? The new clause states: The Secretary of State shall lay a copy of every report received by him under this section"— that is, clause 22, which applies to distribution, and indeed clause 23, which concerns the application of money— before Parliament. That, however, does not apply to the Millennium Commission.

§ Mr. Key
If the hon. Gentleman allows me to get a word in edgeways, I shall explain to him that the millennium fund is dealt with specifically by clauses 38 and 39.

§ Mr. Ashton
If I am wrong, I will withdraw what it have said. However, we shall not know whether I am wrong until about 1998, and by then it will all be lost in the mists of time. The matter will be the third item of the business on the Order Paper, and someone will come along at about 1.30 am and slip in an amendment of which no one else is aware. That is how the House and the Government tend to work.
A phenomenal, unbelievable amount of cash is involved; yet its control is very vague. It should not be thought that Governments do not give election bribes—especially a Tory Government who sold council houses for about a fifth of their value in order to win the 1983 election. Such bribes have been given many times.
Will the Minister tell us why, according to subsection (4) of the new clause, it does not apply to the Millennium Commission? Perhaps he will refer later to clauses 37 and 38.

§ Dame Elaine Kellett-Bowman (Lancaster)
The Millennium Commission is more tightly bound than any of the other bodies. Under clause 38, it must make a specific report. The clause states: the Millenium Commission shall lay before Parliament a report on the exercise of their functions during that year. That is a much more specific requirement than those applying to other bodies.

§ Mr. Ashton
The Government can do anything they like. The hon. Lady is saying that, once the Bill is passed, it is written on tablets of stone and nothing can be altered for the next six years. She must be very naive if she thinks that.

§ Mr. Peter Kilfoyle (Liverpool, Walton)
The Under-Secretary of State has mentioned clauses 38 and 39. Clause 39(2) states: The statement shall comply with any directions that may be given by the Secretary of State as to the information to be contained … the manner in which such information is to be presented or the methods and principles according to which such a statement is to be prepared. Does that not leave my hon. Friend with some forebodings about the amount of latitude that the Government will have on that statement?

§ Mr. Ashton
My hon. Friend knows exactly what I am saying. I do not trust any Government—

§ Dame Elaine Kellett-Bowman
Will the hon. Gentleman give way?

§ Mr. Ashton
Sit down. I shall not give way. I have given way five times in about three minutes.
The next general elections will probably be in 1996 or early 1997 followed by the year 2000 or 2001. My hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) is right to say that when a general election is approaching, the temptation to use the money on election bribes for any Government who face a difficult by-election will be irresistible. The Bill has built into it the facility for the Government to do so.

§ Mr. Maxton
I shall be brief. I wish to respond to the comments made by the former Minister for the Arts, the right hon. Member for Mid-Sussex (Mr. Renton), about 970 the speech of my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry). The right hon. Gentleman kept referring to spending money on social security. Of course that is not what my hon. Friend meant.
Some Opposition Members are worried that the spending of the money raised by the national lottery will be focused on London and on large, prestige projects. As my hon. Friend said, such projects benefit a few relatively wealthy people. We are worried, first, that the money will not be distributed throughout the country to provide access to the arts and sport to all people, wherever they may live in the United Kingdom; and secondly, that, even where the money is spent outside London, it will be spent on prestige projects which do not necessarily benefit the average person who buys the lottery ticket.

§ Mr. Michael Ancram (Devizes)
Is the hon. Gentleman making the case that per capita public spending north and south of the border should be the same? If so, Scots would suffer from his suggestion.

§ Mr. Maxton
The hon. Gentleman was at one time a junior Minister at the Scottish Office, but because he was stupid enough to introduce the poll tax, he lost his seat. If he had listened carefully, he would not have heard me mention Scotland or England once. I was not talking about the differences between Scotland and England. I was talking about outside London and inside London. That includes Manchester, Birmingham, Oldham and many places which ought to receive their fair share of the money spent by the ordinary people who buy lottery tickets throughout the United Kingdom. That is the point which I made and which the hon. Gentleman, deliberately or otherwise, misinterpreted.
I was not a member of the Committee. I will not apologise to the House for taking part in the debate on Report. It may now be the custom that only Committee members take part in debates on Report. The Report stage was originally designed specifically so that Members of Parliament other than those who served on the Committee could take part in the debate.

§ Mr. Key
What an interesting debate it has been. I was certainly delighted that several hon. Members from both sides of the House spoke who did not take part in the proceedings in Standing Committee.
The speech of the hon. Member for Stalybridge and Hyde (Mr. Pendry) resembled a speech which might have introduced amendment No. 195, which we are not to debate. However, I understand why he felt it necessary to discuss the point and raise the issue of how the money will be distributed.
It is important to make it clear, and I am grateful for the opportunity to do so, that the way in which the mechanism of the national lottery has been constructed will ensure not only geographical distribution across all interests but the distribution of large or small sums of money. The great advantage of our system—which is the envy of most national lotteries around the world—is that there are separate mechanisms for the distribution and collection of the money. Unlike most national lotteries, the money will not go into the coffers of the Treasury but will be distributed by boards and committees consisting of people and organisations who have the confidence of the recipient sectors. Therefore, I reject those arguments.
My right hon. Friend the Member for Mid-Sussex (Mr. Renton) is absolutely right to react with horror to the 971 amendment and the proposition it contained. It is not intended to substitute national lottery money for main programme spending, whether on social services, the health service, sport or anything else. That has been made absolutely clear.
The points that the hon. Member for Bassetlaw (Mr. Ashton) made were rehearsed at length in Committee, but they are none the worse for that. It is important that people recognise that important projects like the Manchester Olympic bid may well be eligible for applications to the Sports Council lottery committee, but it certainly will not be up to any Minister or the Millenium Commission to decide whether that project be in receipt of those sums.
The Government new clauses were promised in Committee, and they will ensure that all the distributing bodies will produce accounts and reports on the use of lottery funds separate from their other reports and accounts. The reports dealing with lottery funds will be made available to Parliament. The Government amendments are consequential upon the provisions in new clauses 7 and 8. The Millenium Commission is not covered by those new clauses. Although the Secretary of State will be a member of the Commission—and he may be its chairman—its report and accounts will be submitted directly to Parliament under clauses 38 and 39 and not to the Secretary of State. The report of the Charities Board will be covered by new clause 7, and consequential upon that clause will be the removal of clause 34.

§ Dame Elaine Kellett-Bowman
The Opposition Members who referred to the commission should note clause 39(3) states: Copies of the statement shall be sent to the Comptroller and Auditor General". A lot of people will keep a beady eye on that fund, so I cannot understand why Opposition Members should be so concerned.

§ Mr. Key
Neither can I. My hon. Friend is right to point that out.
The Charities Board will receive funds from the Secretary of State at first to cover start-up costs. Its accounts should include the use of that money, and for that reason clause 35 remains.
Government amendments Nos. 70 and 71 ensure that the definition of "financial year" covers anybody named under clause 21, whether now or in the future. Amendment No. 26, tabled by the Opposition, is intended to achieve the same end as the new clauses. I believe—and I hope that I have convinced the House—that that amendment is not therefore necessary.

§ Mr. Pendry
May I say to the Minister that I was surprised that he agreed—

§ Madam Speaker
Order. The hon. Gentleman requires the leave of the House to speak again.

§ Mr. Pendry
I understand. With the leave of the House I shall reply to the debate.
I was surprised that the Minister agreed with the right hon. Member for Mid-Sussex (Mr. Renton), because his speech reminded me of what my economics tutor used to say to me: "Answer the question I asked, not the one you wish I had asked." I never made the speech to which he has 972 referred. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) has answered all the points that the right hon. Gentleman raised, so I will not go over them.
The right hon. Member for Mid-Sussex said that the lottery had nothing to do with taxation, but he should talk to the charities, the Sports Council and the Arts Council about the 12 per cent. tax yield that the Chancellor of the Exchequer has placed upon the lottery. It certainly is about taxation as far as they are concerned.
I do not want to push our amendment to a Division. I think that the Minister, in a more reflective mood—and certainly those in another place—might pick up the points I have made more intelligently than some Conservatives have today.