HC Deb 01 June 1998 vol 313 cc54-83

'.In Section 25 of the 1993 Act (Application of money by distributing bodies) after subsection (4) there shall be inserted—

"(5) A body shall distribute any money paid to it under section 24 only in areas that are not the responsibility of government.".'. —[Mr. Spring.]

Brought up, and read the First time.

5.36 pm
Mr. Richard Spring (West Suffolk)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael J. Martin)

With this, it will be convenient to discuss the following: New clause 3—Additionality (No. 2)— `. In Section 25 of the 1993 Act (Application of money by distributing bodies) after subsection (4) there shall be inserted— (5) A body shall not distribute any money paid to it under section 24 where it would substitute for funds that would otherwise have been provided by conventional public expenditure.".'. Amendment No. 7, in clause 7, page 8, line 37, leave out 'such'.

Amendment No. 2, in page 8, line 39, leave out from `environment' to end of line 40.

Amendment No. 3, in page 9, line 9, at end insert— '(5) The New Opportunities Fund shall be a body for the purposes of sections 24 to 27 and 34 of the 1993 Act.'. Amendment No. 4, in page 9, line 10, leave out from beginning to end of line 30.

Mr. Spring

In Committee, we had the extraordinary experience of seeing Labour Members voting, again and again, against their own manifesto commitment. The irony appeared to be lost on them, which is a reflection of their attitude toward their manifesto.

The new clause would bring additionality to the heart of the Bill. Of all the important issues relating to the Bill, it is on additionality that there is a huge gap between what the Government avow and what they are actually doing. The Government claim—no doubt we shall hear it again today—that they remain committed to the arm's-length principle, but, by any objective standard, that is manifestly not true. We shall clearly outline that failure in Government thinking this afternoon.

The Government claim to be holding to the principle of additionality, but, again, that is demonstrably not true. The proposals to deprive the original good causes of a share of the proceeds of the lottery are designed to enable the Government to divert money to finance their failing political agenda. That is a shabby piece of opportunism, made worse by the Government's hypocrisy and their determination to maintain that they are not breaking the principle they so vigorously sought to defend when in opposition. In Committee, the Government rejected Opposition amendments that would have clearly enshrined, without a shadow of doubt, the principle of additionality. The Minister rejected them, saying that although the Opposition had made a reasonable attempt to define additionality, we had not been successful in doing so. That argument lies at the heart of the Bill.

We remain deeply concerned about the precedent set by the Government's decision to divert money from the good causes for which the lottery was originally set up to matters such as health, education and, eventually, environmental projects. We are trying again to persuade the Government of the virtue of our thinking and the importance of maintaining the integrity of the national lottery. We are trying to persuade them to incorporate a requirement to adhere to the principle of additionality in the Bill, in an effort to prevent the Bill from being a form of voluntary taxation and, indeed, an outpost of the Treasury. I trust that, this time, on further reflection, the Minister will not so airily dismiss the points made by the Opposition.

The Prime Minister's commitment to additionality was made clear in the White Paper, "The People's Lottery". The definition in new clause 3 is, apparently, that preferred by the Secretary of State for Culture, Media and Sport. The White Paper clearly stated that the Labour party was not abandoning the additionality principle. The Prime Minister is quoted as committing the Government to additionality when he said: We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities". We entirely agree with that. If only the Government could act according to the spirit of the Prime Minister's comments.

New clause 2 is based specifically on the point made by the Prime Minister. It would insert in section 25 of the National Lottery etc. Act 1993, which deals with the application of money by distributing bodies, a new provision, subsection (5), which says: A body shall distribute any money paid to it under section 24 only in areas that are not the responsibility of government. I trust that the Minister will recognise that wording, which echoes the words of the Secretary of State, and the integrity of what the Opposition are trying to do to ensure, in turn, the integrity of the national lottery.

Mr. Robert Maclennan (Caithness, Sutherland and Easter Ross)

Will the hon. Gentleman clarify whether, in terms of the new clause, he believes that the arts should not be regarded as being within the responsibility of Government?

Mr. Spring

It is perfectly fair for the right hon. Gentleman to refer to the arts. Of course that is an area on which Government money has traditionally been spent. The difficulty with the Bill, as he will be aware, is that it deprives the arts of money and, because lottery money may be substituted for Government money, it thereby deprives the original good causes of an additional sum. That is the danger about which many people in the arts are legitimately concerned.

I hope that the Government will not dismiss new clause 2 by claiming that it uses an inadequate definition of additionality. New clause 3 is based on the definition that the Secretary of State says that he prefers. In Committee, the Government rejected an Opposition amendment that would have enshrined in the Bill the principle of additionality and—I make this point very clearly to Government Members—that was identical to an amendment tabled by Labour Front-Bench Members during the passage of the 1993 Act. There we have it. The Minister for Arts dismissed the amendment, claiming that it was a reasonable effort, but an inadequate definition—it was Labour's own definition. That demonstrates that Labour's view of what is additional has been changed to accommodate its new proposal—to grasp money from the existing good causes to put towards its political agenda.

On Second Reading, the Secretary of State said: I shall quote …a passage in the reply given to the Select Committee on National Heritage, as it then was, in July 1996 by the then Secretary of State for National Heritage, the right hon. Member for South-West Surrey (Mrs. Bottomley). She said very clearly—this is the precise definition of additionality: `Lottery funds are not intended to substitute for funds which would otherwise have been provided by conventional public expenditure'. We stand firmly by that principle; there is nothing in the Bill that undermines it."—[Official Report, 7 April 1998; Vol. 310, c. 162.] New clause 3 would, therefore, insert in section 25 of the 1993 Act, which deals with the application of money by distributing bodies, a provision that: A body shall not distribute any money paid to it under section 24 where it would substitute for funds that would otherwise have been provided by conventional public expenditure. I trust that the Minister recognises that the wording of the new clause comes directly from that of the Secretary of State. If Government Members reject the new clause, we shall be in the ridiculous situation whereby they reject the Secretary of State's words. We are making it easy for the Secretary of State. How can he seek to reject his own words? I trust that he will have no objection to the inclusion of the new clause in the Bill.

The reason why the Opposition object so strongly to the new opportunities fund—this is why we tabled the new clause—is that it flagrantly breaches the additionality principle. The lottery was established to fund initiatives—it was done with cross-party support and true nobility of intent—that are additional to core Government spending programmes funded from taxation. As my right hon. Friend the Member for Huntingdon (Mr. Major) said on a number of occasions, these are areas that have traditionally been under-resourced by Governments of whatever political complexion.

5.45 pm

No one can seriously believe that the Government are committed to additionality in practice. The hon. Member for Hove (Mr. Caplin) certainly does not. In an outbreak of candour that must have had his pager humming for at least 48 hours, he said in an "On the Record" interview: I think what we said in Opposition was clear, and it was right at the time that the lottery was introduced. But what we have now is a situation where the Budget spending level is set, and we have said that we are going to stick to that level for two years. I think it's right that a Government can say, 'We have a different view of how the lottery should operate.' That is a view that we've consulted on. We've received the consultations back and we're now developing a Bill to reflect these priorities, so I don't think there's anything wrong with that. I don't think they're compromising the lottery in any way". All I say to the hon. Member for Hove is that if he does not recognise Alice in Wonderland, here it is in black and white. He no doubt now has a bright future behind him.

The new opportunities fund represents a significant departure from the original purpose of the national lottery, which was set up to fulfil a Conservative manifesto pledge to restore our heritage and promote projects which will become a source of national pride".

Mr. David Prior (North Norfolk)

Does my hon. Friend agree that the only safeguard against diverting lottery funds into core Government spending areas is for the money to be distributed by bodies that are genuinely at arm's length from the Government, and that it is the breach of the arm's-length principle which compromises additionality more than any other factor?

Mr. Spring

My hon. Friend is exactly right because the centralising, control-freak tendency that is part and parcel of the way in which the Government seek to do business, and which is manifest in the Bill, is damaging to the future success of the lottery.

The Government claim that the Bill is a matter of fine-tuning the national lottery and that it only puts right problems that have arisen since the creation of the lottery. There are, indeed, elements of the Bill to which we have no objection. However, the Government's view that they are remaining true to the original principles on which the lottery was established certainly does not have foundation. The Secretary of State has affected to be mystified that the Opposition have not been lining up to support the Bill.

I simply challenge the Minister to explain how the homework clubs, child care and teacher training that he proposes to fund from the lottery accord with its original aims, which were set out in 1992, to restore our heritage and promote projects which will become a source of national pride". They do not—that is the simple truth. The original intention of the national lottery was to focus on areas of expenditure that were traditionally under-resourced by Government.

The initiatives that have been put forward under the umbrella of the Bill fall directly under the remit of the Secretaries of State for Education and Employment and for Social Security. Apparently, they were rejected by the Treasury and the Secretary of State's great friend and admirer, the Chancellor of the Exchequer, who was not prepared to spend taxpayers' money on them, so the raid on the lottery has taken place. Of the schemes that the Government propose to fund from the new opportunities fund, teacher training, education and public health programmes have traditionally—there is no escape from this—been funded by general taxation. The Government admitted that in a series of written answers.

The proposals are the thin end of the wedge. The legislation will give the Government power to divert money to any of their pet projects, providing an alternative to money from taxation. The Government's response to that accusation is that they have not breached the additionality principle, that the initiatives that they have announced are additional to core spending and that Governments have not previously funded such programmes. That is simply untrue.

Mr. Tim Collins (Westmorland and Lonsdale)

Does my hon. Friend agree that matters are getting worse? If the lead story in today's issue of The Times is to be believed, the Chancellor has imposed an absolute cap on public spending for the remainder of the Parliament. That will mean that raids on the lottery will increase in frequency and in scale.

Mr. Spring

My hon. Friend makes exactly the right point. There has already been an increase in Government spending, with European Union rebates and a Treasury underspend. More and more will be taken from the lottery because all the early pledges on education and health are manifestly failing, and people clearly know that.

It is flagrantly incorrect to say that the Government are somehow separating spending on the proposed new programmes from what has gone before. That is sheer sophistry. Even if the initiatives were genuinely new, they would still fail the additionality test because they relate to areas for which Governments traditionally accept responsibility—health, education and the environment. In Committee, the Minister for Arts amply demonstrated the absurdity of the Government's case when he was challenged by my hon. Friend the Member for Eastbourne (Mr. Waterson) to provide an example of spending that would breach the Government's new definition of additionality.

My hon. Friend said: I have repeatedly tried to think of a project that would breach additionality under the new, wholly elastic definition, but have not been able to do so. I hope that the Minister will be able to give one or two examples, and I would be happy to give way to any member of the Committee who can. The fact is that additionality will now mean whatever Ministers want it to mean. Of course it was impossible to find an example; perhaps the Minister can work harder to try to find one today. Under the Government's new, narrower definition, no spending breaches the additionality principle, provided it is additional to existing spending. However, spending from the lottery is, by definition, additional.

The fraudulent nature of the Government's case was clearly demonstrated by the Minister's wholly inadequate responses to my hon. Friend the Member for Eastbourne. The Minister employed the traditional Front-Bench trick of trying not to answer questions. He said that there were no examples of breaches of additionality because the Government had not breached the principle. He said: The hon. Member for Eastbourne was incapable of finding an example of expenditure that had replaced Government funding. That holds true throughout the history of the national lottery under the previous Government and during the past year under this Government. When challenged to refute the suggestion that the Government had introduced the Bill specifically to breach the additionality principle, the Minister fell back on the Secretary of State's definition, which is, effectively, "If it is lottery money, it is by definition additional." He said: It is vital to make a distinction between grant and aid, or core Government expenditure, and expenditure by the national lottery. At the third attempt, the Minister at last came up with two examples that would not be eligible for money from the new opportunities fund because they would breach additionality. He said: The hon. Member for Eastbourne asked whether it would support hospital beds or text books. He wanted an example of Government expenditure that would not be eligible for the fund and, inadvertently, gave two such examples. The fund will not fund hospital beds or text books."—[Official Report, Standing Committee A, 30 April 1998; c. 125–32.]

However, under the Government's definition, there is no reason on earth for the new opportunities fund not to fund text books and hospital beds in due course. We shall simply wait to see. We already know that it will fund the digitisation of material in public libraries and services that are already offered by general practitioners. It will simply be a short leap to text books and hospital beds, or whatever is politically expedient, to echo the words of my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) about the supposed rigour of the Chancellor's public spending limits.

The Government will pay for teacher training from the new opportunities fund although they have already admitted that they currently provide £296.8 million to train serving teachers under the grants for education support and training programme, approximately 5 per cent. of which is spent on information technology training. Money from the budget of the Department for Culture, Media and Sport is spent on training library staff despite the fact that the Government plan to use the lottery for such funding.

Tellingly, the Chancellor announced in his pre-Budget statement that the Government intended to set up child care schemes, the cost of which would be met by the Treasury and the new opportunities fund. He did not even seek to disguise that fact. He said: Funds will be available to set up as many as 30,000 new out-of-school clubs, which will provide places for almost 1 million children. The total cost over five years is £300 million, which is now budgeted for in our plans and represents the biggest ever investment in child care. The cost will be shared between the Exchequer and the new opportunities fund …A national child care strategy is no longer the ambition of workless parents; it is now the policy of this country's Government". —[Official Report, 25 November 1997; Vol. 301, c. 777.] There was no attempt to disguise the fact that, according to the Chancellor, Government policy is being paid for by the lottery. Despite the Secretary of State's claim that out-of-school-hours activities are not part of core statutory school provision, which course it is, of course, the Government's responsibility to fund, it is clear that the Government already provide money for out-of-school child care initiatives from the Department for Education and Employment budget. There we have it in black and white; it totally contradicts the spirit of what the national lottery was destined to be when it was set up, and it certainly contradicts the basis on which the lottery has been such a success.

Healthy living centres will compete either with NHS services, particularly those of GP fundholders and other primary health care providers, or with private sector health clubs, or both. Almost all the services that the healthy living centres will provide are already provided by GPs through the taxpayer-funded national health service. It is arguable that the whole basis of the NHS has moved further towards the provision of primary care. That was highlighted and emphasised in the White Paper, "Health of the Nation", and it is encouraging that, in the past few years, there has been such a focus on primary care and preventive medicine. The White Paper makes it clear that healthy living centres are to be part of the Government's health care provision. The document states: healthy living centres will play an important role in the Government's public health strategy".

Mr. Ivor Caplin (Hove)

Hear, hear.

Mr. Spring

The hon. Gentleman says, "Hear, hear", but we are debating taxpayer-funded activities within the NHS being paid for by the lottery, at the expense of good causes. If, after sitting for weeks in Committee, he does not understand the importance of that, he understands nothing. The Government's published analysis of the responses to the White Paper makes it clear that many of the responding organisations, such as local government, health, education and voluntary service organisations, were concerned that the new opportunities fund would simply be used to replace rather than add to core Government spending.

The document states: A section of respondents from the education sector argued strongly that some of the proposed areas of activity and interest in the New Opportunities Fund, (as well as NESTA), especially the training of teachers and librarians to use and teach information and communications technology, and out of school hours activities are core to the education mission. There were doubts and uncertainties amongst the same groups about whether the principle of additionality could be adhered to. Some education authorities and professional bodies as well as campaign groups were clear that this principle would not continue to be supported over time, and that this should be faced up to openly".

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The respondents to the White Paper who strongly supported the establishment of the new opportunities fund demonstrated, in doing so, how clearly the Government are breaching the additionality principle and how the lottery is destined to become, tragically, the engine of the Government. Many of those respondents were concerned that initiatives funded by the lottery should be co-ordinated with other aspects of Government policy. "Analysis of Responses to the Lottery White Paper Proposals" states: There was a very positive welcome for developing Information and Communications Technology training programmes for teachers and librarians, consistently linked with the proviso that the programme should fit in with other DFEE initiatives. There was a particular concern that the apparent synergy between this White Paper and the Excellence in Schools White Paper should be captured. The Excellence in Schools White Paper proposes to increase levels of literacy, numeracy and information and communications technology skills. It was important that the Lottery initiative neither conflicted with nor repeated these initiatives". Similarly: For example, one local authority said that it hoped that the development of Healthy Living Centres would be firmly placed within the broader public health remit of the White Paper Our Healthier Nation". In Committee, Labour Members not only made it clear that they supported the Government's decision to breach the additionality principle, but unashamedly admitted that they looked forward to taking credit for some of the Government's schemes. I can just imagine, as the next general election approaches, lottery-funded schemes being sold as being somehow a Government initiative, paid for by the taxpayer and of some great benefit, purely for party political reasons. My hon. Friends and I had the clear impression that Labour Members were simply drooling at the prospect of this raid on the lottery providing things that they might find electorally attractive in their constituencies. As the expert in these matters, the Minister for Sport, will know, photo opportunities galore appear to be very much in their mind.

The Minister for Sport (Mr. Tony Banks)

I feel a photo opportunity coming on now.

Mr. Spring

I fear that the Minister may be disappointed.

There is another, more practical test of additionality. I confidently look forward to seeing queues of anxious Labour Members lining up to try to take credit for initiatives that have been funded from the lottery via the new opportunities fund even if, in the words of the Prime Minister, they are not the responsibility of Government. I hope only that they will have the decency—although I doubt it—to own up to the fact that these things will have come about at a certain cost, and that that will be faced by the good causes and the arts, heritage, charity and sports projects that should have received the money that has been diverted into the new opportunities fund to suit the Government's political agenda.

We all know what is going on here. Peter Riddell was correct when he wrote in The Times on 6 April of the proposal to create the new opportunities fund: a Treasury raid it still is, to evade tight limits on public spending and to find new sources of revenue without having to raise taxes. There we have it. The Government have not lost the itch to spend. They happen just to be spending money from the national lottery at the expense of the arts, sport, the heritage and the caring charities. It gives new meaning to the seven-year itch.

Amendments Nos. 7, 2, 3 and 4 seek to re-establish the arm's-length principle in the distribution of lottery money, which, again, is under threat from the Bill. It is not only my hon. Friends and I who are concerned about that. For example, the Sports Council said in a letter: We believe that the arms length principle between government and the Lottery distributing bodies should be maintained, and that the new power given to the Secretary of State to instruct us to `comply' with directions to delegate to specific organisations is too prescriptive. We are also concerned that the powers on the Secretary of State to issue directions to us in relation to our distributing strategies should not be too prescriptive. Delegate bodies must demonstrate that they can effectively account for expenditure of lottery funds. Here again we come to what is at the heart of our objections to the Bill. The Government claim, as they have on additionality, that they are adhering to the arm's-length principle, but, if that is true, why are they introducing in the Bill many powers that will enable them clearly to breach that principle by controlling how lottery money is spent?

Obviously, I accept that the Secretary of State has the existing power under the National Lottery etc. Act 1993 to give directions to the distributing bodies. That is not in dispute, but the Government recently published new directions that will, in effect, reduce the lottery's efficiency and its overall impact by allowing the distribution bodies to dispense with the requirements for matching funds to enable them to carry out the Government's political objectives.

That unwelcome development will, yet again, reduce the lottery's effectiveness and ultimately the public's faith in the national lottery, which stands at a high level at present. It will reduce the overall purchasing power of lottery funds; it represents a drift from encouraging initiative to fostering dependence. As ever, the Labour party is filled with rhetoric, but entirely misses the critical point that so endangers the success of the national lottery. The powers proposed for the Secretary of State in the Bill represent a wholly new departure from arrangements for the good causes in the 1993 Act. We object in principle to the idea of the lottery being used to fund areas that are the absolute responsibility of Government, but we also strongly object to the introduction of the order-making power in the Bill, which effectively gives the Secretary of State control of the new opportunities fund.

We have a flavour of what is to come in the draft directions for the new opportunities fund. We see, for example, that the Secretary of State has already given a direction that healthy living centres should cover 20 per cent. of the country. One can argue, "Why not 15 or 25 per cent?" It is an arbitrary decision, made on a political basis. The new opportunities fund has, in a sense, had its instructions made in advance.

If the Government planned to respect the arm's-length principle, they would have set up the new opportunities fund in the same way as the other good causes were set up. There is no need to have done it in this way. They would not have proposed an order-making power for the Secretary of State to specify on an ad hoc basis how the money in the fund should be spent. To enable them to get their hands on the proceeds of the lottery to supplement general public expenditure, the Government have dramatically increased the Secretary of State's control over the lottery.

That order-making power does not exist in respect of any of the other good causes and was simply not envisaged when the lottery was first conceived, when both sides rigorously defended the arm's-length principle. It is a great tribute to those who introduced the Bill in 1993 that that principle being enshrined in legislation was approved by all hon. Members. It was achieved with true nobility of purpose. Why, therefore, is it being changed? The Government are incapable of providing a satisfactory answer.

The Bill contains deliberately vague definitions of health, education and the environment. It enables the Secretary of State to make ad hoc decisions. Can the Government offer any other explanation or justification for including this order-making power, which is a great departure from previous legislation, other than that it will enable the Secretary of State flagrantly to use the lottery to pursue the Government's political agenda?

It is extremely unfortunate for the long-term health and success of the lottery that the new opportunities fund will, unlike the other good causes, be under direct ministerial control. That is directly in conflict with the arm's-length principle supported by both parties when the original Bill was enacted, and it was much prized by the lottery industry.

The Secretary of State and his successors will be able to specify new causes that will benefit from lottery money without further reference to Parliament. There is no point the Minister telling us that new initiatives will have to be approved by affirmative resolution. In Committee, he said: I want to make one further point clear, which I hope the hon. Gentleman will consider before, I hope, deciding to withdraw his amendment. He raises the spectre of the Secretary of State extending matters further: any further initiatives, over and above those in which the New Opportunities Fund will get involved, will—as he will appreciate from his close reading of the Bill—require affirmative resolution of the House. So, the powers remain with the House, rather than the Secretary of State."—[Official Report, Standing Committee A, 28 April 1998; c. 70.]

How can the Minister sit there with a straight face believing that that in any way justifies the centralisation of power to the Secretary of State? That is utterly absurd. It was not the crowning parliamentary explanation of the Minister's life. He knows perfectly well that affirmative resolution is not the same as primary legislation: it will not require any measure of public support.

Was the Minister really suggesting that an order-making power receives anything like the same scrutiny as a Bill during its passage? Of course it does not. Is he suggesting that the Secretary of State would have difficulty getting such measures approved by Parliament? The Government will not even have a proper debate on their proposals. Parliamentary scrutiny of something as important to the life of the nation as the lottery is crucial for its continued acceptance by the public and for its continued success, but the Government reject such a provision.

By contrast, as the Minister knows full well, the 1993 Act required primary legislation to divert money from the original five good causes. This Bill gives the Secretary of State a mechanism to pay for any new scheme he chooses to fund. In Committee in the other place, the Minister admitted that the new opportunities fund was fundamentally different from the other distributing bodies in the way in which it was being set up and would operate. Lord McIntosh of Haringey said: Of course, the relationship between the Secretary of State and the new opportunities fund, as proposed in the Bill, is different from that which exists between the Secretary of State and the other lottery distributors. There is no pretence otherwise. We are grateful for the candour of one Minister at least.

Lord McIntosh went further when he made it clear that the activities of the new opportunities fund had deliberately not been clearly defined. The Bill has been drafted to give the Government maximum room for manoeuvre. Lord McIntosh said: The relationship is different because the new good cause is different. The existing good causes are pretty well defined and the distributors are in the main well established as expert bodies within their fields. In the case of sport and the arts, the distributors are the key sectoral bodies; the Heritage Lottery Fund was not the biggest player but was well placed to understand the whole sector, and the National Lottery Charities board has quickly established itself as a respected and knowledgeable body in the charitable field. He added: By contrast, the new good cause ranges over a vast area. It encompasses health, education and the environment, each of which in itself is broader than any of the other good causes."—[Official Report, House of Lords, Grand Committee, 22 January 1998; Vol. 584, c. 71–72.]

6.15 pm
Mr. Prior

May I draw to my hon. Friend's attention the definitions in clause 6, which states: 'education' includes training and the provision of activities for children; `the environment' includes the living and social environment Those definitions could hardly be wider.

Mr. Spring

My hon. Friend is absolutely right; that is the danger of the Bill. It includes an order-making power and centralisation measures, but it lacks provisions for parliamentary scrutiny. It could result in an increase in activities under the umbrella of the new fund without proper scrutiny, to the great cost of the original good causes, which need most support and financial backing.

Mr. Christopher Fraser (Mid-Dorset and North Poole)

I concur with the point made by my hon. Friend the Member for North Norfolk (Mr. Prior). Does my hon. Friend agree that "environment" in this context also means the political environment? The Government may seek later to develop the political environment, and that is increasingly worrying.

Mr. Spring

My hon. Friend is absolutely right. At the airport the other day, I saw an advertisement for a cosmetic called "Control Freak"—this may be of interest to the Minister for Sport; I mean that in the nicest possible way. The advertisement talked about taking the oil out of the system and replacing it with something better. It reminded me of the way in which the Bill is being orchestrated by the Secretary of State of a Government who are the most incredible bunch of control freaks in the history of government in this country.

The Minister in the other place admitted that the order-making powers in the Bill were different from what had gone on before. We are not in agreement with the establishment of the new opportunities fund, as the Minister for Arts implied in Committee, although none of us understood what he was on about. The Minister seemed unable to grasp the fact that we were fundamentally opposed in principle to the establishment of the new opportunities fund. As some Labour Members pointed out, although it may be desirable to spend money in some of these areas, it should not be pinched and raided from the national lottery.

We want to make it absolutely clear by our amendments that we are opposed to the establishment of the new opportunities fund, and to the way in which the principle of additionality and the arm's-length principle are being flouted. We believe that the removal of those two key elements will gravely damage the long-term success and viability of the national lottery.

Mr. Fraser

Before I speak—

The Minister for Arts (Mr. Mark Fisher)

Before you speak?

Mr. Fraser

Before I come to the main thrust of my speech, I should like to allude to some of the work that Labour Members did or, rather, did not do in Committee. The hon. Member for High Peak (Mr. Levitt) came top of the list, with nine interventions and two speeches. I should like to continue down the list as an illustration of how the Bill should have been more fully debated by Labour Members—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. This is all very interesting, but the hon. Gentleman must deal with the terms of the amendments.

Mr. Fraser

I will indeed, Mr. Deputy Speaker. It is, however, sad to note how the Government ignored what we had to say about additionality. The Hansard reports of the Committee would make interesting reading in that respect.

The purpose and heart of the Bill are to allow the Government to get their hands on money from the lottery. The Government have tried to dress up the legislation in nonsensical talk about the evolution of the lottery and the need to restore public confidence in it. However, the Government's approach to the Bill in Committee was a sure-fire way of destroying that public confidence. The fact is that, after so many years of whining in opposition, the Labour party now, in government, has to make decisions, circumscribed by the difficulty of being bound by the previous Government's spending limits.

In Committee, Labour implied—although not in so many words—that power has come its way, and it will be used to raid the lottery for health, education and the environment. The Government argue that they must look to the lottery for funding. Of course they must: the Chancellor has presented his case to the country over the past year, and that has left the Government with no alternatives. That means ditching the additionality principle straight away. Labour Members failed to recognise that in Committee; they also failed to speak up in defence of what the Government are doing.

Governments can always make up new definitions of good causes, thereby moving the additionality goalposts. That is precisely what the Government are doing. They have introduced a range of devices allowing the Secretary of State to control how lottery money is spent. The fact that Labour Members seem to believe that that is fine is extremely worrying, given that the Bill will have profound effects well beyond those that the lottery was set up to achieve.

The arm's-length principle has been ditched, too—and the Government appear equally unconcerned about that. The silence from the Government Back Benches has been deafening, and it has been left to the Opposition to table amendments designed to preserve the original intentions behind the lottery. No one in the Labour party seems to care about the fact that, when in opposition, Labour stood four square behind the principles of additionality and arm's length and sought to enshrine them in the original Bill. Now we are told, "That was then." Labour's former principles appear to count for nothing, and it would seem that the Government have changed their priorities. Their view is: if the lottery has to be used to fund these new priorities, so be it.

Put simply, the Government intend to use the national lottery to subsidise public spending without raising taxes. The Treasury is seeking an additional £1 billion by the back door, and the Bill paves the way for that.

By setting up a new lottery distributing body under the direct control of the Secretary of State, the Government are giving themselves the chance to do as they please with the money. Writing in The Times, Peter Riddell made the point very clearly: The new fund also violates the basic principle, reaffirmed by Tony Blair last summer, that it would 'not be right to use the lottery to pay for things which are the Government's responsibilities'". The Government are breaking the additionality principle that was so vehemently supported when the lottery was set up in 1993; and they are doing so to finance mainstream health, education and environment programmes. "Environment" is a generic word, covering a multitude of projects that we cannot anticipate at present. It is open to this or a future Government to misuse the term, which is why I would argue against its inclusion in the Bill.

The idea of an information-rich and an information-poor society has been debated at some length elsewhere, and the Government have stated that they want everyone to join in the information-rich society. In Committee, I told the Minister that schools should therefore offer all pupils an equal chance to participate in that society—hence the teaching of technology must be part of core Government spending. I was not wholly convinced by the response that I was given by the Minister. Public spending programmes continually evolve. Some hon. Members, including me, made the point on Second Reading that the Government cannot justify transferring to the national lottery the costs of such evolution. I should like to know how any of the planned projects fall within the remit of the Department for Culture, Media and Sport—on current evidence, they do not. They all fall into areas for which Governments have traditionally accepted responsibility. The projects in question have been mooted by the Secretaries of State for Education and Employment and for Social Security; but they were rejected by the Treasury, so now they have to be paid for by the lottery.

As has been said, the Bill brings in an order-making power allowing the Secretary of State to determine how lottery money is spent, thereby at a stroke overturning the arm's-length principle. It is the Secretary of State who will specify initiatives. Other distributing bodies set up by the National Lottery etc. Act 1993 are truly independent of Government, and all involved in that arrangement have witnessed the benefits of such independence. Now the Secretary of State will exercise enormous control over the new opportunities fund. That runs against the whole spirit of the establishment of the lottery, which thus far has been a remarkable success.

Evolving Government spending programmes should not be paid for by plundering the lottery. Because of the initiatives that the new opportunities fund will carry, the Secretary of State will become a distributing body. I concur with the view of my hon. Friend the Member for West Suffolk (Mr. Spring), that the whole idea is Treasury-led and means abandoning the hands-off principle. The independence of the good causes will be put in jeopardy. Had the Government wanted to respect the arm's-length principle, they would have set up the new fund along the lines of the other distributing bodies: they chose not to do so. Furthermore, they would not have proposed for the Secretary of State a power to specify, on an ad hoc basis, how the money in the fund is to be spent. The fact that the Secretary of State can involve himself fully justifies the concern expressed by my hon. Friends that he will decide on the scope and direction of his involvement on a whim or fancy.

The Minister may recall that I put it to him in Committee that the arm's-length principle and the additionality principle go together. If the Secretary of State did not have the power vested in him, he would not be able to breach those principles. The power vested in him means that anything he spends has to count as Government spending because he is part of the Government. He has given himself the mandate that he needs.

6.30 pm

The truth is that the Labour party is changing the purpose of the national lottery. I am sure that the Secretary of State and the Minister for Arts will agree that the Secretary of State is intervening in the way in which lottery money is distributed, as the Labour party manifesto promised he would. Labour stated: There has been no overall strategy for the allocation of monies and no co-ordination among the five distributor bodies about the projects deserving to benefit from the National Lottery. That quotation comes from a document entitled "New Labour: Because Britain Deserves Better", published in April 1997.

Policy directions by the Secretary of State will be introduced with the passage of the Bill. On Second Reading, the Secretary of State referred in detail to some directions when he said without any intended irony that they were important to ensure that lottery money is going where it counts."—[Official Report, 7 April 1998; Vol. 310, c. 170.] I wondered at the time whether that was not a Freudian slip and whether the Secretary of State had unconsciously decided to reveal that the money would be spent where Labour votes counted. That has been my suspicion since that comment was made.

The Government want to establish a new direction for the lottery, one that fits with the broader sweep of Government policy and which will serve as a means for redistributing wealth by funding a range of social programmes. To make matters worse, the activities of the new opportunities fund have not been clearly defined. Why have the Government drawn up such vague definitions of health, education and the environment? As I said, "environment" is a generic term, and I should be interested to hear the Minister explain his precise understanding of the environment—social, economic or political—in this context.

We have had few clues from the Government, so we cannot be clear what their intentions are. The Government will not even have a debate in the House on what they propose. The 1993 Act would have required primary legislation to divert money from the original five good causes, yet these proposals come from a party that professes to support open government. I support the new clause.

Laura Moffatt (Crawley)

I am a little confused about why the hon. Member for Mid-Dorset and North Poole (Mr. Fraser) should be amazed that in Committee Labour Members found it difficult to take an active part, when all that we have heard today from Conservative Members is a rehearsal of what we heard then. Given the uninspired new clause, I am beginning to wonder whether there is truly any real opposition to the Bill.

It was very difficult to sit and listen to the arguments about additionality and the wonderful contribution to the debate made by Mr. Riddell in the newspaper. I am sure that he is a terribly interesting writer, but I listen much more to the people I meet in the street who are in favour of the proposals.

Mr. Spring

I am interested to hear the hon. Lady use the word "contribution". Will she confirm that she made no speech in Committee and that her sole contribution was a single intervention?

Laura Moffatt

I am glad to say that that intervention left the hon. Gentleman speechless for few moments, which pleased me immensely.

I hope that we shall shortly finish this debate and see the Bill in place, so that it can reach the people who are interested in what the new opportunities fund will bring. It is sometimes galling to have to listen to the same trite old nonsense, when people want lottery money to be spent as the Government propose.

I was recently lucky enough to attend a session organised by my local health authority to deal with healthy living centres. They are the reason why I was inspired to contribute to debates on the Bill. I am a nurse of 25 years' standing, and the proposals seemed to me to be a new way to bring good health to our communities and to inspire people to take their health into their own hands.

Mr. Prior

Will the hon. Lady explain what is wrong with raising taxes to fund health?

Laura Moffatt

This is a new way, a way to involve communities. We get caught up in the nonsense about additionality, but people on the street are asking when they can contribute and how they can work with their general practitioners. It has been said that the proposals would do terrible damage to private health clubs, but if private health clubs had any sense, they would be entering into partnerships with the local groups that are setting up the healthy living centres. The Opposition have completely missed the boat.

Mr. Fraser

The hon. Lady is ranging rather wide, so perhaps I can ask her to clarify whether she agrees that the money going to healthy living centres will undermine the good work currently being done by GP fund holding practices.

Laura Moffatt

I do not believe for one moment that it will undermine the work being done by GP fundholders. In fact, I shall carry on talking about the meeting that I attended with many GPs in West Sussex. They were very keen to take part in the programme and were asking whether it would be only for inner cities or whether rural areas could contribute. They wanted to know how they could show that they knew people who suffered poor health and whom they could help to adopt a healthy way of living, so I do not think for one moment that GPs will be threatened. In fact, they will welcome the proposals with open arms, as will others in our communities and our children.

The new opportunities fund involves new initiatives, things that have not been done before and on which we shall be able to expand. Indeed, 20 per cent. of our communities will be able to take part. That is very exciting. I understand that the areas where the health action zones are located will naturally have priority, but I shall be very excited when the first centre is set up.

I listened to the hon. Member for West Suffolk (Mr. Spring), who is currently involved in a conversation, saying that we must have a sense of national pride in our arts and treasures. Of course we must, but, as a nurse of many years' standing, my national pride means making sure that we have a healthy nation that can be proactive in achieving good health and which can live longer. I shall be very proud when the first healthy living centre is set up.

Mr. Collins

The hon. Member for Crawley (Laura Moffatt) made an interesting speech. Although I agreed with her on one point, I shall start with another, with which I disagreed. The hon. Lady said that as people want the proposals in the Bill, we should jolly well get on with them. No doubt some people want them, but it is equally clear that others do not. It is the duty of the House properly to debate matters on which there is division in the country and not simply to sweep aside debate on the ground that because the Government want something, they should have it without debate or discussion.

I agree with the hon. Lady about the importance of health, education and the environment. If I had a limited sum of money, I would always prefer to spend it on schools or hospitals rather than on skating rinks or opera houses. For precisely that reason, some of those facilities are clearly intended to be funded by the taxpayer, under a system whereby one can go to prison for failing to contribute to the national health service or state education. Other things that are less important but still valuable are funded in another way. That is why the lottery was set up. As long as those good causes were reliant on taxpayer funding, politicians of any party would always sideline, exclude and reduce them. The lottery was set up on a principle of additionality, which not only had bipartisan support at the time, but arguably enjoyed stronger support from Labour than from the Conservatives.

I pay tribute to the role played by my right hon. Friend the Member for Huntingdon (Mr. Major) as Prime Minister in bringing about a national lottery. Had it not been for his drive in overcoming the bureaucratic and political obstacles to the creation of a national lottery, we would have nothing to discuss today.

The principle of additionality is extremely important and so is new clause 2, in the names of my right hon. and hon. Friends. The principle of additionality that it sets out is defined in exactly the language employed by the Prime Minister, not in an off-the-cuff speech in a Sedgefield pub, but in his foreword to the White Paper "The People's Lottery", on which the Bill is based. Therefore, it falls to the Government and the Labour party to explain precisely why they are not happy with the wording in new clause 2, which seeks carefully to include in the Bill the words used by the Prime Minister in a declaration of Government policy after the general election and in an official White Paper.

Some Opposition Members believe that the Government are not happy about the principle of additionality being written so clearly on the face of the Bill, precisely because the story in The Times this morning is right. The Chancellor of the Exchequer, in his own campaign—which has rather less to do with the progress of the British economy and rather more to do with his ambition to become the next leader of the Labour party—is seeking to prove his own toughness by establishing tough public spending limits for as far ahead as we can foresee. That means that the Government can fulfil their early election pledges—such as those on class sizes and hospital waiting lists, which they have failed to fulfil in their first 13 months in office, that they have little prospect of meeting in the next 13 months in office and which they may or may not meet in the lifetime of this Parliament—only by raiding national lottery moneys to fund education and health spending, which, in the normal course of events, should be funded by the taxpayer. That is one agenda pursued by the Bill, and it would be limited by new clause 2.

There is another agenda, however, which is addressed by amendment No. 4, in the name of my right hon. and hon. Friends. Clause 7, as drafted, would allow the Secretary of State to set out initiatives that would apply throughout the United Kingdom or in one or more areas.

The Minister for Sport is listening carefully to one of his hon. Friends, but I believe that he has a direct and personal interest in the possible use of the new opportunities fund in one particular part of the United Kingdom. He represents a London constituency, and London is doing extremely well out of the national lottery. As we all know, the Minister for Sport may have another rather more personal political agenda relating to a certain political post in London. If the new opportunities fund could be used to benefit London, perhaps to the disbenefit of other parts of the United Kingdom, but to the great joy and happiness of the citizenry of the metropolis, the Minister for Sport might feel that the citizenry of London would reward him for his part in that, by electing him to the post of lord mayor.

The Minister knows that he has tough opposition. Lord Archer has made it clear that were he to be elected lord mayor of London, he would never write another book, and that makes it a tough electoral platform for the Minister for Sport. He will find it extremely difficult to come up with a platform policy to beat that.

Mr. Deputy Speaker

Order. We really cannot have a diversion about what may happen in the future election of the mayor of London.

6.45 pm
Mr. Collins

I apologise for that, but it relates to why the new opportunities fund and the provisions that amendment No. 4 would strike out—enabling the new opportunities fund to benefit one particular area of the United Kingdom—are so important. There should not be even a suspicion of doubt that the Government or any Minister within it might seek to use lottery funds to benefit a particular geographical area within the United Kingdom. If I cannot refer to London, for reasons that you rightly pointed out, Mr. Deputy Speaker, perhaps I may touch on the prospect of the provisions that would be struck out by amendment No. 4 being used to benefit areas that happen to be represented by members of the governing party.

It is worrying that the Bill grants such enormous discretion to the Secretary of State to direct moneys to enormously popular projects relating to education and health, wherever and for whatever reason he or she deems fit. My hon. Friends who served on the Committee tell me that, throughout the discussions on the Bill, Labour Members were enormously excited by the prospect of lottery money being spent on projects in their constituencies, having been directed there by the Government.

Mr. Fraser

I am sure that my hon. Friend will agree that in Committee the high aspirations of Labour Members resulted from the knowledge that the Government could deliver on those aspirations.

Mr. Collins

My hon. Friend makes his point extremely clearly. If amendment No. 4 were not accepted, we would risk the Government being able to use lottery funds in the pursuit of pure party political advantage.

Mr. Banks

I am grateful to the hon. Gentleman for giving way. First, may I remind the hon. Member for Mid-Dorset and North Poole (Mr. Fraser) that he should not get up to make a point while clutching a brown envelope?

I remind the hon. Member for Westmorland and Lonsdale (Mr. Collins) that I receive letters from hon. Members of all parties asking, "Why hasn't scheme X in my constituency received more money?" It is perfectly valid for hon. Members to lobby on behalf of organisations. Hon. Members of all parties have been present when large cheques have been handed over from the lottery or the Millennium Commission in the presence of the press. No one ever claims that the hon. Member managed to get the funding or that the Government provided it. It is a form of publicity in which all hon. Members have indulged.

Mr. Collins

I bow to the Minister's expertise on public relations initiatives and stunts, but his analogies relate to the Millennium Commission, which is an arm's-length body. There is no question of any Secretary of State being in a position to instruct the Millennium Commission as to how it spends its money. Amendment No. 4 would strike out the provision that the New Opportunities Fund shall comply with any directions given to them by the Secretary of State. That is what causes concern, not just among Opposition Members, but among bodies that supported the principle of arm's-length responsibility in respect of the distribution of lottery funds and which are extremely worried by the way in which the legislation is moving towards hands-on control by Secretaries of State who currently serve under a Labour Government. In future, they may be of a different political party, but, in any event, they should not be directly involved in such decisions. That is why our new clauses and amendments would return the national lottery to the principles that led to its creation, its great success and its widespread public support.

Mr. Damian Green (Ashford)

I support the new clauses and amendments, which would save the Government from themselves. The Government believe that their policies will give them short-term popularity, but they will lead to long-term opprobrium when people realise the damage that is done to the national lottery, which has for several years supported many good causes which are valued throughout the country. Once the lottery is damaged and has lost the trust of the people, it will have great difficulty regaining that trust and will no longer be able to provide as much support for good causes as it has during its first four years.

The Government's warm words disguise their ill-intentions. The new clauses and amendments would restore the two principles that the Bill badly breaches: additionality and the arm's-length principle. All fair-minded people—certainly all those who have followed every kick of the ball in this match—agree that additionality has always been difficult to define, but the Government are clearly trying to sweep the principle away. Under the Bill, any spending could legitimately be funded by the lottery, and the current division between spending on what is essential, which should be funded from taxation, and spending on what is desirable, which the lottery has always funded, could not be maintained, unless the Government accept the new clauses and amendments—which I do not expect them to do.

There is nothing that would not be covered by the principles set out by the Government. The lottery could fund anything under the new system. Conventional public spending has always covered a wide range of activities. The level of public spending that society regards it as sensible to fund has gone up and down over the decades, but there has always been a clear core of services that are best provided from collective endeavour through taxation. That covers spending on defence, the police and, under the welfare system that we have had for most of this century, health and education.

Items of expenditure that would be funded by the new opportunities fund, such as information technology training for teachers and the healthy living centres on which the hon. Member for Crawley (Laura Moffatt) is so keen, would normally fall within those broad boundaries of conventional public spending without anyone blinking. If the Government announced that they proposed to spend public money on extra IT training for teachers, nobody would consider it remotely remarkable; it would be a reasonable use of conventional public spending. However, saying that this year's priority was a new set of opera houses or sports stadiums would be bizarre, particularly for a Government who claim to want to put pressure on public spending.

Although the theoretical boundary for what should fall under the additionality principle may be difficult to define, in practice the distinction between the essential and the desirable is clear. If the Bill is not amended, it will drive a coach and horses through that division and allow almost any expenditure to be funded by the lottery. We all know that the Government are doing that so that they can spend more money without appearing to raise taxes.

The people will see through that attempted dishonesty. The White Paper was predictably and drearily called "The People's Lottery". The Government seem to forget that the people are not dim and notice political dishonesty. We are witnessing such political dishonesty. The people will see that items that they expect to be funded from taxation are to be funded by the lottery. They will regard the Government as dishonest and cease to trust them. [Laughter.] Labour Members may laugh, but I look forward to seeing them in two or three years when their popularity has fallen. I am not greatly concerned about the Government's popularity. I shall not lose sleep when they sink into unpopularity. However, I shall lose sleep over the fact that they will drag down with them the reputation of the national lottery, which is doing a lot of good for this country. When the lottery is seen to be a plaything for politicians who want to spend money while pretending not to raise taxes, people will be turned off and will stop playing the lottery, resulting in less money being available for good causes. Labour Members should regret that.

The most ridiculous defence that we heard in Committee was that anything that had not been funded before could legitimately be funded from the lottery. That argument supposes that the world stands still and technology never changes, particularly in health and education. Twenty years ago, IT training for teachers would have been meaningless because IT had not been developed. It is now essential for education, and should be funded from education spending. The Government have decided to fund it from money that should not be used for essential spending.

Additionality is not the only principle to be badly breached. The Government profess to support the arm's-length principle, but their actions belie their words. I am delighted that the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) has returned to his seat, because I am about to say something nice about a Liberal Democrat—admittedly a long-dead one, who once famously said that in the long run we are all dead. Lord Keynes was a Liberal who invented the arm's-length principle when he set up the Arts Council. The Government are doing their best to destroy that principle.

The new opportunities fund destroys the arm's-length principle in many ways. We have already heard about the problems with geographical distribution. I assure my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) that Labour Back Benchers eager to persuade Ministers to divert money their way for political reasons were heard not just in Committee: every Labour contribution on Second Reading was designed to elicit extra money. As the Minister for Sport has said, that is entirely legitimate, and we all do it. However, it is not legitimate to give the power of distribution directly to Ministers, because that will result in their indulging in straightforward pork-barrel politics. That will damage public confidence in the lottery and reduce people's willingness to play it, cutting the money available to good causes.

We have heard about healthy living centres. Again, short-term popularity will contrast with long-term political opprobrium for the Government, because they will be available only in the 20 per cent. of the country regarded as most deprived. The general practitioners in West Sussex who are desperately hoping for such centres will not get any. They will be hugely disappointed and the hon. Member for Crawley will have a lot of explaining to do to her GPs in the coming years. With their budgets permanently under pressure, health authorities will decide not to spend money on such centres because they will know that lottery money is going to them. The existing health service budget will be diverted away from such desirable spending.

The new opportunities fund will also have an incredibly elastic definition of the environment. It can mean absolutely anything. The Department of the Environment has grown beyond all recognition in the past 10 years. Over the next 10 years, the definition of the environment in the Bill will also grow greatly and will be seen as another piece of straightforward pork-barrel politics.

My overall reason for supporting the new clauses and amendments is that, without them, the sum of the mass of detail in the Bill will bring the lottery into severe disrepute and greatly concern hon. Members on both sides of the House. In its four or five years, the national lottery has done enormous good for the country. The Bill that damages it will harm the country enormously. Without the amendments and new clauses, that is what the Bill will do.

7 pm

Mr. Andrew Tyrie (Chichester)

I well remember discussion about a national lottery first arising when I was in the Treasury in the late 1980s. We thought about whether we should make a serious proposal and worked quite hard on it. As everyone knows, in the end, Mrs. Thatcher ditched the idea. The crucial problem with which we grappled was exactly the subject of this debate—additionality. The problem was how to get money to causes that could be seen to be quite distinct from core Government responsibilities that were funded from general taxation.

Whatever we hear from Ministers tonight, I am absolutely confident that everyone in the country understands the fundamental distinction between spending on, for example, capital infrastructure for the arts, sports and heritage, and core funding in, for example, education and health. People will grasp over a run of years that the creation of the sixth good cause has blurred that distinction. They will realise that, in a world in which some things are clearly black and others clearly white, this area is grey, and that that greyness is enabling the Government to use lottery funding slowly but steadily to substitute spending from general taxation.

The national lottery has been a great success, partly because the Conservatives succeeded in finding a way of creating a lottery in which there was such a clear distinction. People want to participate in something that is not just a ramp for the Government to get hold of extra tax revenue but has a sense of excitement that is derived partly from knowledge of where the money will go. That will be eroded by the Government's proposals, but it will be put right if the amendments and new clauses are accepted.

The Prime Minister has made it perfectly clear that he agrees with the principle of additionality. I shall not bother to quote his words, because they have been cited on many occasions. It is clear that one of Labour's manifesto pledges will be partly funded by the sixth good cause, even though anyone who read the manifesto when it was published would have understood that the pledge would be funded from general taxation. There has clearly been a breach of principle, and people will gradually grasp that.

The sixth good cause represents not only additionality but—to coin an even worse term—subtractionality. It will subtract money from the other five causes. It is no good people saying that the five causes will continue to receive exactly the same funding. It is absolutely clear that they will receive less money than they otherwise would have done.

The creation of the shadow account almost certainly breaches the law. When I asked the Minister for Arts about that in February, he said that the statutory authority for setting up the shadow account was the National Lottery Bill. If that is not a clear case of retrospection, I do not know what is. It must be a retrospective action to pass a law to justify an act that has already been executed. If the Minister wants to explain why that is not retrospection, I shall gladly give way. I see that he does not.

The Government have browbeaten the five good causes into accepting the proposal. They know that such retrospective action is challengeable in the courts, but they will not embark on a legal challenge because they need a relationship with the Government. The Government have escaped what should be, and easily could have been, an extremely embarrassing event.

The Minister for Arts is looking at the clock as I speak, so I shall conclude by asking him a few questions. What will he do when lottery fatigue sets in? Will he allow receipts that go to the sixth good cause to fall to protect existing funding of the five good causes? What will happen when people become accustomed to the flow of funds to core activities in education and health but lottery fatigue sets in and resources fall?

Mr. Banks


Mr. Tyrie

If the Secretary of State wants to say something, he is welcome to do so.

Mr. Banks

I am not the Secretary of State; I am a humble sports Minister. Does the hon. Gentleman play the national lottery?

Mr. Tyrie

Yes, I have played the national lottery. In fact, not long ago, I won about £80, so I am feeling particularly happy about the lottery. Perhaps the Minister will tell me how he is doing. Perhaps I am collecting some of his losses.

If it becomes clear that the funds for the sixth cause to which bodies initially became accustomed are no longer available, will the Minister for Arts be prepared eventually to use general taxation to plug the gap, or will he allow funding for the sixth good cause to fall? I support the amendments and would very much like to hear answers to my questions.

Mr. Prior

My hon. Friend the Member for Chichester (Mr. Tyrie) spoke of lottery fatigue. Looking at the face of the Minister of Sport, I know exactly what he means: there is a distinct sign of fatigue on the Labour Benches.

We must remember that the lottery has been a huge success and has raised a huge amount of money for the good causes because of the two key principles that underlie it: the good causes identified are in addition to normal public spending and the funds are distributed at arm's length from the Government.

The new opportunities fund will have an extremely broad remit. From the preliminary guidance provided by the Department, it seems that the fund will also be highly prescriptive. We are told: The Fund shall, by September 2002, commit funds to projects that, between them, should establish or develop healthy living centres accessible to around 20 per cent. of the population". We are told: The Fund shall commit funds to out of school hours education projects which taken together should provide regular activities involving at least half of all secondary schools". Proposed section 43C of the National Lottery etc. Act 1993 makes it clear that the new opportunities fund shall comply with the Secretary of State's wishes.

Let us compare that with a brochure that came through the post this morning from the National Lottery Charities Board, which has just distributed £133 million to 1,306 organisations to help the homeless, animal projects, village and community centres and projects to develop the voluntary sector. Most of us know that additionality is a difficult concept to define, but we all know when it is breached. If you cast your eye down the list of projects in your constituencies, you will know exactly what is—

Mr. Deputy Speaker

Order. I am sorry to interrupt the hon. Gentleman, but I remind him that he is addressing the Chair and must use the third person.

Mr. Prior

I apologise. It is clear to most of us when the concept of additionality is being broken.

I wish to refer to a point made by the hon. Member for Crawley (Laura Moffatt). I agree with what she said about healthy living centres, and we are not opposed to them. However, we believe that they should be funded through normal, general taxation.

The problem with the Bill is that clause 13 erodes the arm's-length principle for all the other good causes, and makes it clear that all other distributing bodies must produce a strategic plan that must comply with the wishes of the Secretary of State. That extension of Government control is over not only the new opportunities fund, but all other funds. That goes to the heart of our objections to the Bill. It is no longer a people's lottery, any more than the former Governments of eastern European countries were people's Governments. It is now a Government lottery. It is in danger of losing the support of the people, and the ultimate losers will be the good causes.

Mr. Peter Brooke (Cities of London and Westminster)

First, I declare an interest. Within the past month, I have won two £10 prizes, which have encouraged me to continue; it was some time prior to last month that I last won. Secondly, as the Minister for Sport has been accusing the whole House of writing him begging letters, I am sure that he would acknowledge that I have never written him one—not least because I pay him the compliment of assuming that he would have nothing to do with the decision. Therefore, I might as well save my ink.

The hon. Member for Crawley (Laura Moffatt) said that she had been listening to a repetition of the Committee debates on Report. That is not true in my case—partly because I was not on the Committee and partly because I want to allude to remarks made earlier today. The hon. Lady did not speak in Committee apart from one intervention—which I have checked—of which she was proud. I cannot tell whether, in her remarks about additionality today, she was implying that she did not believe in the principle of additionality—contrary to her party's previous position—or whether she did not believe in its relevance to the Government's proposals. I mention the matter because it is of some importance to the debate.

I wish to refer to an exchange I had earlier today with the Minister for Film and Tourism at Question Time. I am sorry that he is the only one of the Secretary of State's ministerial team who is not present. I will not say anything hostile about him; I shall just describe what he said. The Ministers present will recall a remarkable definition of additionality given by the Minister on 21 July 1997, which I quoted on Second Reading.

The issue of additionality arose this afternoon when I asked the Minister—as a supplementary question, following a question from the hon. Member for Burnley (Mr. Pike) about local authority initiatives in tourism—whether the lottery would be paying for English tourism in the future. I do not have access to the Minister's precise reply and we will have to wait for tomorrow's Hansard. However, he said that it was not possible for him to say anything about that matter because, as I would understand, a comprehensive spending review was going on and he could not say who would pay for English tourism in future.

The Minister did say that the issue of whether the lottery should pay for English tourism or not had been discussed. The Minister for Arts shakes his head—

Mr. Fisher

indicated dissent.

7.15 pm
Mr. Brooke

When we look at Hansard tomorrow, we will see what the Minister for Film and Tourism said. My hon. Friend the Member for Mid-Dorset and North Poole (Mr. Fraser) was sitting next to me—

Mr. Fraser

indicated assent.

Mr. Brooke

My hon. Friend nods his head in terms of his recollection of the reply. The implication is that a policy or a principle amounts to a prefabricated decision—a standing fact of Government affairs.

If the lottery will not be substituted for spending on English tourism, the Minister for Film and Tourism did not need to make any allusion to it, or to the comprehensive spending review. He could simply have said that lottery funds will not be used on English tourism. He did not say that. I said that I would not be derogatory about him, but a reasonable description—and not an evaluation—would be that his answer rambled a bit. We will see tomorrow precisely what he said, but he certainly did not rule out specifically the lottery paying for English tourism. Against that background, I am left with concern that the principle of additionality is further eroded by the Government.

The Secretary of State corrected me on certain things I said about the consultation when the hon. Member for Forest of Dean (Mrs. Organ) spoke on Second Reading; it was a helpful intervention. All of us are agreed that fewer than 100 individuals contributed to the consultation. The Secretary of State knows that most of the 600 responses came from organisations. It can be no surprise to anyone that organisations would have said that they were in favour of lottery money being spent on what they do. It would be odd if they had not done so, for the very reason that the Minister for Sport gave when referring to begging letters. I am left distinctly uneasy about where the principle of additionality stands this afternoon.

I wish to refer briefly to the arm's-length principle. The hon. Member for Crawley said, effectively, "All power to the Government's elbow. We hope that they spend any money they wish on things of which we approve." I do not want to sound like Nestor. I have said previously that I was not the architect of the national lottery legislation; one could produce a decent-sized architectural practice from those who said that they were that. I simply had a subordinate job in the master mason's department.

The hon. Member for Stalybridge and Hyde (Mr. Pendry), to his credit, has sat through the debate today, and he will recall our debates in the Chamber, in Committee and elsewhere when the legislation was forged. As my hon. Friend the Member for Ashford (Mr. Green) said, one of the principal reasons why this is the best lottery in the world is that the money does not go to the Treasury, and we have avoided it doing so.

The hon. Member for Stalybridge and Hyde will recall our debate about charities, and their fears that they would be disadvantaged by the fact that they would get only 20 per cent. of the money going to good causes. The only evidence we had to engage in that debate was the experience of Irish charities. It was clear that the problem in Ireland, in effect, had been that the money was going back to the Government for the Government to decide which charities should do better. Some said that they had done very well out of the Irish lottery, while others said that they had done badly; it had depended totally on the Government's whim. Au fond, that is why the Opposition are uneasy about what the Government are about.

Mr. Fisher

For these remaining stages of the Bill, it has been good to have the right hon. Member for Cities of London and Westminster (Mr. Brooke)—the former Secretary of State for National Heritage, who introduced the original legislation in the House—here to contribute to our deliberations. All hon. Members recognise that we have had enormous benefits from the national lottery, and that is in no small part—despite his modest denial of any role in the architecture of the legislation—due to the right hon. Gentleman. His seeing it through in the first place has given great pleasure and benefit to the people of this country. His speech was, by a long way, the shortest, most intelligent and most interesting contribution from the Opposition Benches. Before he gets too carried away by my compliments, however, I should add that, given the quality of some of the contributions of his colleagues, that remark is modest.

The right hon. Gentleman asked for clarification on what my right hon. Friend the Minister for Film and Tourism said. My right hon. Friend did not mean to imply that the lottery would ever provide a substitute for Government expenditure on and support for tourism through the English tourist board or the British Tourism Authority. He was referring to the fact that, as the right hon. Gentleman will appreciate, tourism-related matters, such as the arts and heritage—piers at our great seaside resorts, for example—have benefited from the lottery, which has been for the good of tourism and of communities. As my right hon. Friend the Secretary of State said, we are examining arts and heritage as part of the comprehensive spending review.

Mr. Brooke

As the answer of the Minister for Film and Tourism to my question was long, it is a little surprising that he did not enter the same grace notes as the hon. Gentleman has, with which I have no problem—they were part of the discussions that we had on Second Reading of the original Bill.

Mr. Fisher

I have explained the position of my right hon. Friend and the Government, so perhaps we can move on.

I welcome the hon. Member for East Surrey (Mr. Ainsworth) to his role as shadow Secretary of State. It is good that he is listening to our debate—I hope that he will contribute to discussions later this evening. However, I hope that he has to wait a long time before he succeeds the right hon. Member for Cities of London and Westminster in introducing legislation—he will do well if he introduces legislation that is as constructive and well respected. We shall do our best to ensure that he has a long, patient wait.

It struck me that, the longer the hon. Member for West Suffolk (Mr. Spring)—who led for the Opposition—spoke, the less he had to say. Despite the fact that, amazingly, he spoke for 44 minutes, he did not seem to add much to the interesting speeches that he had made before—strangely, he seems to be taking a long time to grasp that the Government support the principle of additionality every bit as much as the Opposition do. He is obviously yearning to oppose us, but he cannot find much to oppose, as we all agree on additionality. We have supported the principle, which the previous Government introduced, both in our manifesto and in everything that my right hon. Friends the Prime Minister and the Secretary of State have said for extremely good reasons of clarity and, as Mr. Peter Riddell said—he has been much quoted in our deliberations—to prevent the Treasury and other Departments from raiding the funds.

It is important that we maintain additionality and arm's-length principles—I make it clear that the Government are committed to the principle and practice of additionality. Our manifesto said that lottery funds should remain strictly additional to Government expenditure, and the Prime Minister said: We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities. That could hardly be clearer, but, despite the fact that we said it time and again in opposition and say it again tonight, the Opposition are slow to recognise it.

In our deliberations on the 1993 Act, on the White Paper and on the Bill, we have all agreed that it is extremely hard to define additionality. That is why both this Government and the previous Government decided that it would be sensible not to attempt to define it, but to create a principle to which we could all subscribe and which could be kept in practice. We can argue the toss—we did so in opposition, as some hon. Members have said—but we learned over the years in which the previous Government ran the lottery that that was the most pragmatic way in which to proceed. It is very difficult to find a definition in law that would stand up and bear the necessary test of pragmatic implementation, so, like the previous Government, we believe that the common-sense test is the best.

I can say little more on the subject. We have clearly failed—the failure is mine—to persuade the Opposition that we believe in additionality. I believe that our actions, and the actions of the arm's-length bodies that distribute lottery funds, demonstrate that belief. I do not think that the people are in any doubt that the sums are in addition to, and do not replace, Government expenditure—the people are under no misapprehensions; they know that, even if the Opposition do not.

The hon. Member for Chichester (Mr. Tyrie), who is no longer in the Chamber, asked what would happen if there were lottery fatigue and the flow of funds dried up. I think that he misunderstands how the lottery funds work—they are project funds for short-term, specific initiatives; not core funding for any of the activities. If he understood that, he would understand why his question was inappropriate.

We have clearly not succeeded in convincing the Opposition, although I believe that we shall persuade the House, as we have persuaded the people. The Government believe in additionality and in the arm's-length principle; we ask the House to reject the proposed measures.

Mr. Spring

I agree entirely with the Minister on one thing: he has totally failed to convince the Opposition or to respond to our points. It is a great disappointment that, instead of dealing in general terms with the arm's-length principle or with additionality in practice, the Government are failing the national lottery and the people's confidence in it.

Question put, That the clause be read a Second time:—

The House divided: Ayes 121, Noes 276.

Division No. 287] [7.27 pm
Ainsworth, Peter (E Surrey) Gillan, Mrs Cheryl
Atkinson, David (Bour'mth E) Gray, James
Atkinson, Peter (Hexham) Green, Damian
Baldry, Tony Greenway, John
Bercow, John Grieve, Dominic
Beresford, Sir Paul Gummer, Rt Hon John
Boswell, Tim Hague, Rt Hon William
Bottomley, Peter (Worthing W) Hamilton, Rt Hon Sir Archie
Brady, Graham Hammond, Philip
Brooke, Rt Hon Peter Hayes, John
Browning, Mrs Angela Heald, Oliver
Bruce, Ian (S Dorset) Heathcoat-Amory, Rt Hon David
Burns, Simon Hogg, Rt Hon Douglas
Butterfill, John Howard, Rt Hon Michael
Cash, William Hunter, Andrew
Chapman, Sir Sydney Jack, Rt Hon Michael
(Chipping Barnet) Jenkin, Bernard
Chope, Christopher Johnson Smith,
Clappison, James Rt Hon Sir Geoffrey
Clark, Rt Hon Alan (Kensington) King, Rt Hon Tom (Bridgwater)
Clifton-Brown, Geoffrey Kirkbride, Miss Julie
Collins, Tim Laing, Mrs Eleanor
Colvin, Michael Lait, Mrs Jacqui
Cormack, Sir Patrick Lansley, Andrew
Cran, James Letwin, Oliver
Davis, Rt Hon David (Haltemprice) Lewis, Dr Julian (New Forest E)
Dorrell, Rt Hon Stephen Lidington, David
Duncan, Alan Lilley, Rt Hon Peter
Duncan Smith, Iain Lloyd, Rt Hon Sir Peter (Fareham)
Faber, David Luff, Peter
Fabricant, Michael Lyell, Rt Hon Sir Nicholas
Flight, Howard MacGregor, Rt Hon John
Forth, Rt Hon Eric McIntosh, Miss Anne
Fowler, Rt Hon Sir Norman MacKay, Andrew
Fox, Dr Liam McLoughlin, Patrick
Fraser, Christopher Madel, Sir David
Gibb, Nick Major, Rt Hon John
Malins, Humfrey Steen, Anthony
Maples, John Streeter, Gary
Maude, Rt Hon Francis Swayne, Desmond
Mawhinney, Rt Hon Sir Brian Syms, Robert
May, Mrs Theresa Tapsell, Sir Peter
Moss, Malcolm Taylor, Ian (Esher & Walton)
Nicholls, Patrick Taylor, Sir Teddy
Page, Richard Townend, John
Paice, James Tredinnick, David
Paterson, Owen Trend, Michael
Pickles, Eric Tyrie, Andrew
Prior, David Viggers, Peter
Redwood, Rt Hon John Walter, Robert
Wardle, Charles
Robathan, Andrew Whittingdale, John
Robertson, Laurence (Tewk'b'ry) Widdecombe, Rt Hon Miss Ann
Roe, Mrs Marion (Broxbourne) Wilkinson, John
Ruffley, David Willetts, David
St Aubyn, Nick Wilshire, David
Sayeed, Jonathan Winterton, Mrs Ann (Congleton)
Shephard, Rt Hon Mrs Gillian Winterton, Nicholas (Macclesfield)
Shepherd, Richard Woodward, Shaun
Simpson, Keith (Mid-Norfolk) Yeo, Tim
Spelman, Mrs Caroline
Spicer, Sir Michael Tellers for the Ayes:
Spring, Richard Mr. John M. Taylor and
Stanley, Rt Hon Sir John Mr. Stephen Day
Adams, Mrs Irene (Paisley N) Coaker, Vernon
Ainsworth, Robert (Cov'try NE) Coffey, Ms Ann
Allen, Graham Connarty, Michael
Anderson, Donald (Swansea E) Cranston, Ross
Anderson, Janet (Rossendale) Crausby, David
Armstrong, Ms Hilary Cryer, Mrs Ann (Keighley)
Ashton, Joe Cummings, John
Austin, John Cunliffe, Lawrence
Banks, Tony Cunningham, Jim (Cov'try S)
Barnes, Harry Darling, Rt Hon Alistair
Bayley, Hugh Darvill, Keith
Beard, Nigel Davey, Valerie (Bristol W)
Bennett, Andrew F Davidson, Ian
Berry, Roger Davies, Rt Hon Denzil (Llanelli)
Best, Harold Davis, Terry (B'ham Hodge H)
Betts, Clive Dawson, Hilton
Blears, Ms Hazel Dean, Mrs Janet
Blizzard, Bob Denham, John
Blunkett, Rt Hon David Dismore, Andrew
Bradley, Keith (Withington) Dobbin, Jim
Bradley, Peter (The Wrekin) Dobson, Rt Hon Frank
Bradshaw, Ben Donohoe, Brian H
Brinton, Mrs Helen Dowd, Jim
Brown, Rt Hon Nick (Newcastle E) Drew, David
Brown, Russell (Dumfries) Dunwoody, Mrs Gwyneth
Browne, Desmond Eagle, Angela (Wallasey)
Buck, Ms Karen Eagle, Maria (L'pool Garston)
Burden, Richard Edwards, Huw
Burgon, Colin Efford, Clive
Caborn, Richard Ellman, Mrs Louise
Campbell, Alan (Tynemouth) Ennis, Jeff
Campbell, Mrs Anne (C'bridge) Field, Rt Hon Frank
Campbell-Savours, Dale Fisher, Mark
Canavan, Dennis Flint, Caroline
Caplin, Ivor Flynn, Paul
Casale, Roger Foster, Rt Hon Derek
Chapman, Ben (Wirral S) Foster, Michael Jabez (Hastings)
Chisholm, Malcolm Foster, Michael J (Worcester)
Clapham, Michael Fyfe, Maria
Clark, Rt Hon Dr David (S Shields) Gapes, Mike
Clark, Dr Lynda Gardiner, Barry
(Edinburgh Pentlands) Gilroy, Mrs Linda
Clark, Paul (Gillingham) Godsiff, Roger
Clarke, Rt Hon Tom (Coatbridge) Goggins, Paul
Clarke, Tony (Northampton S) Golding, Mrs Llin
Clelland, David Gordon, Mrs Eileen
Clwyd, Ann Griffiths, Jane (Reading E)
Grocott, Bruce Marshall-Andrews, Robert
Grogan, John Martlew, Eric
Gunnell, John Maxton, John
Hain, Peter Meale, Alan
Hall, Mike (Weaver Vale) Michael, Alun
Hall, Patrick (Bedford) Milburn, Alan
Hamilton, Fabian (Leeds NE) Miller, Andrew
Hanson, David Mitchell, Austin
Heal, Mrs Sylvia Moffatt, Laura
Henderson, Ivan (Harwich) Moonie, Dr Lewis
Hepburn, Stephen Moran, Ms Margaret
Heppell, John Morgan, Ms Julie (Cardiff N)
Hewitt, Ms Patricia Morgan, Rhodri (Cardiff W)
Hill, Keith Morley, Elliot
Hinchliffe, David Morris, Ms Estelle (B'ham Yardley)
Hoey, Kate Mowlam, Rt Hon Marjorie
Hope, Phil Mudie, George
Hopkins, Kelvin Mullin, Chris
Howarth, Alan (Newport E) Murphy, Jim (Eastwood)
Howells, Dr Kim Norris, Dan
Hoyle, Lindsay O'Brien, Bill (Normanton)
Hughes, Ms Beverley (Stretford) O'Brien, Mike (N Warks)
Humble, Mrs Joan O'Hara, Eddie
Hutton, John Olner, Bill
Iddon, Dr Brian O'Neill, Martin
Jackson, Ms Glenda (Hampstead) Osborne, Ms Sandra
Jackson, Helen (Hillsborough) Palmer, Dr Nick
Jamieson, David Pearson, Ian
Jenkins, Brian Pendry, Tom
Johnson, Miss Melanie Pickthall, Colin
(Welwyn Hatfield) Pike, Peter L
Jones, Barry (Alyn & Deeside) Plaskitt, James
Jones, Mrs Fiona (Newark) Pollard, Kerry
Jones, Helen (Warrington N) Pond, Chris
Jones, Ms Jenny Pope, Greg
(Wolverh'ton SW) Prentice, Ms Bridget (Lewisham E)
Jones, Jon Owen (Cardiff C) Prentice, Gordon (Pendle)
Jones, Dr Lynne (Selly Oak) Prescott, Rt Hon John
Jones, Martyn (Clwyd S) Primarolo, Dawn
Keeble, Ms Sally Prosser, Gwyn
Keen, Alan (Feltham & Heston) Purchase, Ken
Khabra, Piara S Quin, Ms Joyce
Kidney, David Quinn, Lawrie
Kilfoyle, Peter Rammell, Bill
King, Andy (Rugby & Kenilworth) Rapson, Syd
Kingham, Ms Tess Raynsford, Nick
Ladyman, Dr Stephen Reed, Andrew (Loughborough)
Lawrence, Ms Jackie Reid, Dr John (Hamilton N)
Laxton, Bob Roche, Mrs Barbara
Lepper, David Rogers, Allan
Levitt, Tom Rooker, Jeff
Lewis, Ivan (Bury S) Ross, Ernie (Dundee W)
Lewis, Terry (Worsley) Rowlands, Ted
Liddell, Mrs Helen Roy, Frank
Linton, Martin Russell, Ms Christine (Chester)
Lock, David Salter, Martin
Love, Andrew Sawford, Phil
McAllion, John Sedgemore, Brian
McAvoy, Thomas Sheerman, Barry
McCabe, Steve Sheldon, Rt Hon Robert
McCafferty, Ms Chris Simpson, Alan (Nottingham S)
McCartney, Ian (Makerfield) Singh, Marsha
McDonagh, Siobhain Skinner, Dennis
McDonnell, John Smith, Rt Hon Chris (Islington S)
McFall, John Smith, Miss Geraldine
McIsaac, Shona (Morecambe & Lunesdale)
McKenna, Mrs Rosemary Smith, Llew (Blaenau Gwent)
McNamara, Kevin Soley, Clive
McNulty, Tony Southworth, Ms Helen
Mactaggart, Fiona Spellar, John
McWalter, Tony Squire, Ms Rachel
Mahon, Mrs Alice Starkey, Dr Phyllis
Mandelson, Peter Steinberg, Gerry
Marsden, Gordon (Blackpool S) Stevenson, George
Marshall, David (Shettleston) Stewart, David (Inverness E)
Marshall, Jim (Leicester S) Stewart, Ian (Eccles)
Stinchcombe, Paul Watts, David
Stoate, Dr Howard White, Brian
Stringer, Graham Whitehead, Dr Alan
Stuart, Ms Gisela Williams, Rt Hon Alan
Sutcliffe, Gerry (Swansea W)
Taylor, Rt Hon Mrs Ann Williams, Alan W (E Carmarthen)
(Dewsbury) Williams, Mrs Betty (Conwy)
Taylor, David (NW Leics) Wills, Michael
Thomas, Gareth (Clwyd W) Winnick, David
Tipping, Paddy Winterton, Ms Rosie (Doncaster C)
Todd, Mark Wise, Audrey
Touhig, Don Wood, Mike
Trickett, Jon Woolas, Phil
Truswell, Paul Wright, Anthony D (Gt Yarmouth)
Turner, Dennis (Wolverh'ton SE) Wright, Dr Tony (Cannock)
Turner, Dr George (NW Norfolk) Wyatt, Derek
Vaz, Keith
Vis, Dr Rudi Tellers for the Noes:
Walley, Ms Joan Mr. Kevin Hughes and
Wareing, Robert N Jane Kennedy.

Question accordingly negatived.

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