HC Deb 20 October 1993 vol 230 cc350-8

Lords amendment: No. 13, in page 19, line 31, leave out from ("that") to ("under") in line 32 and insert ("may be promoted").

Mr. Peter Lloyd

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

With this we may take Lords amendments Nos. 14 to 20.

Mr. Lloyd

Lords amendments Nos. 13, 14, 17 and 18 simply tidy up the drafting of or are consequential on clause 47. However, Lords amendment No. 15 represents a change of substance. Its effect is to double both the proceeds and prize limits for a society or local authority lottery. The proceeds limit is increased from £500,000 to £1 million. As a consequence, the maximum single prize goes from £50,000 to £100,000.

We have taken that step in response to the strongly expressed arguments of many in the charities world. The new limits will further enhance the appeal of their lotteries and will help to ensure that they flourish side by side with the national lottery.

The purpose of Lords amendments Nos. 16, 19 and 20 is to give the Secretary of State a reserve power to set by order a minimum proportion of lottery proceeds that must go to the good causes if he feels that it would be in the interest of the good causes to do so. I commend the amendments to the House.

Mr. Pendry

We agree with this batch of Lords amendments; they are acceptable to us. When the Minister said that he responded to the strong words conveyed to him from the charities, he omitted to mention the eloquent arguments from the Opposition on behalf of the charities. It is a particular pleasure to see a sinner repent, and when that sinner is a Tory Minister it is even more pleasurable. I refer to the Minister specifically. He argued in Committee that a top prize of more than £500,000 would be detrimental to the aims of a national lottery. He went on to say that it would create a series of "mini national lotteries". Since then, wiser counsels have prevailed. With the benefit of hindsight, he can say that he was bent by our arguments —[HON. MEMBERS: "Bent!"] Not "bent" in the way that my hon. Friends mean. The Minister knows exactly what I mean.

As the Minister knows, we argued for a £1.25 million top prize, but we shall not quibble about the fact that the Minister has seen sense and has raised the level to £1 million for the top prize. That makes it far easier for charities to exist in the world that has now been set.

  1. (".—(1) Schedule 2 to the Betting, Gaming and Lotteries Act 1963 (registered pool promoters) shall be amended as follows.
  2. (2) In paragraph 13 (requirements with which the pool betting business of a registered pool promoter must comply) for sub-paragraph (e) there shall be substituted—
    1. "(e) the total amount payable by way of winnings shall, in the case of each competition, be calculated in accordance with paragraph 13A of this Schedule;".
  3. (3) After paragraph 13 there shall be inserted—
  1. "13A.—(1) In any competition the total amount payable by way of winnings shall be the aggregate of—
    1. (a) the total amount of the stakes in respect of entries in the competition, Less the relevant percentage of that total amount; and
    2. (b) any amount that has been duly carried over to the competition from a previous competition in accordance with any provision made under paragraph 14A of this Schedule;
    less any amount that falls to be carried over from the competition in accordance with any such provision.
  2. (2) In sub-paragraph (1) of this paragraph "relevant percentage" means such percentage as may be determined by the promoter, being—
    1. (a) the same percentage in respect of all his competitions which depend on the same events or on events taking place on the same day ; and
    2. (b) a percentage which is determined and notified to the accountant before that day."
  3. (4) In paragraph 14—
    1. (a) after "paragraph 13(d) or (e)" there shall be inserted "or 13A", and

The Government have said that their aim in amending the Lotteries and Amusement Act 1976 in part III was to enable voluntary organisations to maintain their small lottery income in the face of competition from the national lottery. During our debates on the Bill, one of our major concerns was the possible impact of the national lottery on charities. Charities will, therefore, welcome the national lottery if it provides additional resources for them, which they now feel confident will be the case. We especially welcome Lords amendments Nos. 15 and 16, but we support the whole batch of amendments.

Sir Ivan Lawrence

I am ambivalent about this concession to the charities. We must be careful to ensure that the national lottery is a success. I believe that, to some extent, we are diminishing the chances of that success, which was originally the Government's position. However, we can with a better grace give more money to the charities as we can see that the administration costs that they take are on average no more than 4 per cent.

This is a timely moment to remind ourselves that when we give money to the Arts Council, it takes about 9 per cent. to 10 per cent. in administrative costs. When we give money to the Sports Council, it takes about 30 per cent. in administration costs. I hope that my right hon. and hon. Friends who are concerned with the national lottery will keep a very close eye on the way in which the beneficiaries of this great enterprise use on administration some of the resources that should go to grass roots good causes.

Question put and agree to.

Subsequent Lords amendments agreed to, one with Special Entry.

Lords amendment: No. 21, after clause 53, insert the following new clause—Roll-over of prize money—

  1. (b) for "paragraph 13(e)" there shall be substituted "paragraph 13A".

(5) After paragraph 14 there shall be inserted—

  1. "14A.—(1) Subject to any directions under paragraph 14B of this Schedule, the rules applicable to any competition may provide that if none of the bets in the competition qualifies for, or for a share in, the first prize—
    1. (a) the amount of that prize shall be carried over to the next relevant competition, or
    2. (b) part of that amount shall be carried over to the next relevant competition and the balance shall be applied as mentioned in paragraph 14(1)(b) of this Schedule.
  2. (2) In sub-paragraph (1) of this paragraph—
    1. (a) "the first prize" means the highest prize that can be won, having regard to the outcome of the events on which the competition depends (and not any higher prize that could have been won had the outcome of those events been different),
    2. (b) "the next relevant competition" means the next competition to be held by the same registered pool promoter under the same rules within the fourteen days following the day on which the result of the competition is determined, and
    3. (c) the reference in paragraph (b) to part of the amount referred to in paragraph (a) is to such proportion of that amount as may be specified in the rules or as may be determined by the promoter in accordance with the rules.
  1. 14B.—(1) The Secretary of State may direct that any provision made under paragraph 14A of this Schedule—
    1. (a) is not to have effect, or
    2. (b) is to have effect subject to such limitations as are specified in the direction.
  2. (2) The limitations that may be specified under sub-paragraph (1)(b) of this paragraph include—
    1. (a) limitations as to the number of competitions from which amounts may be carried over, and
    2. (b) limitations as to the period within which any such competitions may be held.
  3. (3) Any directions under this paragraph shall be given in writing and may be varied or revoked by subsequent directions."

(6) In paragraph 15—

  1. (a) after "paragraph 13(d) or (e)" there shall be inserted "or 13A", and
  2. (b) for "paragraph 13(e)" there shall be substituted "paragraph 13A".

(7) In paragraph 20(1) (information relating to a competition which the promoter is required to include in a statement to the accountant) after paragraph (b) there shall be inserted—

  1. "(bb) the amount (if any) carried over to the competition from a previous competition in accordance with any provision made under paragraph 14A of this Schedule;
  2. (bbb) the amount (if any) carried over from the competition in accordance with any such provision;".

(8) In paragraph 21 (statement as to commission and expenses which the promoter is required to send to every competitor in a competition)—

  1. (a) in sub-paragraph (1)(a) for the words from "after deducting" to the end there shall be substituted "after making in respect of each of those competitions the deductions mentioned in subparagraph (1A) of this paragraph;", and
  2. (b) after sub-paragraph (1) there shall be inserted—

"(1A) In relation to any competition, the deductions referred to are—

  1. (a) a deduction of the aggregate of the total amount payable by way of winnings in the competition and any amount carried over from the competition in accordance with any provision made under paragraph 14A of this Schedule, less any amount carried over to the competition in accordance with any such provision, and
  2. (b) a deduction of the amount of pool betting duty payable in respect of the competition."

(9) In paragraph 23(1) (content of annual statement to be sent by registered pool promoter to accountant and registering authority) in paragraph (b) for the words from "after deducting" to the end there shall be substituted "after making in respect of each of those competitions the deductions mentioned in paragraph 21(1A) of this Schedule;".")

Read a Second time.

Mr. Pendry

I beg to move amendment (a) to the Lords amendment, in line 66, after 'paragraph', insert 'may'.

I have already put on record my pleasure at the distance that the Government have travelled to meet our concerns about the potential impact of the national lottery on the pools business and consequently on the jobs of many thousands of employees on Merseyside, in Cardiff, in Glasgow and in London.

From the earliest stages of the Bill, we have always maintained that the two operations, both long-odds and low-stake forms of soft gambling, would compete for similar markets. A number of changes have now been made to the Bill which give us and, far more importantly, the pools companies confidence that the industry and the lottery can exist side by side.

The decision to legalise the sale of pools coupons in shops was the first important step to allowing the pools to compete on fair and level terms with the lottery. The reduction of the minimum age of pools customers to 16, in line with the minimum age which the Government have told us will be applied to lottery customers, was the second step. However, we wish the age limit of 18 years to apply to the national lottery and the pools. Nevertheless, it was a move in the right direction for the pools, as was giving the pools the right to sponsor television and radio programmes unrelated to football. Finally, the acceptance by the Government that the pools companies should be given the same right to roll over their prizes as the national lottery heralded a real victory for reason and common sense.

It is worth recalling the Minister's words on Report. I hate to quote him too many times, but he said:

I am glad to be able to say that I am convinced that there is a good cause for allowing the football pools to operate limited rollovers similar to the national lottery … we intend to introduce our proposals in another place to ensure that, where rollover is involved, the pools will enjoy similar freedom and opportunity to those enjoyed by the national lottery."—[Official Report, 28 April 1993; Vol. 223, c. 1019.] That was said in response to my hon. Friend the Member for Liverpool, Broadgreen (Mrs. Kennedy) on Report.

8.30 pm

The Government introduced a new clause in the Lords, now appearing as Lords amendment No. 21, which permitted equivalent roll-over to the pools in the lottery.

There remains, however, one outstanding issue on roll-over which our amendment seeks to rectify and I hope that the Government will be minded to cede to our request. It concerns the three-month time limit that the Government may place on pool roll-over credits.

Under current Government proposals, it is only when a roll-over has occurred in the national lottery that a pools promoter will be allowed to roll over prize money. At this stage, and not before, a direction will be issued by the Home Office authorising a pools promoter to roll over money on one occasion for each type of competition he promotes, but, as I understand it, within a three-month time limit. At the end of three months, if there has been no opportunity to use the roll-over credit, it lapses. We object to that restriction, particularly as no similar measure is applied to the lottery itself.

If the three-month restriction were to remain, it is quite possible that the lottery would roll over a prize and in so doing enjoy the benefits of additional business that that would generate while the pools credit would expire before there was an opportunity to use it. Clearly, in this instance the lottery would be operating a roll-over on unfair terms and the commitment by the Minister of State would not have been met. I am sure that he recognises that it would be a pity if his generous spirit deserted him when meeting the arguments we ranged on Report and in Committee.

The likelihood of an unused roll-over credit is heightened by the very nature of the pools operation. Unlike the lottery, where it is possible to fashion games in a way that produces a high probability of roll-over jackpots, the pools are subject to the vagaries of match results, as the Minister knows. It is therefore impossible to predict the number of winning chances that may be created from week to week and consequently impossible for pools promoters to engineer roll-overs.

There have been several occasions in recent months when in a three-month period no match result sequence has produced the circumstances which would have allowed the operation of roll-over for the pools. In those circumstances, current proposals for a three-month time limit would have meant the pools missing out on an equivalent opportunity to roll over, placing them in an unfavourable and unfair market position in relation to the lottery.

I hope that the Minister understands the deep concern that we and the pools industry feel in this matter. It is not so much about persuading the Government to agree to the principle of equal treatment—that has already been conceded by them—as about ensuring that the Government carry out their promise of full and equal treatment.

I hope that the Minister will reflect and make a concession to meet that particular point. It may seem technical, or even a bit petty, but it is real for the pools industry. I know that it is grateful for the way in which the Government have moved on the arguments that have been put before them.

Mr. Peter Lloyd

As the hon. Member for Stalybridge and Hyde (Mr. Pendry) said, amendments Nos. 21 and 22 fulfil an undertaking that I gave the House on Report, in the debate on the new clause moved by my hon. Friend the Member for Crosby (Sir M. Thornton). They will give the pools companies the opportunity to roll over prize money on terms similar to those which apply to the national lottery by amending schedule 2 to the Betting, Gaming and Lotteries Act 1963.

The substance of new clause 58 is in subsection (5), which provides that, subject to any directions which may be made by the Secretary of State, a pool promoter may roll over part or all of the first prize in a pools competition in circumstances where that first prize was achievable but not achieved.

I am glad that the hon. Gentleman expressed himself pleased with the distance that the new clause had gone. I wish that I could be equally encouraging about the amendments which he ably moved. It is not so much that my good will has evaporated as that we have a difference of opinion, at least at this stage, across the Dispatch Box as to how the new arrangements would work and who would be at a disadvantage.

The hon. Member's amendments seek to remove any limit to the period in which the football pools could roll following a direction. The effect of this, however, would be to permit the football pools to accumulate credits for roll-over in such a way that they would have considerable freedom to pick and choose the occasions on which to take advantage of the opportunity that the credit gave them.

If, for example, there has been a roll-over in the national lottery, the football pools, knowing that they are likely to roll over with considerable frequency, may not use the direction on the first occasion that they do not have a winner. They might decide to wait until another time which suits their promotional purposes more readily.

We have to bear in mind the fact that the pools are free to change the rules of their competitions, and have done so only recently to make roll-over more likely. The jackpot draw which the pools companies introduced on 27 February this year makes it less likely that there will be a winner each week, and therefore more likely that there will be a roll-over.

Figures which the pools promoters have provided show that, in the six months following the introduction of the jackpot draw, the pools on average could have rolled over at least eight times each. If I remember correctly, for one of them it was up to 14 times, while I certainly do not expect the national lottery to do so more than two or three times a year. If there were no time periods to constrain them, they could plan with reasonable certainty to take the roll-overs in almost any month they chose. That would give them a significant advantage over the national lottery.

Roll-over in the national lottery will be purely by chance, and cannot be planned in advance. The football pools, on the other hand, could be given a considerable marketing advantage in being able to select a season. The national lottery is a new entrant in a competitive market, and I do not believe that it would be right to give the football pools such an advantage as amendments (a) and (b) seem to do.

The provisions of clause 58 and the direction-making power is designed to give the pools equality with the

("Committees

2.—

(1) The Charities Board shall establish four committees for the national lottery on roll-over, as the hon. Gentleman reminded me I said before. By that I mean that, if the national lottery rolls, the pool will roll.

Every pools company will have that ability in all the competitions which they run. It is not just the treble chance competition but any other competition as well. That means that, if the national lottery rolls twice, the pools will be able to roll twice, and if the national lottery rolls three times, they will be able to roll three times as well. The same limit on consecutive roll-overs will apply to both cases.

However, we are still in discussion with the pools promoters about the length of the time period in which roll-overs, once triggered, would have to be rolled. It would not be right to accept the Opposition argument for no limit. As the hon. Gentleman correctly said, we have been considering a three-month limit. The pools promoters have made representation that this period should be longer, and we are looking carefully at the arguments they have put to us.

However, there must be some time period so that the arrangements operate in a way that is fair to the national lottery and are clearly and readily understood by everyone. If there were no limits, the postponed use of roll-overs by some pools companies would make it difficult to determine how many they had owing to them and how many they had used. I hope that the hon. Gentleman will not press his amendments.

Before I sit down, I want to emphasise that the operation of the Home Secretary's direction-making power will be kept under review. The great advantage of such a power lies in its flexibility. If my right hon. and learned Friend judges that the restrictions and limits should be changed in the light of experience, he can set different ones. His aim —again I confirm this for the hon. Gentleman and the House—will always be to achieve, as far as is possible, a just and equal balance between the pools and the lottery.

I hope that that provides some reassurance for the hon. Gentleman—and other hon. Members who are concerned about that important matter—that the general principles agreed on both sides of the House will be those that we put not only into the law—the new clause contains that provision—but in the rules that the Home Secretary makes under that provision.

Mr. Pendry

The Minister has been most helpful. Of course I am disappointed that he has not accepted my amendment, but the manner in which he opposed it was constructive. I am pleased that talks with the pools operators will continue. The philosophy that the Minister espoused on Report is still with him. No doubt there will be a healthy clash between the hon. Gentleman and the operators and an acceptable solution will result. The pools companies are satisfied with the negotiations so far. I hope that those negotiations will continue to be satisfactory.

Amendment to the Lords amendment, by leave, withdrawn.

Lords amendment agreed to.

Subsequent Lords amendments agreed to, one with Special Entry.

Forward to