§ '(1) The Secretary of State shall by regulations made by statutory instrument prescribe the powers and duties of the Director General under this Part; and such regulations shall be subject to an affirmative resolution of each House of Parliament.
§ (2) The Director General shall exercise his functions under this Part in the manner he considers the most likely to secure—
- (a) that the National Lottery is run, and every lottery that forms part of it is promoted, with all due propriety, and
- (b) that the interests of every participant in a lottery that forms part of the National Lottery are protected.
§ (3) Subject to subsection (2), the Director General shall in exercising those functions do his best to secure that the net proceeds of the National Lottery are as great as possible.
§ (4) In subsection (3) "the net proceeds of the National Lottery" means the sums that are paid to the Secretary of State by virtue of section 5(6).'.—[Sir Ivan Lawrence.]
§ Brought up, and read the First time.
§ Sir Ivan Lawrence (Burton)I beg to move, That the clause be read a Second time.
§ Mr. Deputy Speaker (Mr. Michael Morris)With this it will be convenient to discuss at the same time the following amendments: No. 123, in clause 4, page 2, leave out lines 6 to 18.
§ No. 125, in clause 5, page 2, line 20, leave out 'body corporate', and insert 'charitable foundation.'.
§ No. 124, in page 2, line 39, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 126, in clause 6, page 3, line 7, leave out 'body corporate' and insert 'charitable foundation.'.
§ No. 127, in clause 11, page 5, leave out lines 23 to 29.
§ No. 128, in clause 19, page 9, line 9, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 129, in page 9, line 11, leave out 'Secretary of State' and insert 'The Director-General.'.
§ No. 130, in clause 20, page 9, line 15, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 131, in clause 22, in page 10, line 8, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 132, in clause 24, in page 10, line 28, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 133, in page 10, line 33, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 134, in page 10, line 33, leave out 'by order'.
§ No. 135, in page 10, line 37, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 136, in page 10, line 41, leave out 'Secretary of State' and insert 'Director-General.'.
§ No. 137, in page 10, line 44, leave out 'Secretary of State' and insert 'Director General.'.
1019§ No. 138, in page 11, line 1, leave out 'Secretary of State' and insert 'Director General'.
§ No. 139, in clause 25, page 11, line 6, leave out 'Secretary of State' and insert 'Director General'.
§
No. 140, in page 11, line 6, leave out
'by order amend section 20(3) so as to'.
§ No. 141, in page 11, line 8, leave out 'there' and insert in section 20(3)'.
§ No. 142, in page 11, line 19, leave out 'Secretary of State' and insert 'Director General'.
§
No. 143, in page 11, line 19, leave out
'by order amend subsection (1), (2), (3) or (4) of section 21 so as'.
§ No. 144, in clause 26, page 11, line 21, leave out 'to'.
§ No. 145, in page 11, line 23, leave out first 'to'.
§ No. 146, in page 11, line 25, leave out 'to'.
§ No. 147, in page 11, line 26, leave out 'to'.
§ No. 148, in page 11, line 28, leave out 'amendment' and insert 'change'.
§ No. 149, in page 11, line 28, leave out 'the amended subsection' and insert 'it'.
§ No. 150, in page 11, leave out lines 37 to 42.
§ No. 151, in page 11, line 44, leave out 'an order', and insert 'decisions'.
§ No. 152, in page 11, line 45, leave out 'order' and insert 'decisions'.
§ No. 153, in page 12, leave out lines 1 to 5.
§ No. 154, in clause 27, page 12, line 18, leave out 'Secretary of State' and insert 'Director General'.
§ No. 155, in page 12, line 18, leave out 'by order'.
§ No. 156, in clause 29, page 13, line 9, leave out 'Secretary of State', and insert 'Director General.'.
§
No. 157, in page 13, leave out 'the order under section 26(1) mentioned in that paragraph has been made' and insert
'action has been taken in accordance with section 26(1).'.
§ No. 158, in page 13, line 12, leave out 'order' and insert 'action.'.
§
No. 159, in clause 58, page 22, line 20, leave out
'on such date as the Secretary of State may by order appoint; and different dates may be so appointed for different provisions or for different purposes',
and insert
'six months after receiving Royal Assent.'.
§ No. 197, in schedule 2, page 24, line 30, after 'staff, insert 'and advisers'.
§ No. 160, in page 24, line 30, leave out from 'determine' to end of line 32.
§ Sir Ivan LawrenceI can without immodesty claim some part in the conception of the thoroughly desirable institution of a national lottery that will benefit such good causes as the arts, sport, heritage and charities. Therefore, I have a kind of parental interest in the Bill. However, I am alarmed at the direction in which it looks as though the legislation is moving.
Before I explain my reasons, may I say how immensely grateful I am to my right hon. Friend the Member for Mole Valley (Mr. Baker) who, when he was Home Secretary, took up the idea of a national lottery for good causes, and to my right hon. Friend the Prime Minister for the imagination that he showed in making the national lottery an election commitment. I am also grateful to those of my right hon. Friends who have changed their minds on 1020 the matter and now support the idea, to my right hon. Friend the Secretary of State for National Heritage and his Parliamentary Under-Secretary of State, and to the Minister of State, Home Office, my hon. Friend the Member for Fareham (Mr. Lloyd), for turning the idea into a reality and for dealing with everyone's concerns so sensitively as the Bill has passed through its Committee stage and is now passing through its remaining stages. I hope that my right hon. Friends will treat what I am about to say with their customary consideration and seriousness, and that nothing that I say will be taken as diminishing their achievement.
In a nutshell, I am unhappy to see the national lottery developing alarming features which are not at all what I had in mind. First, there is far too much involvement by the Secretary of State and the Government, and too little independent arm's-length control without Government interference. Secondly, big business will be involved. What I had in mind was a lottery sponsored and supervised by the Government but run in all its essential elements not by big business but by a charitable foundation.
I was not permitted to serve on the Standing Committee, doubtless on the usual ground that the fewer people serving on a Standing Committee who have any knowledge of the subject the better, because such people would delay the proceedings with questions and suggestions for improvement. Even after the closer consideration that the Bill has been given in Committee, it is still beginning to look very different from what I had in mind.
I am encouraged to know that I am not alone in believing that the Government should keep the lottery at arm's length, and keep it as charitable as they can. Paragraph 13.62 of the report of the Royal Commission that considered a lottery from 1976 to 1978 said:
One of the most appealing features of an independently administered but state sponsored national lottery for good causes is that it escapes or by-passes the normal Government decision making procedures for resource allocation. In practice, a Government of any party, subject to day to day public and political pressures, finds it impossible to devote more than meagre resources to good causes of the kind that are desirable rather than essential. But the paradox is that while each individual cause may not be essential, it is essential for the health of our community that some resources are devoted to such purposes. There is a crucial need in our society for a source of substantial funds to provide support of a kind with which any Government experiences great difficulty. The objective should not be to replace the function of central Government but rather to fill the gap created by the inevitable disappearance, in a society where the accumulation of private wealth has become much more difficult, of private support of worthy causes on a large scale. (There will be no new Nuffield Foundations.) The proceeds of a national lottery should not only be allocated outside the normal Government machinery: they should be immune, subject to annual scrutiny by Parliament, from Government influence.My right hon. Friend the Member for Mole Valley said, when he made his contribution to the matter, that he—I cannot for the moment find the quotation—
§ Mr. Deputy Speaker (Mr. Michael Morris)Order. May I assist the hon. and learned Gentleman? He is presumably looking up his quotation about the powers and duties of the director general. That would help us forward.
§ Sir Ivan LawrenceOh yes, Mr. Deputy Speaker, of course I am addressing the matter of the director general and the charitable foundation, which are the subject 1021 matter of the amendments selected by Madam Speaker. I am not wandering one inch away from that, but I must—
§ Mr. Deputy SpeakerOrder. For a few seconds the hon. and learned Gentleman did not appear to be wandering anywhere. I was just trying to help him.
§ Sir Ivan LawrenceThat was very kind, Mr. Deputy Speaker, and I am sure that a little good humour will leaven what might otherwise might be the tedium of my argument. I was saying that my right hon. Friend the Member for Mole Valley, the former Home Secretary, also supported in his speeches the idea that the national lottery should be kept at arm's length from Government.
On the second limb of my amendments, the Royal Commission said:
In this way a public body which we suggest should be called the National Lottery Board, analogous to the charitable foundations established in former yews by individuals, would help many good causes across a wide spectrum of different activities. A national lottery for good causes is, therefore, a rare opportunity to improve, indirectly if not directly, the quality of British life.The Royal Commission had in mind a charitable foundation, not a lottery run by big business.Sadly, although those two matters are fundamental to the direction that the national lottery will take, I believe that no amendment along the lines that I have suggested was tabled in Committee, nor was the point extensively argued or discussed, if it was discussed at all. Unfortunately, when I made my speech on Second Reading I did not remember that I had been called at a time when there was a 10-minute limit on speeches, so just as I was about to voice my concerns about the Bill, I was stopped. If the Official Report is correct, I was stopped a minute before my time. Had I had that extra minute I would have been able to float the subjects and they would have been taken up in Committee. That is why I have been left to table the amendments and the new clause, which I hope the Government will consider.
I believe that the Government should be more at arm's length from the lottery, because what is needed in that great enterprise—it is an exciting, fun enterprise, which we hope will stimulate the British people's imagination—is not the dead hand of the state, which the Government have turned away from everywhere else, but the imaginative stimulation of an independent decision-making procedure.
An agency is needed. In every other area, we are moving towards agencies at arm's length, agencies with directors general, and we should not be inhibited from following here the same process which we think is so important in many other areas of our political life.
So long as the Secretary of State has control of the purse strings, the state lottery will be vulnerable to the greedy and lustful attentions of any future hard-pressed Chancellor of the Exchequer. I hope that Conservative Chancellors will not be hard-pressed or greedy as the years move on, but we cannot guarantee that that will be the position for all time.
It was the intention of my right hon. Friend the Member for Mole Valley not to substitute lottery money for money that might be raised by taxation. He said in the House that he was against additionality. He said:
Once fully developed, it could raise up to £1 billion a year for good causes. I must emphasise that this will be additional funding. The Government do not intend that the money 1022 provided from the lottery should substitute for existing expenditure programmes. Nor do we believe that lottery proceeds should go to the main areas of public expenditure, such as the national health service. These services are of fundamental importance to the community and must continue to be funded by the Exchequer in the normal way." —[Official Report, 6 March 1992; Vol. 205, c. 563.]I apologise to my right hon. Friend for the way in which I have delivered what would have been a perfect delivery coming from him.7.30 pm
The point is this. Where is my right hon. Friend the Member for Mole Valley? He is no longer Home Secretary and no longer a Minister in charge of these matters. He is now on the relatively powerless Back Benches with the rest of us. Such undertakings cannot be guaranteed from Government to Government. All that can guarantee that there will be no additionality is the enshrinement of protective measures in the Bill. The most important of those would be to take away the power of the Secretary of State to control the running of the national lottery. That point should be enshrined in the Bill.
§ Mr. Ian McCartney (Makerfield)There is already additionality in the national health service budget. Scanners, for example, are provided almost entirely through public subscription by the running of local lotteries and other activities. Of the 78 scanners purchased in England, 52 were purchased by the local community and the resources for them are still being provided by the local community. The Department of Health gives no money for the maintenance of those scanners. The problem raised by the hon. and learned Member for Burton (Sir I. Lawrence) is already happening. The Government should address themselves to his comments and should give some concrete commitment. If they do not, additionality will come into play in a range of other services.
§ Sir Ivan LawrenceI half agree with the hon. Member for Makerfield (Mr. McCartney). I see no reason why the desire of the community to raise money for important equipment for its local hospital should be stopped, but I am concerned that no part of the essence of the national health service or of any such vital control activities should be funded out of the national lottery. Such areas should be funded out of taxation in the normal way and that should remain the case. There should be no temptation for the Government to use the national lottery for such purposes, and that is why I quoted the words of my right hon. Friend the Member for Mole Valley. As the Minister then in charge of the lottery, he stated that view.
§ Mr. Andrew Hargreaves (Birmingham, Hall Green)My hon. and learned Friend spoke of the relative powerlessness of Back-Bench Members. It was such relatively powerless hon. Members who secured from the Minister a valuable commitment, which is embodied in new clause 7, that bodies that receive funds from the national lottery will have to account wholly separately for the moneys they receive. Although that will not ring-fence the money in the way that some people would like, it will bring about total transparency so that all of us in the Chamber and people elsewhere can see how the funds are being used. We can then make our own comparison with Government funding.
§ Sir Ivan LawrenceThat is a substantial step forward, and I welcome it as my hon. Friend the Member for Birmingham, Hall Green (Mr. Hargreaves) has done. However, when the Minister turns to Back-Bench Members, whatever their power, and says, "It is vital for the maintenance of the national health service that we should decide to use some of the lottery money," will my hon. Friend go into the Lobby against the Government and against the party? He may well be as brave as some of my hon. Friends have been in the debates on the Maastricht treaty, but the point is that they are not winning. With the best will in the world, ring fencing cannot be achieved unless we take away some of the powers given to the Secretary of State. I say nothing against him personally, because I know that he will operate the lottery with as much good will as is humanly possible.
I have no doubt that the same undertaking that there would be no additionality was given about the Irish state lottery. But, as a journalist said in The Irish Times last week, the Irish lottery is accused of deviating
so far from the original intentions of providing funds for arts, sports and community development, and it has largely become a slush fund to buttress inadequate Exchequer spending.I do not know how accurate that view is, but I believe that it shows that, six months or so into a national lottery, it can be easy for a modern Government to turn to the lottery to fund some of their necessary state expenditure.We must realise that the more money is taken in tax from the lottery, the less will be available for art, for sport, for heritage and for charities. Irish state funding for sport was reduced dramatically shortly after the lottery started. The purposes of the lottery have been modified and sport has suffered. Ireland still does not have enough Olympic-sized swimming pools, and it has almost no large sports arenas. As Mary Harney, a prominent Irish politician, said last week at a conference in England on the national lottery, there is a need to make the lottery "politician-proof".
The lottery will be tax-productive enough without tax being deducted from the institution itself at source. It will generate thousands of jobs. It will make small businesses and corner shops more productive and thus keep them in existence. It will stimulate the sport, arts, heritage and construction industries. Increased taxes will roll in. If so much power is given to the Secretary of State that he is able to introduce taxation at source for the lottery, the good causes will lose out all along the line.
That is why I tabled amendments Nos. 123 and 127, with 24 consequential amendments. I suggest in those amendments that the powers given to the Secretary of State should be transferred to an arm's-length director general. Amendment No.124 seeks to delete the requirement that the licensee shall pay such sums of money to the Secretary of State as the Secretary of State shall from time to time require.
The new clause would strengthen the powers of the director general. I hope that I am not alone in preferring a national lottery that is not in the Government's pocket. If the public believe it to be a Government activity, they may say, "We have given already" when the lottery seller invites their participation. Sport, arts, heritage and charities will be the losers.
The reasons why I believe that the lottery should be run as a charitable foundation are linked to my first point, as 1024 has been accepted in the grouping of amendments. People will support a charity, but they will be less willing to support the Exchequer. A charitable foundation properly led and guided by philanthropists can be better trusted to spend the money than a Government—even this Government—can be.
There are even more cogent reasons for having a charitable foundation rather than big business in control. The pools, which are big business, manage to devote only 27 per cent. of their take to prizes, while 32 per cent. of their turnover goes in expenses and profits.
A recent article in one of the national papers reported the expectations of prospective operators as being £100 million of profit a year. I have nothing against profit; our free enterprise system depends on it. However, if that profit diminishes the purposes of the national lottery, and if it deprives art, sport, heritage and the charities of £100 million a year, I am against it. We set up a national lottery so that the money should go to those causes.
The more big business becomes involved for profit, the more difficult it may prove to keep the workings of the national lottery free from abuse and scandal, either of which would destroy public confidence in the institution. Those involved in organised crime will be looking with greedy eyes at the profits of lotteries. A charitable foundation, properly run and controlled, will make their intervention less likely.
For those reasons, I have tabled amendments Nos. 125 and 126, which provide that the director general may license a charitable foundation to run the lottery, and not a body corporate—in other words, big business. I hope that I will not be alone in preferring a charitable national lottery to a lottery run by big business. The public are more likely to respond if they feel that a profit is not being made out of giving for good causes.
The new national lottery that is shortly to be born will be an immense force for good. When it gets going, the quality of our nation's life will benefit immensely. Up to £3 billion of additional finance will be raised, and £1 billion will be available to use for good causes. There will be improvements in our sports, with more stadiums, running tracks and swimming pools; in our arts, with enormous scope for more theatres and music; in our heritage and the protection of our national history and buildings; and in our charities—although they may or may not be adversely affected by the idea of the national lottery.
Perhaps most important of all, our children will grow up in a society t hat is physically and mentally healthier. They will have less need to take to the streets or look to crime for diversion or peer approval. Our society will be calmer, safer, healthier and more stable.
We must get the national lottery right: it must not get off on the wrong tack. I believe that the dead hand of Government and the dangerous and unnecessary hand of big business in running what is essentially a chartiable undertaking—which will be enormous fun if it is properly run—are simply not desirable. If my hon. Friend the Under-Secretary of State does not have time to consider these important measures today, I hope that he will at least undertake to think further on them. I look forward to the issue being pursued further—if necessary—in the other place.
§ Mr. Austin MitchellI support new clause 10 and the amendments grouped with it, especially amendment No. 197, which provides that the director general may appoint 1025 such staff as he may determine. The intention behind the new clause and amendments is to stop the Government hijacking the national lottery, which they seem to me to have done. The amendments provide the basis for a hands-off operation to be conducted by an independent charitable foundation totally independent of the Government rather than by a profit-making organisation —not least because such arrangements will generate more trust among those in the community.
The arguments are simple and straightforward. The hon. and learned Member for Burton (Sir I. Lawrence) has covered them, so I shall be brief. There can always be the imputation of political patronage in the allocations determined by a Government body or agency. That imputation is always there and will always be made. The hon. and learned Member for Burton quoted The Irish Times, which talked of the Irish lottery being used as a slush fund: political imputations were being made about the allocations. This Government sincerely and honestly trust this Government. We can say objectively that they are as pure as driven slush, but there is always the imputation that the funds will be used in that fashion unless an independent charitable foundation handles them. I want to ensure that that happens, and the amendments provide the basis for that.
7.45 pm
The amendments tackle a second problem—the danger that the Government will use the proceeds of the lottery as a substitute for funds allocated to the arts, sport or other purposes which should properly be sustained by the Government. The lottery promotion company, which put forward the idea of the establishment of a charitable body to run the lottery, has sensibly suggested that: the management of that arm's-length structure should include representatives of the Arts Council, the Sports Council, the National Trust and so on. That will ensure not only proper co-ordination but that the lottery money is not being used as a substitute for Arts Council or Sports Council funding. The lottery represents a great opportunity, but if lottery money is simply used as a substitute for other forms of spending that are properly the responsibility of the Government, that opportunity will be missed.
We must ensure that we are talking not about substitute spending but about additional spending. In that sense, an independent body—particularly a charitable foundation —could act as a court of appeal. These days, if one develops an enemy on the Arts Council, one does not get one's grant. if there is an additional source of funding in the form of an independent charitable body, there can be a court of appeal.
A further great advantage of a charitable body is that it will enable us to avoid both the bureaucracy of a governmental body and the profiteering orientation of a lottery run by a private company. We certainly want to avoid the high administrative expenditure attached to other bodies. Amazingly, the Arts Council costs £7.8 million a year in administrative expenses alone. The administration costs of the Sports Council are £9.5 million a year and the regional arts bodies cost £8.3 million a year to run, which means that 20 per cent. of the money that they distribute goes in administrative expenses.
It is crucial that the punters know that all the money is going to dedicated purposes, that the overheads are low and that the lottery is run by a charitable organisation that 1026 they can trust. An independent charitable organisation can also give the lottery a long-term sense of purpose rather than its zig-zagging every which way in response to pressures from the Government.
The lottery represents one of the most exciting opportunities that we have had for many years. It gives us the opportunity to bring facilities to areas outside London, and I am anxious that money should be spent on a considerable scale outside London.
I used to go on holiday every year to a little village called Beg Meil in Brittany. It was enormously exciting to find that it had its own maison de culture—a centre for the performing arts, for exhibitions and for workshops and where facilities were made available for craftsmen and artists. All that was provided locally for a small community of about 1,000 people. Just think what the opportunities would be if we could provide in Grimsby the sort of auditorium that we need to attract theatre companies and to put on local performances, orchestral concerts, opera and pop. Most communities—indeed all communities—need such facilities, which could be provided from the funding that the national lottery will provide if it is efficiently and effectively run.
We have the opportunity of a cultural renaissance and provision of facilities on a huge scale outside London in communities which need them and which are deprived of them at present—if we run the national lottery on the proper basis for which the amendments provide.
§ Mr. CorbettI shall be very brief. Ever since the idea of a national lottery was first mooted, there has been a debate about the best basis on which to establish it. The Library issued an intriguing note in January about the history of lotteries in Britain. It seems that they all collapsed in scandal. Although memories of such things may not he fresh in the minds of those in the Department of National Heritage, I have no doubt that they are fresh in the minds of those in the Home Office. If we are to run a lottery for the purposes set out in the Bill, all the best and sensible steps must be taken to safeguard the interests of those who participate in the lottery so that some of their ticket money goes to good causes.
I understand the amazement of the hon. and learned Member for Burton (Sir I. Lawrence) about the fact that the Government have chosen to run the lottery almost as a nationalised lottery instead of relying on the private sector to deliver it with the necessary safeguards from this place.
We debated such issues on Second Reading and in Committee. We must ensure that the moneys generated by the national lottery in no way substitute for the proper investment of public funds in the good causes listed in the Bill. It is proper that there should be concern about that point.
We were frustrated when we tried to write that provision into the Bill, partly because it was not the Committee's concern to set the level at which the Chancellor of the Exchequer would dip his fingers into the price of tickets, and partly for the broad reason that levels of spending by Governments year on year will alter for a variety of reasons, some good and some bad. There is no reason why those levels should not change over time.
It is difficult to nail down something that is moving. We have now decided that we want what my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) has described as transparent accounts so that, as the hon. 1027 Member for Ribble Valley (Mr. Evans) said, when we see the accounts and compare them with the level of Government spending in that financial year, we can draw our own conclusions about whether any substitution has taken place.
The ambition to avoid substitution is perfectly clear and I believe that that ambition is shared by hon. Members on both sides of the House. On those grounds, there is a great attraction in the new clause and the amendments suggested by the hon. and learned Member for Burton. However, I must point out to the hon. and learned Gentleman and to my hon. Friend the Member for Great Grimsby (Mr. Mitchell)—I saw the Home Secretary in the Chamber a moment or two ago and perhaps he has been bought another pair of shoes—that it is not clear from the amendments whether the setting up of a charitable foundation would mean that no tax would be payable on the price of a ticket.
If there is any form of tax, one of the ambitions to make it impossible for the Government to engage in substitution would go out the window. While there is a tax, demonstably it can be altered over time. It can go up or down and I suspect that I know in which direction it is likely to go.
In an enterprise of this kind, we are concerned to ensure that there is more to it than simply the making of money. It is not that we are anti-profit, but the exercise is not wholly or mainly about putting dividends into the pockets of private people. The whole purpose of the lottery, as described by the Secretary of State, the Minister and others, is to raise new money for the good causes on the face of the Bill. If that is the case, I see risks in relying on the private sector to ensure that that is achieved in an open and accountable way, as is broadly proposed in the Bill, because the private sector will face other pressures.
The Minister may want to think very deeply about my next point before the lottery is up and running. Under the arrangements proposed by the Government, the lottery will rely to a large extent on the competence of the people in the distribution bodies who will need to build on and extend the skills that they presently exercise when handling money from Government by way of grants.
My hon. Friend the Member for Great Grimsby referred to what, on the face of it, appears to be a fairly high proportion of the moneys that go on administration. The Minister will be as aware as I am of criticisms which are made from time to time about what I would broadly describe as bureaucracy around the Arts Council and the Sports Council. Such claims are perhaps easily made.
The Sports Council, the Arts Council and similar bodies were designed to listen to, meet and represent the constituent bodies that are part of the particular sectors of sport, the arts or whatever. Trying to make such a body more accountable and democratic will cost more in administration than a purely commercial exercise. There is a price tag involved, although it need not be a large amount.
That is a price worth paying to achieve that involvement. It is also a price worth paying to have bodies that are open and accountable to those on whose behalf they were set up by the House and, in addition, 1028 accountable to the House where—if not on the Floor of the House then through the Select Committee system—they can be asked to explain what they have been up to.
I do not want to finish before paying tribute, as I am sure we all do, to the work of Denis Vaughan, the executive director of the Lottery Promotion Company. He has been extremely persistent in his efforts to get a national lottery off the ground. He feels—I perhaps share this sentiment to some extent—that his case, which is reflected in the amendments, has not received a satisfactory response from the Government. The Government have not established whether their proposal is unarguably better than the charitable foundation route suggested.
Even at this late stage, and before the Bill goes to another place, the Government should take another look at the mechanics and return to the position as it was when we set out to put the Bill on the statute book. We should try to have a system that can persuade people that there is no intention to have substitution. Although I accept that, it must be demonstrated. Perhaps we can find a better way to demonstrate that to people whom we want to participate in the national lottery.
§ Sir Ivan LawrenceI welcome the tribute that the hon. Gentleman has bestowed on Denis Vaughan and the Lottery Promotion Company, but does he realise that Denis Vaughan is not alone in his view? Millions of people would prefer the lottery to be run as a charitable foundation, rather than as big business: they would like it to be a free foundation, rather than being in the grip of the Secretary of State and the director general.
§ Mr. CorbettThat is an important point, but, although the mechanics involved in achieving the desired result are not unimportant, the central issue is substitution. I would have been more impressed by the case that has been made had it been founded on the principle that the Chancellor should take no tax from a charitable foundation. That may or may not be possible.
I know that the Government are aware of our concerns. Perhaps, in the other place, they will find a way to demonstrate that the fears expressed by some hon. Members today bear no relation to their intentions.
§ 8 pm
§ Mr. KeyI pay tribute to the work that my hon. and learned Friend the Member for Burton (Sir I. Lawrence) has done for some years. He must be very proud of the progress that the Bill has made, but he must also be frustrated by the fact that it is not proceeding in the exact form that he planned. Having read the debate that he secured just over a year ago, before the general election, I know that his idea of a national lottery attracted wide support—and someone else who has attracted wide support and has campaigned for years is Denis Vaughan, to whom tribute has already been paid.
Let me answer some of the specific points that have been made before dealing with the principles. New clause 10 seeks to allow Parliament to prescribe the powers and duties of the director general by affirmative resolution of both Houses; that, of course, is already in the Bill. Amendment No. 127 would leave the Secretary of State with no means of controlling, for example, certain sorts of game that might be considered undesirable on social policy grounds, but which would not give the director general similar cause for concern.
1029 Amendments Nos. 124 and 128 to 158 would change the director general's role entirely: instead of taking sole charge of the regulation of the lottery and the licensing of the game—which together would constitute no small task —the director general would also have a controlling role in the distribution of the money available for good causes.
One of the strongest points that emerged from the consultation period that followed the White Paper's publication last year was that the functions of running the game and distributing the money should be kept separate. The powers that the amendments would give the director general would allow him to decide on, for example, changes in the shares going to each of the five beneficiary sectors and on the matters that the distributing bodies should take into account when deciding on grant applications.
Amendment No. 160 would give the director general complete discretion in regard to the number of staff in Oflot, and their pay and conditions. Amendments Nos. 125 and 126 would make it a statutory requirement that the licence to run the lottery, and the licences to run games as part of the lottery, could be held only by a charitable foundation. There is nothing to suggest that a charitable organisation would be able to introduce a more successful United Kingdom lottery than any other organisation. Amendment No. 159 would remove the Secretary of State's power to enforce the Bill's provisions as appropriate—a power that is not unusual in legislation.
My hon. and learned Friend the Member for Burton is inviting us to go back to the drawing board—to produce a completely different national lottery. Let me make it clear that the Government have been thinking about and working on the lottery idea for more than a year. We have sought advice widely; we have examined the experience of more than 50 lotteries around the world. We have taken a view on a number of difficult issues and have come up with an animal which is indeed rather different from the original proposals of my right hon. Friend the Member for Mole Valley (Mr. Baker) before the general election. We have done that for good reasons—precisely the same reasons that my hon. and learned Friend the Member for Burton now suggests that we consider.
First, there is the suggestion that the lottery should be politician-free. Everything that the Bill is designed to achieve is indeed at arm's length from Ministers. Ministers will not be able to decide who is given any money; that will be entirely up to the distributing bodies. We decided to establish more than one such body, for the good reason that a single body would constitute another substantial bureacracy, duplicating the expertise that already existed in the bodies we chose—the Sports Council, the Arts Council and the National Heritage Memorial Fund. We decided that, rather than establishing a single ministerial-led body to deal with charities, it would be far better to establish a system with the charities board that would have the confidence of charities, which would know that it would distribute money fairly between charities and across the nation.
A different set of considerations apply to getting the money in. We felt that the efficiency of the lottery should be paramount and that the maximum possible sum should be raised for good causes. There are various ways of approaching that aim. We decided that the most efficient private-sector operations should be invited to compete and that competitive tendering was most likely to put 1030 downward pressure on profits, to ensure that excess profits were eliminated and to maximise the efficiency of the machinery for securing the money.
There is, of course, another overriding factor, in the form of the members of the public who are to part with good money. The main objective of the lottery is to provide fun and prizes for those who put up the stakes. We decided—admittedly, it was not a difficult judgment to make—that the chance of winning was what would encourage people to have a bit of fun, in the same spirit in which they might buy a raffle ticket for their local church or a political party. We felt that people's motives for taking part in a national lottery would be quite different from their motives in giving money to a charity or other good cause at a time of crisis. We believe that those motives will continue to flourish in this country, as in others. There should be no confusion in people's minds between charities and the efficiency of a national lottery.
§ Mr. TraceyThe House appreciates the way in which my hon. Friend is setting out the argument, but he must be aware that, in one regard, the lottery is not politician-free. I refer to the level of taxation. The public, and the various good causes that will receive the proceeds of the lottery, are still very unhappy, even with a 12 per cent. rate. I know that my right hon. Friend the Chancellor said that he had originally envisaged a higher rate, but 12 per cent. is still too high.
§ Mr. KeyI was coming to that, as they say. The taxation issue is crucial. My right hon. Friend the Member for Mole Valley and others always envisaged a tax take; it is a fallacy to pretend that, if the whole operation were run as a charitable foundation, it would somehow escape taxation. Taxation is right for a national lottery because expenditure is displaced from other parts of the economy on which tax would be levied.
§ Mr. RentonI apologise for interrupting my hon. Friend in full flood, but I must tell him that I disagree with his comment about the White Paper produced by my right hon. Friend the Member for Mole Valley (Mr. Baker). As Minister for the Arts at the time, I played a part in its composition: perhaps over-optimistically, we felt that we had a real chance of getting away with no tax at all. [Laughterter..] I understand why hon. Members laugh at our naivety, but I am merely taking up my hon. Friend the Minister.
I fully understand the work that has gone into developing the model in the past year, and that other models around the world have been looked at. But, as my hon. Friend will know, the Irish national lottery, which I visited twice and which impressed me with the way in which it was run, pays no tax. It is an arm of the treasury, but it pays no tax. We hoped that perhaps we would get
Another point that my hon. Friend may consider—forgive me, Mr. Deputy Speaker; I shall bring my intervention to a close soon—is that the real difficulty is that if an arts company already does not find favour with the Arts Council for subjective reasons, perhaps because it does not like the quality of its performances, and therefore does not receive the amount of subsidy for its current expenses which it feels that it deserves, it will have to go back to the same lady bountiful for its capital requirements from the national lottery. It could lose on both counts.
§ Mr. KeyMy right hon. Friend is far more experienced in the art of politics and the art of the possible than me, but he was perhaps over-optimistic in thinking that there might be no tax on the national lottery. Of course, he was there and I was not. If he says that that is what he and the Government envisaged at that time, I accept it. But it was always my understanding that it was accepted that there would be some level of taxation.
The point on which I shall finish is central to the argument about the national lottery. We decided that it was crucial that, if changes were to be made to the lottery, they should be made by Parliament. We decided that Parliament should have the last say and that the operators and distributors should ultimately be responsible to Parliament through the Director General of Oflot and my right hon. Friend the Secretary of State for National Heritage.
Probity and transparency are fundamental to the success of a national lottery anywhere in the world. Once there is any idea in the minds of the public that a fiddle is going on at any level, the first thing that happens is that receipts drop off sharply. That is why we have improved the transparency and accountability of the lottery since the Bill first appeared, as we have been requested to do. But we do not want a director general of some charitable foundation to decide who gets what. We believe that the construction of the lottery with 20 per cent. bands is sensible.
We shall come to the millennium fund later. We believe that it should receive 20 per cent. After the millennium, the amount will reduce and that money will go to the other four areas. So Parliament will have the final say. It will be able to change the 20 per cent. distribution figures. Parliament will be responsible for ensuring that there are fair shares for all the beneficiaries and that the Government keep their word on additionality.
We could not have been more clear about additionality. It would not have been possible to make it clearer that the money for the national lottery was outside the planning total and that we have no intention of substituting it for other money. However, ultimately substitution will be in the hands of the distributors. For example, if a distributor in sport slips into the habit of giving grants for parts of sport which would normally be funded by a local authority or the Sports Council, it will have only itself to blame if in future years a Chancellor of another political hue said, "They are funding that themselves now."
The intention is clear. We have done all that we can. I hope that I have answered my hon. and learned Friend in the serious way in which his arguments should be addressed. He invites us to start again and produce a different model of national lottery. His new clause and amendments would certainly have that effect. They would take us back to the drawing board. I could not recommend that to the House for a good reason. Every day that we delay the implementation of the national lottery, good causes will suffer.
§ Sir Ivan LawrenceWith the leave of the House, Mr. Deputy Speaker.
§ Dame Elaine Kellett-BowmanObject.
§ Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)Order. The hon. and learned Gentleman has the right to reply.
§ Sir Ivan LawrenceI thank my hon. Friend the Minister for his helpful and well-meaning speech. I appreciate that the argument is not one-sided. Things can be said on both sides—[Interruption.] If my hon. Friend the Member for Lancaster (Dame Elaine Kellett-Bowman) will allow me to think without babbling away behind me, I shall be grateful and my remarks will be shorter.
I fail to see how my hon. Friend the Minister can sustain the argument that the national lottery will be politician-free in the light of clause 11, which says:
The Director General shall in exercising his functions under sections 5 to 10 comply with any directions that he may be given by the Secretary of State.8.15 pmClause 5(6) clearly states:
A licence under this section shall include a condition requiring the licensee to pay to the Secretary of State at such times as may be determined by or under the licence such sums out of the proceeds of lotteries forming part of the National Lottery as may be so determined.He who pays the piper calls the tune and he who takes the money also calls the tune. That is the politician.It would be sensible if I did not press the new clause at this stage because it is clear that the Government of a year ago had a different view from that of the Government of today about how the national lottery should proceed. If such a change can take place, perhaps with a little more time the change can be reversed. That time will be provided by due consideration in the other place. That consideration will not be helped if I press the new clause tonight. So with the leave of the House, I beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.